Russian deals spur recruitment
It's close to a decade since leading investment banks beat a hasty retreat from Russia, badly burned in the financial crisis. Eight years on, recruiters say the country is most definitely back in fashion.
"Demand is here, and is increasing," says Natalia Khlaturina, a Moscow-based consultant for US executive search firm Ward Howell. "Russian banks and international banks are hiring driven by growth in Russian initial public offerings (IPOs)."
A quick perusal of prospective IPOs reflects the strength of the market. The Russian electricity giant Unified Energy System (UES) is expected to announce an initial $300m offering in the next few weeks. Others are likely to follow: TGK-3, Moscow's regional electricity generator is expected to list for between $700m and $1bn, for example.
Who's going in... again
A strong IPO pipeline, Russia's abundance of natural resources, and the additional spur of a high oil price, mean it doesn't take a genius to work out why banks are returning to Moscow.
Goldman Sachs is reportedly applying for a broker-dealer license in Russia. Citigroup, ING, Credit Suisse, Morgan Stanley and Dresdner Kleinwort Wasserstein have hired for their Moscow operations. And last month Deutsche Bank completed the acquisition of United Financial Group, a leading Russian investment bank and its long-term partner in the country.
"There's a huge shortage of talent, and demand for Russian bankers is stronger than ever," says Rupert Fordham, chairman of Russian-focused search firm Morgan Hunt. "The Russian market is becoming increasingly complex: where you used to have debt capital markets teams selling simple bond products to clients, you now have demand for staff who can sell complex derivative solutions."
Talent shortages mean international banks with expansionary aspirations in Moscow are competing against Russia's own financial institutions. In 2003 Renaissance Capital famously hired Chris Baxter, head of energy and power banking at Merrill Lynch, on what was reportedly a multi-million pound package guaranteed over several years. It has since hired the likes of Neil Harvey, a former chief executive of then Credit Suisse First Boston in Hong Kong, and Andrew Cornthwaite, former head of the equity corporate finance department at CSFB.
Fordham says Russian banks are often seen as more appealing places to work than their international competitors: "The Russians are much more tuned into the way business in the country works. They have stronger client relationships with deeper roots. A lot of clients remember the fact that all the Western banks ran for the exits in 1998."
From London with love
Not all Russian bankers are located in Russia, however. With Russian companies increasingly listing on the London Stock Exchange, recruiters report demand for Russian-speaking corporate financiers in London. "Big American banks like Citigroup, Morgan Stanley and Goldman Sachs are all gagging for Russian speakers with some kind of country experience," says Emma Halls, a manager at London-based recruitment firm Financial Professionals. "They're prepared to be flexible - they'll look at consultants who've been working the Russian oil markets, for example."
Banks are also looking for Russian-speaking sales staff for their London offices. Merrill Lynch recently hired Elina Volkova-Urselli from ABN Amro as a director responsible for derivatives marketing to Russia and Eastern Europe. "Everyone is looking for people to sell derivatives into Russia," says Elvira Muratova, head of the CIS team at search firm Napier Scott. "Several banks have sales staff in Moscow, but others base their Russian sales staff in London and expect them to travel."
The only cloud on the Eastern horizon is the unpredictability of Russia's government. The country's last boom, from 2001 to 2003, came to a halt when Yukos boss Mikhail Khodorkovsky was arrested on charges of tax evasion. It recently emerged that William Browder, chief executive of Hermitage Capital Management, which runs Russia's largest equity fund, has been banned from Russia for reportedly being a national security threat. The arbitrary exercise of state power may yet puncture Russia's bubble again.
