Shrinking M&A volumes mean fewer hires

M&A volumes in the Middle East have tumbled by nearly 50% on last year and banks' appetite to hire seems to have dried up along with the number of deals.

The Middle East Databank, compiled by Dealogic for Financial News, reveals that the value of M&A deals year-to-date in the region is just $19.8bn - a 46% drop on 2007.

This will be unsettling news for the army of bankers looking towards the GCC for new opportunities, and many firms will have to put their expansion plans on ice for the time being.

Muhannad Qubbaj, managing director of Abu-Dhabi-based investment boutique Gulf Capital, told the Financial Times that headcount at international banks would "most probably be re-thought and all platform development will be recalculated".

"M&A revenue potential in the Middle East has until now been somewhat over-anticipated; that is to say, there were too few deals and too many institutions trying to play in the same space," says Jon Duckfield, executive director of global executive search firm Options Group.

He adds: "Many of the existing multinational players have downsized their teams. Advisory firms are turning down business because they don't have the resources or the headcount approvals to meet client needs. The support from London is not there, because those ranks are thinning out as well."

Omar Taha, managing director of headhunters S&T Group, says M&A hiring has been buoyant throughout the year and the number of new roles has only started to slow down in the last month - in both domestic and international banks.

"Local players have made it very clear that they are in a hiring freeze period," he says.

Anna Orchard, director, Middle East, at executive search firm Morgan Hunt, says: "Any additional headcount within international banks involves relocating people internally. It's incredibly hard for firms to get clearance for external hires."

She says that local banks are still keen to add to their numbers, but the uncertainty in the market means they're holding off for the time being.

However, David Korn, managing partner EMEA, at Options Group, thinks that local firms have been taking advantage of international banks' inability to hire and are tapping talent from New York and London. He tips demand for investment banking professionals in the Middle East to rise in 2009.