BUSINESS NEW EUROPE
BANKER'S BLOG: Russian investment bankers - poached or boiled?
July 4, 2007
Word went down from JP Morgan's head office: get into Russia. But what to do? Buy an existing player? Tried that, but the most attractive candidate, Troika Dialog, is under Kremlin pressure (so the rumour goes) to remain Russian. Who else? Aton Capital, Brunswick and UFG have already been sold. Jennings is making too much money with his newly re-branded Renaissance Group. And no one else is available or sufficiently interesting. What to do?
Then: A smooth-talking banker from a bit-Russian brokerage comes a-knocking, offering up his team at a hefty premium, but still at a fraction of the cost of acquiring another bank. So it was an easy trade for JP Morgan to take out most of MDM Bank's equities team a few weeks ago in what is unlikely to be the last large-scale poaching this hiring season.
The poached people will likely enjoy a premium payday. If it's any indication, equity analysts boasting 1-1/2 years of experience, covering a small handful of second tiers, garnered contracts for upwards of $250K: Nice work if you can get it. A multiple of at least two times the (already ridiculously high) going market rate at more senior levels was probably the premium assigned to lifting the team as one. Even in Moscow's overheated banking environment, that kind of cash for an untried and less-than-seasoned team sets a new standard, and is proof - as if more were needed - of the dire shortage of quality talent.
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