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End of emerging markets bankers in London?

Lots of banks run their emerging markets businesses out of London. That could change.

On one hand, London’s role as a centre of financing for emerging markets firms is looking secure. When Lehman Brothers executed a dawn raid on the stock of Australia-based Rio Tinto last month on behalf of Chinese client Chinalco, the coup was managed out of London, according to the
Financial Times.

Similarly, The Independent reports that rival Russian oligarchs have hired a raft of British bankers to assist with their bids for Russia’s Norilsk Nickel.

“When it comes to capital raising, London is the major location for emerging markets companies,” says Ian Gomes, chairman of the new and emerging markets practice at KPMG. “It’s a major centre for oil financing and understands mining and metals better than many other markets in the world.”

On the other hand, with countries like China and India pushing their own markets as sources of funding, and with both Barclays Capital and JPMorgan scrambling to massively increase their presence in Asia, Gomes says London’s position isn’t quite what it was: “It’s a wait and see situation, but many emerging markets IPOs get better valuations if they take place in their home country.”

Sweaty palms?

An exodus of emerging markets business and emerging markets bankers isn’t about to happen, but recruiters say the potential for a slow trickle of business away from London is a concern, and that bankers are starting to sweat about it.

“A few emerging markets people have lost their jobs and others are starting to look around nervously,” says Rupert Fordham, chairman of search firm Morgan Hunt.

He adds: “There’s been huge emerging markets hiring in London over the past few years, but right now there’s very little net activity going on and there’s a lot of redeployment to places like Dubai. People are starting to wonder whether they should move overseas.”

In the meantime, banks like Nomura and BNP Paribas still run their emerging markets businesses out of London. And Elvira Moratova of search firm Napier Scott says others favour a structure of co-heads, with one based in the City and the other on the ground in the local market.

The good news is that Moratova, an emerging markets specialist, also claims to be busy: “There’s still a lot of demand for emerging markets people in London this year. We are overloaded with work.”

Comments (10)

  1. thanks to the stupidity of gordon and his lacky alastair, they are going to drive away many emerging market specialist expats anyway. Way to go labour party. Screw the british economy and get re-elected. Days of the raj, anyone? You did get kicked out of india, have you fogotten?

    non dom rules suck Reply
  2. I have the contacts and the candidates and the best recruiting team in banking and so this doesn’t worry me at all…if they move from london i shall move them. If they set something new up elsewhere I will fill the headcount.

    Lord Farquar of the Clapham Manor Reply
  3. Such talk as this is nonsense. Emerging Markets is a now a major sector of the London economy and the big red bus is going to do all it can to keep it that way. I’m tired of this political Houdini act personally.

  4. Lord Farquar of the Clapham Manor, if that is indeed your real name, you’re obviously so good at your job that you can take time off during the day to search the net and make childish comments about sectos you’ve probably never dealth with. Sir, I salute you

  5. hope you are well!!! !

  6. I cant believe the rubbish coming out of headhunters- overloaded with work??? when many of these houses have hiring freezes?

  7. Rio Tinto – Brazil based – what genius came up with that?

    Geography Lesson Reply
  8. The text has been changed to take account of the fact that Rio Tinto is in fact in Australia, a mere 8,400 miles away from Brazil.

    Sarah, Editor, eFinancialCareers Reply
  9. Australia – emerging market?

  10. any fool knows that credit moves north to south, so its no surprise that far east markets are picking up more of the cake. But that still leaves a heck of a lot of cake. Yum!

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