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Japanese M&A specialists in short supply

With Japanese companies divesting assets and private equity firms swooping in, the next few years should provide good opportunities for M&A bankers in the country.

According to information provider Dealogic, Japanese M&A volumes in 2006 hit US$182bn, 40% of the overall Asian market. No wonder foreign banks including Credit Suisse, Lehman Brothers and Morgan Stanley are adding numbers.

“We are seeing strong demand for bankers at the senior vice president or managing director level,” says Keigo Shindo, director at search outfit Akamai Financial Markets. “Those with expertise at originating deals and a strong network of contacts are seen as the key to success.”

However, candidates who match the specific skill set are in short-supply, and Japanese banks are reluctant to bring in foreign talent.

“The candidate pool is small and it can take up to a year to place the right person,” adds Shindo. “Banks want Japanese bankers who can speak fluent English. The number of foreign bankers here is smaller than five years ago. If they can’t speak fluent Japanese or understand cultural differences, it is difficult for them to originate deals.”

While base salary increases have been moderate – around US$4k in the past year at the VP level – bonus structures make up for that. VPs earn between US$112k and US$156k in basic salary. US banks typically offer 100% bonus guarantees and, with incentive bonus schemes, overall bonuses could be between 300% and 500% in exceptional years.

Executive directors, meanwhile, attract salaries of between US$166k and US$208k, with similar bonuses to VPs. As for managing directors, salaries range from US$215k to US$300k, with Shindo describing bonuses as “exceptionally high” during boom times.

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