With scant opportunities in their chosen sector available, investment bankers in the Middle East are increasingly turning to public sector roles. For many used to working for cut-throat elitist bulge brackets, sleepy bureaucracy-laden government institutions will come as a culture shock.
Like an affluent shopper in a plush Dubai mall, government institutions are attracted to the status symbol of buying in a bulge bracket ‘brand’ on their books. Sovereign wealth funds and other state bodies are – once visas are approved - increasingly trying to secure the services of investment bankers suffering from the deal drought in the region.
An example of this is Peter Fort, who after “a lot of convincing” moved from Morgan Stanley’s Middle Eastern team to head up the freezone of Ras Al Khaimah. Sovereign wealth funds, notably the Abu Dhabi Investment Authority and the Qatar Investment Authority, have also been hiring from international banks.
“We have seen an increasing number of opportunities available for principal investment specialists within government departments and companies that have an investment remit,” said James Wakefield, director of recruiters Cobalt Abu Dhabi. "However, before those used to fast-paced and very dynamic environments consider relocating it is vital that they seriously consider the change of culture and pace that they can expect to encounter.”
It’s not necessarily a cushy option to go into government – indeed specialist expat expertise is expected to do the bulk of the work – but it’s still an intensely bureaucratic and political environment to work in.
“If people are thinking of UK or US government institutions when considering working for a Middle Eastern state body, then they’re in for a surprise,” added Barbara van Meir, managing director of Dubai-based headhunters Vogel & Noor. “You’re expected to work hard, and all roles have a public development slant to them, which means a lot of meetings, some travel and the occasional bout of late nights, which may suit some investment bankers.”
The advice of those who managed to secure a role at a Middle Eastern government institution is to broker a good deal before you start – don’t expect pay to rocket up, or to be rewarded for your individual performance. Pay structures are geared towards salaries with bonuses more of an end of year sweetener – think 30% of base – than the sort of variable comp associated with investment banking.
“While investment banks are geared towards individual performance and stars, the state bodies here are designed to avoid any sort of individual culpability,” said one private equity professional who worked for a Gulf sovereign wealth fund. “The upside is that you’re unlikely to be fired, but it’s also an uphill struggle to get promoted.”
You will, however, be joined by a lot of people with similar qualifications and backgrounds. Middle Eastern sovereign wealth funds collect those with MBAs from top business schools and experience with bulge bracket banks, but often don’t stretch them to their full capabilities, he argues.
“The problem is that they’re often paranoid of these people taking advantage of them, so don’t really give them many opportunities for individual progression,” he said. “Some like the change of pace and stick around, others leave fairly swiftly.”