I-banks Ramp Up Teams on Hopes of Better Days
Rush to hire middle- & senior-level bankers, take steps to stop exits
Investment banks have begun hurriedly beefing up teams by hiring middle-tosenior-level bankers as they reverse course amid expectations of a boom that will reverse the slump of the past few years. They expect the new government to usher in reforms that will help Indian companies raise money at improved valuations and embark on mergers and acquisitions (M&A) after a three-year lull. At least five investment banks have sounded out head hunters to search for bankers at these levels while many global Ibanks have now stopped letting go of talent after rigorous costcutting in the past year or so. “We will add between 8% and 10% to our rolls in the middleto-senior level across investment banking, foreign institutional equities and asset management,” said Vikas Khemani, chief executive for wholesale capital markets at Edeleweiss, a financial services firm. “We have lot more enquiries on public offers and fund raising requirements from companies than last year.’’ The firm, which employs 200 executives in its investment banking division, has asked head hunters to scout for more people. Some investment banks that trimmed staff as fund raising came to a standstill have started hiring again. Sun Capital, which has leased a 3,000 square foot office space in the Mumbai suburbs, hired three senior bankers with more than 15 years of experience and three middle-level executives this month as it seeks to build a strong investment bank. In the last calendar year, M&A volume and fees dropped sharply and local and global I-banks slashed costs and headcount. Domestic M&A volume plunged 49% to $16.3 billion and India-targeted volume fell 22% to $32.1 billion. Fees earned by investment banks dipped 14% to $594 million in 2013, according to Dealogic. Some head hunters said for- eign bankers won’t let people move on as they may have to be hired back at a steep price later, after the market revives.
“The global investment banks will now stop letting their people leave and look for hiring depending on the pipeline and demand,” said Siddarth Raisurana, director, ABC Consultants. “The activity will pick up in the next two quarters.’’
His firm has been hired by local and multinational I-banks to hire staff at the middle to senior level. There were few such requirements last year.
The India talent count at the top 14 global banks including Bank of America, Merrill Lynch, Barclays, Credit Suisse, Citibank, BNP Paribas, CLSA, RBS, Goldman Sachs, Deutsche Bank, Nomura, JP Morgan and Morgan Stanley has declined to 619 from 875 (M&A and equity capital markets) about six years ago, according to data from executive search firm Vito India. These 14 banks hired 10 fewer last year than in 2012 but saw 68 more exits in the same period.
India’s largest investment bank by revenue, Kotak Mahindra Capital Co., will selectively hire bankers while Ambit Corporate Finance will soon review its hiring strategy. Some bankers are leaving their firms to build new ones. Emerging India Investment Advisors chief executive officer Sandeep Menon will soon be striking out on his own along with some mem- bers of his current team. He will hire close to 10 bankers and analysts, having won mandates that include large family offices seeking to restructure and restack investment and real estate portfolios. “We require more bankers as we have mandates from real estate companies to restructure and sell down their assets,’’ said Menon, who is leaving the firm this month. Kotak Investment Banking didn’t slash bankers during the slow years, said Chetan Savla, executive director and head of the corporate advisory group. “We don’t follow a blow-hot, blow-cold policy and did not take a knee-jerk decision to reduce our team size,’’ he said. “Selectively we could hire and we never let people go.” The investment bank, owned by India’s fifth largest lender by market value Kotak Mahindra Bank, expects the capital market to revive for fund raising and has already strengthened its team by hiring bankers from rival firms at the levels of associate director to executive director. Head hunter Confluence Consulting India recently placed five bankers in the middle to senior level with an investment bank. “We are seeing both local and global banks keeping their infrastructure ready to hire in the next few quarters as demand rises,’’ said Sunil Shukla, managing director of Confluence.