ECM killed the M&A star

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M&A professionals are finally becoming more in demand as Asian deal making rises close to levels last seen in the pre-GFC boom. But because banks have recently been so focussed on ECM, they are now facing serious skill shortages in M&A.

According to data tracker Dealogic, Asia Pacific companies have made US$132.7bn of offers for companies outside their home country so far this year, compared with US$142.7bn in the same period of 2008, and more than double last year's pace.

Large global banks including Goldmans Sachs, JP Morgan, Morgan Stanley, Barclays Capital and Credit Suisse are all building up their M&A teams in Hong Kong, says one headhunter, who asked not to be named. Rothschild and Lazard, in particular the former, are the strongest boutique players.

Natural resources and FIG are the two most sought-after M&A sectors in Asia, says Rafael Brana, an associate at Bó Lè Associates. "Recruitment isn't at fever pitch yet, but M&A skills are growing in importance to the banks, especially in Asia. From a strategic perspective, they want to have the best people on board soon," he adds.

Hard to hire

Asian bankers, however, tend to have more experience in ECM, says Pui Gardiner, director, Carraway Group. "This is where the bulk of the revenue has been produced in recent years, so Mandarin-capable bankers with solid technical M&A skills are relatively scarce," she adds.

Brana agrees that the historic dominance of ECM in Asia has stifled the development of the M&A talent pool, but the recent growth of Asian M&A activity is helping to cultivate these skill sets, he adds.

"Late last year and earlier this year, there was an ECM hiring spree. But now China cross-border M&A deals are a driving force and global banks are moving their best senior talent to the region. They are also eagerly seeking junior/mid-level M&A expertise, which is scarce," says Brana.

So how are the large firms sourcing their M&A staff? Rothschild is a traditional hunting ground because banks can sometimes entice its employees with the opportunity of working for a larger institution, according to the anonymous headhunter.

Western-trained bankers with Asian experience often make ideal candidates if the role doesn't demand Mandarin skills. "At VP and above level, many of the strong M&A bankers have had early careers in New York or London - where the M&A market is more mature - and have subsequently relocated to Asia," says Gardiner.

Brana adds: "These senior guys are expensive and they have plenty of career options, so they're not easy to hire. When one decides to move it creates a musical-chairs effect across a number of banks."

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