Are you an Asian investment banker currently fretting about looming year-end layoffs as your firm formulates its headcount plans for 2015? Want to make a pre-emptive move?
One common route out of the industry in Asia, as we’ve already noted, is to move to an in-house M&A job in the corporate sector.
But investment bankers who want to stay in the finance sector may want to apply for private-banking jobs in Singapore, Hong Kong or China.
“These days there’s quite a bit of interest in hiring investment bankers into private banks in Asia as the IBs are still perceived as over-staffed,” says Rahul Sen, a former private banker and director at search firm Sheffield Haworth in Singapore. Investment bankers are typically sought after for two main reasons, says Sen: their client relationships and their ability to execute investment banking deals for the bank's wealthiest private clients.
"They also tend to be highly analytical and well versed with financial products, hence able to readily grasp investment concepts and product ideas. Private clients are typically impressed with their highly professional disposition," says John Koh, a former private banker who is now the managing director of Singapore search firm WMRC.
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While private banks in Asia are bolstering their middle-ranks by recruiting from mass-affluent retail banking, investment bankers usually move into more senior roles.
“Right now in Singapore my search firm has two investment-banking candidates – one from a European bank; the other with a Chinese bank – who are in advanced conversations with our private banking clients,” says Sen.
These candidates are following in the footsteps of bankers who have risen to the top ranks of Asian wealth management after making the switch from investment banking.
Benjamin Cavalli, promoted by Credit Suisse earlier his month to lead its private bank in Southeast Asia, spent three years of his early career at UBS Investment Bank in Hong Kong. Daniel Harel, head of ultra-high net worth at UBS Wealth Management in Singapore, was with his firm’s investment bank for 12 years.
More common on the mainland
In mainland China’s talent-short private banking sector, the drive to hire investment bankers is stronger than in more mature markets like Singapore and Hong Kong. “For front-desk roles at private banks, every boss in China would love to have 10% to 30% of their team made up of bankers from departments like M&A and corporate finance,” says Shearer Liu, a private-wealth human-capital management specialist from headhunters Pro Matrix in Beijing.
Private banks in China are also keen to poach investment advisors, according to Liu. “They want to leverage their portfolio-investment skills and industry-focused knowledge. I can see private banks in China hiring more and more IB people for investment-advisory and product roles based at their HQ.”
Become a full-service banker
The banks most likely to hire or promote investment bankers into client-facing private-banking roles are generally large institutions – such as Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and UBS – that have integrated their investment banking and private banking operations.
“In Asia, most ultra-high-net-worth clients own large or medium-sized enterprises, so they often expect one private banker to service all their needs and provide corporate-banking and investment-banking services too,” says Liu.
“Having IB-background private bankers can build revenue and client relationships. At Credit Suisse, for example, any private banker can introduce appropriate cross-selling business leads to their IB department and then get involved and receive a fair revenue split,” adds Liu.
"I-bankers have a strong understanding of business owners and their concerns," says Koh from WMRC. "Many have a good knowledge of business operations and financial modelling, which serves them well in starting intelligent conversations with private clients."
Old investment banking habits die hard once people make the switch. “Investment bankers are natural deal makers, so they run their private banking business by using their banks’ balance sheet, lending or raising funds for the client and ensuring that a large part of the fund-raise comes back as AUM,” says Sen from Sheffield Haworth. “This is a double-fee opportunity but does involve taking some risk on the balance sheet.”
Investment bankers wanting to take private-banking jobs in Singapore or Hong Kong to achieve a better work-life balance may want to think twice. First-year revenue targets at Asian private banks are becoming increasingly onerous and firms face tightening profit margins.