SWFs to look closer to home

Sovereign wealth funds are likely to dominate the domestic M&A market in the Gulf this year, and are still interested in hearing from international bankers as they build up their teams.

After watching last year's international investments tank, it seems SWFs are keen to keep their investments closer to home this year.

Samir Al Ansari, chief executive of Dubai International Capital, told the Wall Street Journal he had concerns over "challenging" conditions in the US and Europe and that: "Our primary focus in these regions is to protect existing assets rather than acquire new ones."

And with GCC governments' driving M&A activity in the region in a bid to stabilise the real estate and equity markets, SWFs are likely to be encouraged to invest in domestic markets.

Alaa El Din Rady, co-founder and MD of Enmaa Financial Services, says: "SWFs are expected to re-direct their investments to developing markets still offering solid growth opportunities and expected to yield higher returns."

"States are now focusing on their immediate economic needs, and that is a thing we see in the Middle East. We hear that funds from various countries are increasingly addressing domestic investments, like infrastructure projects, intended to help reignite their economies," said Deutsche Bank analyst Steffen Kern in a research note.

The result, says Barbara van Meir, director, financial services at headhunters WoodHamill Ingram, is that SWFs are looking to build up their M&A teams.

Though the job opportunities are still relatively scarce, the fact that they're looking internationally, will be music to the ears of the legions of redundant bankers in Western markets.

"Our sovereign clients are generally eager to import skills and experience from a more mature market," says van Meir. "They view current global conditions as an opportunity to attract talent that was previously uninterested in this region, or in a sovereign employer."

The bad news, though, is that not every organisation is currently looking to build their teams in this space.

"This does not seem a widespread trend yet," Meyer confesses. "Although we have several of our clients moving in this direction"