eFinancialCareers

As 2007 draws to a close, what was hot and what was not in the GCC? Here’s our considered opinion.

2007 was a good year for…

Private equity
In 2007 international private equity funds such as Advent, Carlyle and EFG-Hermes Private Equity all set up shop in the Middle East. Together with growth at local funds such as Dubai International Capital, Abraaj Capital and KAMCO, this fuelled demand for private equity professionals to such an extent that recruiters argued they were being paid more than their Western counterparts – US$130k to $150k, plus 50% bonus.

“Both regional and global players are investing heavily in the region, both in terms of deal sourcing and human capital,” says Russell Adam, managing director GCC at Akamai Financial Markets Executive Search (Dubai).

Local staff
Emiratisation, Saudirisation, Qatarisation – call it what you like, but it translates as governmental intervention on the domination of expats within the region. The UAE was most active, calling for 40% of workers to be locals this year.

International banks like Standard Chartered and HSBC proudly wore their quota achievement badges, but does this mean that locals are now taking up senior positions? Not really. Recruiters claim that the retail sector is the most active in taking on Emeratis or that they are confined to the back office.

Sovereign Wealth Funds
Say hello to the new global powerhouses. The Abu Dhabi Investment Authority (ADIA) now has a staggering $875bn in assets under management. This year its investments have been hitting the headlines, most recently with ADIA’s $7.5bn cash injection into Citi.

Meanwhile, Dubai International Capital invested heavily in Sony, EADS and HSBC.

Michael Ketley, managing director of Middle East recruiters MRK, says sovereign funds in the GCC are hiring: “There’s going to be a major recruitment drive for asset managers with senior capital markets skills and strategic structured investments capabilities, as well as private equity professionals.”

Private bankers
The Merrill Lynch Capgemini World Wealth Report 2007 showed that the number of HNWIs in the GCC region increased by 11.9% between mid-2006 and mid-2007 – one of the steepest rises globally.

It’s no surprise, therefore, that the war for talent in private banking has got even fiercer.

Both international players and domestic banks are getting in on the act, and a limited pool of talent has seen salaries for relationship managers in the GCC more than double this year, according to a report by the Boston Consulting Group.

And 2007 was a bad year for…

Inflation
Tax-free earnings might be a selling point for working in the GCC, but now it seems expats might need the extra cash.

Economists predict inflation to stay high in 2008, after a rate of 10.1% in the UAE and 12.2% in Qatar this year.

Housing subsidy is now a key priority in financial services salary negotiations, in the face of sky-rocketing property prices.

Sub-prime
As Western banks came clean about the extent of their exposure to the sub-prime mortgage crisis, GCC banks laughed off any exposure as extremely limited. Until now.

In mid-December, Bahrain’s Gulf International Bank unveiled losses as a result of investments in US residential mortgage-backed securities, and ratings agency Moody’s said it could affect the bank’s intrinsic financial strength.

HSBC analysts have also hinted that Abu Dhabi Commercial Bank could write down DH330m in the fourth quarter. This might be a drop in the ocean compared to the $50bn from Western banks, but murmurs have started that the GCC might not be quite as sheltered as first thought.

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