The ups and downs of being an investment banker in Saudi

In terms of deal flow, Saudi Arabia is the natural choice for any investment banker looking to base themselves in the Middle East. But, although the kingdom relies on expat talent, its conservative society and relatively restrictive lifestyle has traditionally made it a hard sell.

At the height of the financial crisis, this investment banker quit his position at a bulge bracket bank in London for a vice-president role within a prominent local firm. A year on, was it all worth it?

Why did you decide to make the move from London to Saudi?

I'm originally from the region, and as deals dried up in Europe in 2009 and my experience became stale as a result, it seemed the right time to move back. I'd also survived a few rounds of layoffs that left our team depressed, which rushed the decision.

Saudi Arabia was the natural choice since it is still an active deals market. In addition to this, I believed - and still do - that it is the best place to gain credible experience in the GCC market during the current economic slowdown. I'm aiming to obtain a GCC track record to complement my London and New York experience.

On a more personal level, I wanted to be closer to family since they live in the Middle East.

Did you consider other areas of the GCC?

I did look at other markets, but they were also in crisis mode (with the exception of Qatar). Remember this was in Q1-Q2 2009, so the GCC market was still in the middle of this crisis. Qatar also never seemed like a good place for me to get the credible GCC track record I was looking for, as it is still a small investment banking market.

What's been the hardest obstacle to overcome in terms of working culture?

You would think being an Arab means that you wouldn't have issues, but you would be wrong. My career started in London and New York and I'd worked there for the last 10 years. When I came here, I had to adjust to an environment that moved much more slowly, had less skilled employees and a decidedly less professional structure. You will have to adapt to their ways if you want to gain any friends!

It gets frustrating, though, since the laid back attitude means things get done at a much slower pace, or to a lower standard. This means I have to micro-manage people, which I hate, but it is necessary sometimes to get things done to the quality that you're used to.

What are the advantages of working there? Presumably you have a lot more responsibility than in an international investment bank?

Naturally there is more responsibility here as the structure is slightly flatter. Also, given the lack of proper training programmes at many of the local investment banks, you will end up spending as much time helping analysts and associates as you do pursuing deals and managing active mandates.

But as the teams are not particularly large and overloaded with managing directors, you will quickly have more client responsibility - at associate and even analyst level.

Another advantage is that you are competing with less-qualified people, so your knowledge and skill is more valued internally and with clients.

You mentioned people tend to leave work at 5.30pm - presumably that's a little frustrating if you're used to the long hours of London IBDs, and what you're able to achieve in that time?

This is probably the most challenging thing for the investment bankers coming from London or New York. The culture of many of the local banks is similar to that of a commercial or retail bank. So, expect things to take a bit longer.

However, on the upside, many clients are not particularly demanding or sophisticated, so there isn't necessarily a need to get things done very quickly.

It helps that the market is not geared towards actively pitching ideas, so that reduces the workload significantly compared to London or New York.

It does get frustrating, though, when you ask for something to be done and it isn't completed in time because analysts and associates left at 5.30pm, instead of working that extra hour or two to get it out on time.

If the hyperbole is to be believed, Saudi is the epicentre for investment banking in the Gulf and the growth potential is huge. Do you buy into this, and have you found deals plentiful during your time there?

Absolutely. Deals are plentiful and growing, but competition is heating up from both local investment banks that have built credible teams over the last couple of years, and the international investment banks. So, while deals are plentiful, this doesn't necessarily mean your team will be busy. We have been fortunate enough to be able to win multiple live mandates due to the quality of our team and favourable pricing strategy.

A lot of people say that relationships are more important than technical skills in the GCC, particularly Saudi. Do you agree?

Like anywhere else, relationships do matter but technical skills and track record are becoming as important, if not more important, in Saudi Arabia. Many of the requests for proposals that I have seen recently explicitly request individual team track records.

Clients are no longer happy to just rely on a relationship and they don't have to, since there are now qualified bankers in Saudi Arabia and, more importantly, a greater availability of qualified institutions.

It is not enough to rely on relationships anymore. Bankers will have to be more aggressive in pursuing deals and must be able to demonstrate a track record if they want to succeed in the future.

How important are Arabic language skills?

It definitely gives you an edge, since many companies publish financial statements and other documents only in Arabic, so having that skill a definite plus. Those who don't understand the language can still do well and just rely on the Arabic speakers on the team to translate any documents.

How does the pay compare? Is the lack of tax that much of an advantage, or do living expenses negate this to some extent?

I negotiated a slightly higher basic salary compared to a similar position in London or New York. The key word is 'negotiate', especially with local companies, which will try to offer you a significant discount initially.

Tax is definitely an advantage. By getting the same basic salary as in London and New York, you are essentially doubling your take home pay. Also, Riyadh is not an expensive city (except for compound housing) and there isn't much to spend your money on anyway, given the limited social activities.

If you are single and don't travel, you can save the majority of your monthly take home pay. I travel a lot at weekends, but am still saving a lot more than I would have if I were living in London or New York.

Recruiters suggest that good investment bankers in Saudi are hard to come by, presumably you get a lot of offers?

Yes and no. When you are outside Saudi, recruiters look for bankers to move into the country. However, once you're here, it's extremely difficult to leave your bank for another employer before to your contract expiration date. Even then, you might still face issues and are therefore less attractive to recruiters at that stage.

Due to restrictive labour laws, you are pretty much 'stuck' with your employer unless they are willing to give you a no objection certificate to allow you to transfer your Iqama (residence) and work permit to a new employer. The restrictive labour policies for expats therefore make it very difficult to move between banks.

Are you there for the long-term?

I don't know. It depends on the definition of long term. I am here on a two-year contract and my goal is to complete it. However, if a more interesting opportunity lands in my lap before this time is up, I'll probably leave.

I think what bothers me most about Saudi is the number of restrictions on personal freedom to leave the country (exit/entry visa that expires every 6 months) and the lack of social options. Also, the compensation (meaning bonus) is not significant enough to keep me here. Again, I am more focused on the getting the professional experience I need.

What about family and friends? Do you get to see them often? Is it easy to meet people?

If you live in a compound and attend social events at various western embassies, then yes, you can easily meet people. However, I tend to fly out almost every weekend and see some friends and family in the region. I have been in Jeddah a few times for some fantastic diving trips, which are always fun, and camping in the desert is an alternative way to fill up your weekends.

Is the social scene a little lacking? What do you do for fun? Are there any advantages from a personal life perspective?

A short answer is yes. I decided against living in compound because the price differential was significant, and wanted to use the savings from that to fly almost every weekend somewhere interesting and exciting.

Depending on the compound, they can be quite social and fun and the embassy parties and events are good place to meet people. Outside of that, there isn't really a social scene unless you get involved in some of the diving or desert camping trips.