MIDDLE EAST MOLE: After the summer, expect the winter to be frosty

As many in the Middle East will know, we're about to enter the final month of work this side of summer, before recruitment grinds to a halt and deal activity hibernates until Ramadan comes to an end.

We can reflect on an eventful first half - the 'Arab Spring' denting any hopes of a deal resurgence, bonuses retracting and many who had expected more career opportunities this year now simply happy to still have a job.

There has been some deal activity this so far year across M&A, capital markets and private equity, but the truth is that volumes across the board have not budged much compared to prior year. Subdued H1 hiring activity also morphed into unofficial headcount freezes, with rumours surfacing that these will become official with only strategic hires in H2 with much justification.

Generally, the messages are mixed with the expectation that deal activity will be roughly in line with that of last year, though perhaps with larger deal values and mostly flat deal volumes. More specifically, my team has it on good account that during June two large M&A mandates will be announced, a live one pulled and two or three large restructuring of major entities to kick off.

The Big 4 accountancy firms are seeing massive activity across their restructuring and operational improvement franchises - evidence that much of the region is still dealing with a difficult trading environment.

Nonetheless, there has been some activity around principal investing to date, and more importantly there are some interesting deals being worked on as we speak, with activity set to pick up toward the end of the summer as PE managers seeks to monetise their portfolios.

A couple of the larger managers have been gearing up their assets for exit on the pretext of strong markets but in reality driven primarily due to funds approaching the end of their hold periods and thus forcing realisations. To some extent, this will drive M&A, debt market and IPO activity somewhat.

Still, two international banks have put in place official regional hiring freezes, with several others unofficially putting headcount increases on hold until after the summer. Investment groups at regional conglomerates or family offices have seen little hiring or deal activity.

Where it has been perkier is wealth management, where there continues to be demand for senior guys with the ability to port relationships (regardless of their actual product experience). As I write, the heads of two large wealth practices (one for an international bank and another for a regional one) are putting the finishing touches on their new contracts ahead of jumping ship with their teams in tow.

The question is when these companies do start hiring, whether they'll find much talent on offer. Anecdotally, I have it on good account that pretty much all the removals companies in the UAE and Qatar are fully booked until the end of July, and this is not for inbound shipments.

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.