Brain Gain: New boutiques, offers attract expat bankers to Australia

© Reuters. FILE PHOTO: A view of the central business district and surrounding city can be seen from the observation deck of the Sydney Tower Eye as the state of New South Wales continues to report low numbers of new daily cases of coronavirus disease (COVID-19) in Sydne

Posted by Scott Murdoch

HONG KONG (Reuters) – Australian overseas investment bankers are returning home in large numbers, lured by the creation of new boutique advisory firms, a surge in business deals and the security of a country relatively unaffected by the coronavirus pandemic.

Signs of a strong economic recovery after a brief pandemic-triggered recession underscore a trend that is gradually reversing a long tradition of Australian bankers traveling overseas to more tax-friendly global financial centers.

“There’s a brain boost in Australia. We’re gaining additional knowledge and experience,” said Nick Hughes, co-head of Australia at UBS.

Corporate Australia got off to a scorching start to 2021. According to Refinitiv data, M&A transactions worth 6.21 billion US dollars are already underway, which is more than seven times higher than in the same period last year. This puts Australia in second place in Asia Pacific in terms of transaction value after China, compared to seventh place in the same period in 2020.

The trend is expected to continue in the short term, with large ticket offerings such as the possible sale of casino operator Crown Resorts and the divestment of some financial firms in the pipeline.

The entry of two boutique firms, Barrenjoey Capital and Jarden, into the fray has fueled a talent war in the country and raised wages by at least 20%, making it a rare ray of hope for rainmakers.

Jarden, the Australian subsidiary of the New Zealand investment bank, has hired eight Australian dealers and analysts for foreign bankers as part of its campaign to build its local franchise, according to a spokeswoman. Goldman Sachs (NYSE 🙂 has returned eight Australian employees from offshore to Australia, and Swiss bank UBS has had four returnees in the past few months, according to bank spokespersons.

Bank of America (NYSE 🙂 has hired two senior expatriate bankers, said the bank’s country chief Joseph Fayyad.

“As new entrants establish a presence and the established companies defend their positions, more seats are available for high-ranking bankers,” Fayyad of Sydney told Reuters.

Most returnees from London and New York land in Sydney. Her experience ranges from mid-career to senior bankers to legal and compliance staff.

You are among the lucky few currently allowed to enter Australia, which has closed its international border to almost all travelers but brought back nationals and permanent residents months ago as a pandemic protection. The dramatic move seems to be paying off, as Australia recorded fewer than 30,000 COVID-19 cases and 910 deaths, far fewer than many other developed countries.

“I think Australia’s outperformance during COVID has put the focus on the benefits of working and living Down Under. The combination of more available seating and Australians’ greater desire to come home has really fueled the trend,” said Fayyad .

“A little hectic”

The return of expatriates counteracts a long-established trend for Australian finance professionals to move offshore, partly to gain experience and partly to avoid Australia’s relatively high income tax rates.

According to local bank managers, the increased activity in onshore business allows banks to offer thicker paychecks for returnees who are used to salaries in New York and London.

Aidan Allen, head of investment banking at Jarden Australia, said the “brain gain” has helped the emerging bank grow its team to nearly 100 since it was founded a year ago.

“A lot of our talent comes from the offshore sector. People looking to return home have been a great opportunity for us,” said Allen. “We think there is a difference, it has given us the opportunity to have a more diverse and experienced bank.”

Rival Barrenjoey started with 50 employees in September and now has about 220 employees, a spokeswoman said.

The influx of expatriates should also be a warning to the incumbents, BofA’s Fayyad said: “Bankers who have been here for a while need to acknowledge that there is a new group of talent out there who are a bit hectic, a source in their step, they want to make a name for themselves. ”

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