MIDDLE EAST MOLE: 2010 has been a huge let down
However you want to spin it, one thing is clear about the past 12 months - 2010 has been an unpredictable and mixed year, which should have made most of us wiser and tougher.
After an abysmal 2009, there were numerous, and often contradictory, expectations for the year ahead. The final quarter of last year saw several hiring freezes enacted at major international names in the region; scared expats packing their bags to Abu Dhabi or Doha (or just going home), while other foreign and regional players were making new inroads into the market.
The markets were facing a quandary - essentially polarised between the fears of being unprepared for and missing out on a rapid upsurge in activity against the prudence of controlling a large cost base, sent mixed signals to the market.
No one knew whether to hire or fire, increase budgets (to basically unachievable performance targets), pay mediocre bonuses to all or hand out hefty ones to the few shining stars, enter new product classes or refocus on core offerings. The list goes on.
As we moved though the first half of the year, massive uncertainty gave way to cautious optimism, with a dribble of deals (and a river of rumours) slowly drip feeding into the market - hardly enough to get anyone excited but enough to get people talking about, at the very least, having turned a corner.
Talk of M&A activity picking up, PE funds starting the fund-raising machinery and a wave of recruitment in wealth management were the talk of the town. The Big Four went on a recruitment frenzy, poaching entire teams from each other and flying in underworked European colleagues into the region.
Some big name hires were made across the Gulf and, importantly, Dubai World (kind of) drew a line under its debt problems - things were starting to look peachy!
Unfortunately, as we navigated the quiet months of summer and continued sailing into the equally professionally unexciting holy month of Ramadan, despite all hype both regional and international banks' bottom lines had not really grown (and in some cases been decimated by write offs).
By the end of the third quarter it was obvious that, while some banks had hired and a few institutions were making more money this year, the reality is that we're still very far away from a true revival.
With the year coming to a close and everyone focused on hitting much lower (yet retrospectively tough) targets for the year, the reality is that for most 2010 has been mostly a let-down.
For the young inexperienced hungry guns, this has been an invaluable lesson on the industry's ugly side, while it's a reminder for the seasoned professional that this is still a long-term game where you have to make the most of the years of plenty to be ready for the lean years that follow.
Jamal Bahir (a pseudonym) is seasoned senior private equity and investment management industry veteran based in the Middle East and Europe. He is an advisor to several ruling and trading families from the Middle East, as well as select European governments and private equity funds, advising on their investment, financial and regional political strategy. The author may be reached on jamal.bahir@gmail.com.
