Latin Finance - July 2008 - (Page 21)

compensation survey beef up headcount, particularly at new international offices. “While we see many global players reducing their headcount, we are opening this year several offices outside Brazil,” says Nishikawa. Aggressive Hiring Itaú already has a broker-dealer in New York, London and Hong Kong and plans to open this year broker-dealers in Tokyo and Dubai, as well as offices in Beijing, Singapore and Abu Dhabi. “We are aggressively looking for people in all these new locations,” says Nishikawa. Meanwhile, back in Brazil, outsiders say the shop keeps valued talent with lucrative lockup packages, which further fortifies it against poaching from other shops. “It’s very hard to pull anyone out of there,” says a search executive, about Itaú. And Nishikawa notes a reduction in the speed at which foreign competitors are building out. “Even if the market is slower than last year, I think we’ve increased our market share in most of the business,” adds the banker. Nishikawa sees opportunity in the fact that Itaú is in for the long haul and got there long before last year’s boom went bust. However, Options Group predicts that the foreign shops are really here to stay this time. “Because of where a lot of people are positioning themselves in Brazil, it will be harder for them to pull out like they have in the past,” says DeLucia. “We’re in a cycle now where they will, just like any market, have to maintain some kind of share.” Working in the favor of growing shops is the fact that counter offers are relatively rare, according to Options Group, which cites cultural factors for this. “The one thing we haven’t seen yet in Brazil is people being susceptible to the counter offer,” says DeLucia. $225,000-$250,000 in Mexico. With global debt markets in a slump, the heavily debt-centric capital market will likely see pay stay stagnate. “Mexico is at a different level of development. It’s years beyond Brazil in terms of the maturity of the market. There’s less comp flexibility there,” says DeLucia. US-born structured finance professionals are meanwhile moving to Mexico due to its relative strength. For roles that do not involve direct client contact, this can work, unlike in Brazil. “If you have a product specific skill set, that skill set is transferable to the Mexican market,” says DeLucia. “You Locals have advantage, says DeLucia can be a Russian quant and you don’t even have to speak Spanish.” By contrast, Americans with EM sales and trading experience who feel they can sell international equities from São Paulo and take a Berlitz-style Portuguese class should think again. “They are not only not getting the jobs, but also being disappointed by their experience,” says DeLucia. “There are a lot of people trying to jump on the gravy train in Brazil, and not being from there, there’s very little you can do.” Mexico Depression In Mexico, Options Group estimates that compensation is on average a third less than in Brazil. For example, a private banker at VP or director level makes $400,000 in Brazil versus Proving Commitment As Wall Street’s finest scrap for market share on the ground and talent continues to repatriate to LatAm, the local bid for bankers should remain underpinned. The heat will likely remain on in Brazil, where managers continue to focus on talent with experience of highly structured products and derivatives. Meanwhile, locals Unibanco and Bradesco are expected to follow Itaú’s lead and bid hard for seasoned professionals. Adding to the froth is the trickle of new players interested in forging a long term presence, particularly in Brazil. Royal Bank of Scotland wants to hire in Brazil, following its acquisition of a LatAm investment banking team from ABN AMRO, for example. “It comes down to a question of long term commitment – who’s actually going to see this through. People that remain standing after the consolidation, after some of the pain comes into the market, will be some of the real beneficiaries of the long term growth,” says DeLucia. “People who are down there to make a quick buck will go by the wayside, and those investing with a long term commitment will have a lot to do over the next few years,” he adds. Brazil in particular is experiencing the same compensation trend as Mumbai, where hirers are still having to give guarantees and pay up, based on the supply/demand employment market imbalance. Other hot EMs like the BRICs are feeling the same pressure. “There’s too much supply of candidates here in the US but in those countries there remains too few talented, experienced professionals and they have to get paid or they’ll go somewhere else. There’s too many banks, too many competitors and too few people with experience and talent locally and that trend just hasn’t stopped in Brazil, Russia, India and China – even in a sustained global downturn,” says DeLucia. However, since last year’s bonanza was not sustained, managers need to think carefully about how to set compensation for the long haul. “If there’s one lesson that maybe a Brazil or some of the emerging markets can take from the US experience is to not overcompensate just because you had a great year,” DeLucia concludes. LF July/August 2008 LATINFINANCE 21

Table of Contents Feed for the Digital Edition of Latin Finance - July 2008

Latin Finance - July 2008 Contents Investment Banking Outlook Compensation Survey Colombia Investment Banking Borrowers vs. Investors Banorte Profile Braskem Financing Strategy Brazil Hydro Finance Peru Port Privatization Panama Money Flows Argentina Local Markets Guide to Banking Technology Who Said That?

Latin Finance - July 2008

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