'Richard' had been working as a senior coverage banker in Dubai for over ten years, rising to managing director for a large US institution when the rug was suddenly pulled from under him. His employer wasn’t making huge cuts globally, but a continued bad run for investment banking fees in the Middle East simply made it ‘uneconomical’ to keep him on.
“The simple thing would have been to move back to London, which so many people did in the wake of cuts in 2008, but I had expanded my network in the region, had the contacts and expertise locally. It would have seemed like starting afresh going back to Western markets and that’s never a good thing as an investment banker,” he tells us, speaking on the condition of anonymity.
Here’s the problem in the Middle East, though. If you’re employed by a large international investment bank and have a pedigree of some big ticket deals, it opens doors among clients and usually means that you’re highly employable – particularly among local banks who have been building their investment banking functions. If you’re unemployed, you are not.
This might explain the sudden influx of independent ‘consultancies’ started by former senior bankers in recent year. For various reasons, senior bankers in the region have decided to go it alone – Sameer Al Ansari, the former CEO of Shuaa Capital, now runs advisory firm PE+; Zaid Maleh, the former head of MENA for Russian bank VTB Capital, now heads up Dach Advisory and Ziad Awad, the former head of Bank of America Merrill Lynch in Dubai has his own advisory boutique.
Others have been less public about their new ventures, simply offering advice on smaller deals to contacts and friends. It’s these people the banks are snapping up in recent weeks: “People who have the contacts and have been working in a ‘consultancy’ function for a couple of years are the first to be hired now that banks are building their teams in the region again,” says one headhunter who declined to be named.
Middle East investment banking revenues are posting the sort of increases that scream a new boom is on the cards, with a 72% quarter-on-quarter climb. Yet again, however, this remains around half the fees earned during the boom of 2007 when banks shared a pot of $1.4bn.
Nonetheless, the term “bright spot” is increasingly being used to describe investment banking recruitment in the Middle East. This could be down to the fact that teams have been cut to the bare bone in recent years, so a skeleton crew being beefed up again looks positive. .
“There’s not a rush of hiring in investment banking, but firms in the region are looking at how they can position their teams for the upturn and currently this is manifesting itself as a need to bring in senior bankers,” says Barbara van Meir, senior principal consultant at Boyden Middle East. “This is more activity than in the last five years, and previously any recruitment was focused on the junior end.”
So far, the only international investment banks really talking up expansion in the region are Renaissance Capital, JPMorgan and Natixis, which intends to bolster headcount by 50% this year. The volume recruitment is still within the local institutions, says Omar Taha, managing director of executive search firm S&T Group.
There’s huge growth coming from the local banks in Abu Dhabi,” he says. “Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, National Bank of Abu Dhabi and Emirates NBD are increasing their investment banking numbers as their commercial operations are churning record profits.”
“The driver is the fact that the UAE is now the undisputed hub of banking and finance in the Middle East,” he adds. “Five years ago, there was still competition from Bahrain, Cairo, and Qatar. Therefore, these banks are now serving a bigger investment banking market and relationships and using their balance sheets throughout the region.”