I-banks Ramp Up Teams on Hopes of Bet­ter Days

Rush to hire mid­dle- & se­nior-level bankers, take steps to stop ex­its

The Economic Times - - Companies - BAIJU KALESH

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.

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