Our predictions for the Gulf in 2009

Attempting to peer into a crystal ball for the coming year can be a risky business in these turbulent times. Nevertheless, we've gone out on a limb and here are our thoughts on the potential highs and low for next year.

2009 WILL BE A GOOD YEAR FOR JOBS AND HIRING IN....

Private equity

The top 10 funds raised focusing on the Middle East have a combined $5.7bn, according to figures from Preqin, and will increasingly looking for local opportunities in 2009. Abraaj Capital believes there's potential for $670bn of Middle Eastern private equity deals over the next ten years.

What's more, around 30% of North American private equity investors will look for new investments in the Middle East next year, according to Coller Capital's latest Global Private Equity Barometer.

This will equate to more hiring in 2009, says Bill Allum, managing director of executive search firm Napier Scott.

"Private equity specialists will be in demand in the region next year. In spite of recent liquidity problems, there are plenty of entities there that have substantial wealth and they will be looking to identify world-class people to join their teams," he says.

Hedge funds

Hedge funds are currently leaking money through investor redemptions. In November 2008, around $53.2bn was withdrawn (following on from $62.7bn in October), according to EurekaHedge, and Citigroup analysts estimate that they'll lose $1trillion by halfway through 2009.

Not surprisingly, they're looking to the cash-rich GCC for new investments, and in order to show their commitment to the region, an increasing number are opening offices here.

Recent entrants include Pharos Financial Advisors, Gottex Fund Management and Thames River Capital.

But recruitment in this space is likely to be small and restricted to sales roles, says Elizabeth Hackford, vice president at executive search firm Sheffield Haworth.

"Hiring in these small offices is not likely to be dramatic," she says.

Private Banking

Wealth in the Middle East is relatively small on the global scale at $3.4 trillion, but it's growing at the above average annual rate of 8.6%, according to a new report by Boston Consulting Group.

Three of the five densest millionaire populations are also in the region - Qatar, the UAE and Kuwait.

Competition for talent is heating up and more professionals in this space are open to new opportunities, which is likely to spur recruitment.

Richard Lett, head of banking at recruiters RP International, says: "We expect an increase in recruitment in the private banking space among both international and regional organisations."

Distressed assets

Gulf Stream, an asset manager backed by the Dubai government, has rolled out a fund to focus on distressed assets in 2009, and the feeling is that the GCC - like other regions - will increasingly look to buy into these assets next year.

Recruitment is already underway. Imran Saleem, head of financial services at Egon Zehnder International in Dubai, says: "I think the demand is already picking up and will do so even more in 6 to 9 months if not earlier."

AND 2009 WILL BE A BAD YEAR FOR JOBS AND HIRING IN...

Islamic finance

Islamic finance won't have a terrible year in 2009, but it is unlikely to see the astronomical levels of growth it enjoyed in 2008.

Islamic banks' assets grew by 20-30% in 2008, according to Moody's, but the ratings agency predicts this could slow by 10-15% next year.

However, firms in this space are looking to diversify into derivatives, hedge funds and private banking, which could spur growth and hiring.

M&A

M&A deals in the GCC are actually likely to be fairly buoyant in 2009, spurred on by enforced consolidation in areas like financial services and property, according to research by consulting firm AT Kearney.

This is pattern is also likely to be echoed in other areas of the world.

However, M&A recruitment looks unlikely, says Barbara van Meir, director financial services at headunters WoodHamill Ingram.

"Over the next twelve months we expect there to be limited demand in investment banking, as both regional and international houses take stock," she says.

Kuwait

Kuwaiti banks have high exposure to real estate, particularly commercial, which could slowdown rapidly in the coming year. If these problems continue down their current road, then it could be big trouble for the banks, reckons Moody's.

"Concerns that the situation may fail to improve in 2009 have been compounded by the poor performance of the financial markets between September and November 2008, in which the Kuwait Stock Exchange dropped 40%," says Stathis Kyriakides, Moody's assistant vice-president and analyst.

The Bank Workers Union reckons one unnamed financial services firm has already laid off between 40-80 people.

New entrants

Relocating a banker to the Middle East is an expensive business for an employer, what with the accommodation, flight allowance, education and healthcare costs. With the flood of talent entering the region they're more reluctant to foot the bill.

Coupled with the fact that as little as six months experience in the GCC markets could vastly improve your employment prospects, new entrants to the region are likely to find it decidedly tougher in 2009.

"There's a huge amount of people coming in to the region and it's getting tougher and tougher for those from Western markets to secure a position," says Peter Greaves, head of financial services at headhunter McArthur Murray. "Firms are much more likely to hire people already on the ground because it's cheaper and there's less of a cultural learning curve."