A panel of headhunters gives its assessment of typical London pay packages. Base: around 100,000. Bonus: variable but typically around 300%.
It's official: emerging markets are back!
Not that they ever really went away. The year 2003 was not too shabby, with big markets such as Russia and Brazil performing better than expected. But 2004 was exceptional by any standards, despite the gloss coming off Russia and President Putin's ongoing efforts to re-Sovietise parts of the economy. In many emerging equity markets such as Hungary or Poland you could have doubled your money. However, fixed income also performed strongly, with corporates and governments very active, especially in countries such as Turkey and in Central Asia.
'Markets will be hard pushed to match the total returns of 20% achieved last year,' reckons Richard Fraser of RJF Global Search.
Elvira Muratova, head of Russian and C.I.S. markets at Napier Scott agrees, noting that these high returns translated into an active jobs market in London and elsewhere. Indeed, most top-tier institutions have been active in emerging markets fixed income recruitment, with JP Morgan Chase, Credit Suisse First Boston, Citigroup, Barclays, UBS, Merrill Lynch, Deutsche Morgan Grenfell, Morgan Stanley and Goldman Sachs all taking on new people in recent months.
'Emerging Markets continue to be amongst the most active areas of hiring across all functions,' Muratova says, pointing however to two areas that generated particularly high rewards: emerging market structurers - particularly those specialising in interest rate products - and salespeople, especially those taking a strong corporate focus.
'Turkey has been coming to the fore with some high margin deals being completed over the past two years. Even more in demand are individuals covering sales to Russian, Ukrainian, Kazakh and other CIS corporates, especially if their is a focus on second-tier clients,' says Muratova.
So what sort of a background is needed? Typically education should be at least up to university level with a 2:1 degree, although many emerging fixed income professionals are likely to have an MBA. With more local talent coming to the fore, professionals are increasingly likely to be from the region they cover: in other words, East European, Latin American or Asian nationals with good language skills. A good knowledge and experience of emerging markets are vital whilst excellent presentation and communication skills are, naturally, de rigueur.
With such a profile, how much would you be worth? Fraser suggests a typical package for someone with, say, six years experience and a good track record would be on a basic of 100,000-120,000 plus a bonus of anywhere between 200%-550%.
Muratova agrees, suggesting a fixed income emerging markets structurer can expect a basic of 90,000-100,000 with bonuses taking pay to anywhere between 300,000 and 700,000. For salesmen the country of focus is critical: for the bonus, she suggests at least 100%-150% on covering sales to Eastern Europe, 150%-200% for Turkey and up to 250%-300% for Russia, Ukraine, Kazakhstan and CIS.
So with the trend for emerging markets set to continue into 2005, structurers and salesmen in particular will be saying an enthusiastic 'Cheers!' when they come to celebrate their bonuses. Or in many cases, 'Nazdrovje!'
Figures and commentary by Napier Scott and RJF Global Search