HK
Asia gearing up for LBO boom
21 January 2008
Leveraged finance professionals might be twiddling their thumbs in Europe and the US, but this is far from the case in Asia.
Last December, Tim Donahue, head of leveraged finance in Asia at JPMorgan, told Dow Jones he predicted an increase in buyouts this year as private equity buyers shift their focus (and money) away from lacklustre US and European markets to Asia.
Asian LBOs are already looking sprightly. According to Dealogic, Asia-Pacific LBO loans hit a high of US$28.6bn from 31 transactions last year, up from US$21.2bn for 23 deals in 2006.
Credit Suisse has also predicted a strong year for the region, and has indicated it has been scaling up operations to take advantage of growth in the LF arena.
And where there’s business, there’s hiring. The greatest demand is for financiers with experience of the region, reports recruiter Matthew Hoyle, Asia Pacific director for search firm Matthew Hoyle International.
“The leveraged finance market is still bullish in Asia, with the consensus being that the credit crisis is not really being felt yet,” he says.
“Staff-wise, it is very hard to get people with regional experience. There is quite a lot on offer from the US and Europe, but people who are already working in LF here are much more sought after, and therefore not cheap,” he adds.
Salaries and bonus packages range from US$100k (HK$780k) to US$250k (HK$1.95m) for an analyst, right up to anything between US$800k (HK$6.2m) and US$1m-plus (HK$7.8m) at director level, although some banks were paying as much as US$2m (HK$15.6m) for star performers last year, he points out.
Much of the growth in the Asia Pacific market has been driven by large private equity-led deals in the Australian market, says Richard Lyons of Sydney-based Carr-Lyons Search & Selection.
“We have already seen in recent months a number of banks strengthening their Asian teams with experienced staff from outside the region – a good idea as the markets in London and New York are quiet,” he points out.
Another attraction is housing allowances of between US$5k and $10k (HK$40k to $80k) per month and other benefits on top, he adds.
