There are few investment banks making big statements of expansion currently. There are even fewer universal banks focusing more on investment banking at the expense of other functions. And it’s even rarer for an investment bank in the Middle East, where most international players have been scaled back, to be looking to hire.
Step forward QInvest, the Qatar bank that has been looking to snap up international investment bankers all year. Now, it’s just unveiled what it conversely calls both a new “streamlined” look and a “growth strategy”. Essentially, it’s ditching its brokerage and wealth management to focus on investment banking, private equity and asset management.
This in itself is something of a bold move. Brokerages in the region have been struggling with low trading volumes for years now, and many shut up shop, but until recently wealth management was considered something of a cash cow for many banks looking to tap into the $4.1trillion held among high-net-worth individuals in the Middle East.
By contrast, investment banking has been in the doldrums. In 2012, despite nearly a 20% uptick, Middle East investment banking fees were just $536.1m, according to Thomson Reuters, which has prompted most international firms to scale back in the region.
QInvest is one of a few regional institutions to attempt to capitalise on this – with First Gulf Bank and the National Bank of Abu Dhabi also expanding – and has been recruiting seasoned investment bankers from bulge bracket firms. In April, it hired Michael Katounas from Credit Suisse to lead its investment banking function and, according to headhunters in the region, has been building the function since then.
As we’ve mentioned previously, the vast majority of employees in QInvest’s investment bank have come from international players, and most have experience in other financial centres. QInvest’s new strategy will predominantly be in expansion on Qatar, Saudi Arabia and Turkey, but it also has plans to focus on the UK IPO market.
Despite the tepid deal environment for investment banks in the Middle East, Katounas is upbeat about the sector’s prospects. He told Reuters: “If you are waiting for the next $10-15 billion deal from the region, you will be waiting for a long time. On the mid-sized deal space, you have enough opportunities there to keep you busy.”