The good news: Booming Middle East markets are cushioning investment banks' head counts. The bad news: To keep your job, you might have to move there.
For years, bank executives have focused expansion plans on emerging markets. Now, as record oil prices propel Mideast wealth while prospective deal business in Europe and the U.S. slows, the bright spot on management's globe is revealing a dark side for some Western bankers' career prospects.
Investment banks are redeploying their staff in a grab for fees in the Middle East, Financial News reports. "Large numbers of bankers in the U.S. offices of one Wall Street investment bank are being told to join their emerging markets effort or leave the company," the paper says. According to an unnamed senior banker at the firm, the joke doing the rounds there is, "Mumbai, Dubai, Shanghai or goodbye."
"The local talent pool is limited in the Middle East so banks are tending to redeploy existing staff," Merrill Lynch executive Jeffrey Culpepper told Financial News. Culpepper is head of global markets and investment banking for Middle East and Africa.
The majority of Morgan Stanley's 40 investment bankers in the Middle East transferred from London, according to George Makhoul, president of the bank's Middle East and North Africa region. Along with Dubai, the article cites Saudi Arabia and Qatar as growth markets where Western banks bought licenses recently and now "want their most experienced bankers on the ground."
Credit Suisse reportedly plans to add 20 coverage bankers to its Middle East operation this year. Last month the bank named former executive board member Michael Philipp, an American who'd headed its Europe-Middle East-Africa region from early 2005, as chairman of the Middle East and Africa, a new role focusing on strategic clients in the region.
The newspaper previously reported that emerging markets, including the Middle East, made up a rising share of new managing director titles awarded by U.S. and European bulge-bracket banks this past year. Capital markets and advisory fee revenue from the Middle East reportedly climbed 65 percent last year, to $1.4 billion, and is estimated to reach $2 billion this year.