Australia becomes a magnet for banker "refugees"

Australia becomes a magnet for banker "refugees"
By Cecile Leforte Reuters - Sunday, June 1 01:38 am

SYDNEY (Reuters) - Australia has become a refuge for a new endangered species: the high-flying banker.

Bankers facing layoffs in Europe and the United States are looking increasingly at Australia's drum-tight market, led by expatriate Australians tempted home by a buoyant local economy.

About 34,000 Aussie nationals have returned from Britain in the past 12 months, the highest number ever registered, according to international placement firm Link Recruitment.

"I came back for three reasons: I was given a great career opportunity to run a broader business in Australia, I turned 40 and I am about to have my first baby," said Grant Lovett, head of fixed income at UBS Australia.

Aussie-born Lovett returned home after a 12-year stint in New York and London where he worked in credit markets at Bankers Trust, Barclays Capital and now UBS. Wall Street and the City of London are now in the doldrums but Sydney is brimming with deals.

Fuelled by a commodities boom, Australia has been the target for $59.6 billion (30 billion pounds) in mergers so far this year, the world's fourth-largest M&A market, according to Thomson Reuters data.

"Australia is more interesting, there is a lot more going on here in the fixed income markets than a few years ago," Lovett said.

Although still in its infancy compared with Europe and the United States, the local debt markets have grown significantly since 2000, fuelled by the nation's mandatory retirement savings programme, known as superannuation, put in place in 1992.

Pension funds have doubled in size since then and now exceed A$1 trillion (482 billion pounds), making funds under management in Australia the highest per capita in the world.

Lovett belongs to a growing contingent of Australian expats ready to return despite smaller salaries and bonuses.

"It's across all industry sectors, but the largest is in banking and financial firms," said Jason Cartwright, general manager of global services at Link Recruitment in Melbourne.

At the same time, there has also been growing interest from foreigners in heading Down Under.

Cartwright said just more than half of job applications he received came from foreigners outside Australia, up from around 35 percent just a year ago. The bulk of the arrivals were from India, New Zealand, the UK, the Philippines and South Africa.

SEA CHANGE

Up until last year, most of the flow tended to be out of Australia, with bankers looking to gain international experience and the best often lured by more lucrative packages offshore. But in the first quarter of 2008, there was a 14 percent decline in the number of Australians heading to London for work, according to a survey conducted by Link Recruitment.

"There has been a definite change of sentiment. Candidates want to know what's happening in Australia," said Francoise Gelbard, senior researcher at Talent Partners," an executive search firm.

"Compared to last year, we're having a better response from people considering coming home from the UK, the United Arab Emirates or Asia because the financial markets are in a period of uncertainty."

A buoyant economy, underpinned by a strong Aussie dollar, 17 years of uninterrupted growth and a near 33-year low unemployment rate of 4.2 percent, is a big attraction.

Australia banking sector has been relatively unscathed by the subprime mortgage meltdown and firms are still struggling to fill positions due to a very tight labour market.

"The situation remains the same as in 2007, that is a massive talent shortage across the board," said Link Recruitment's Cartwright.

Contrary to the U.S. and the UK which have seen thousands of job cuts at banks such as Citigroup, UBS and Lehman Brothers, there hasn't been major layoffs in Australia and financial institutions are robust.

Some, such as the local units of UBS and Lehman Brothers, are even expanding their fixed income operations, the same sector that is taking a battering in the world's big financial centres following the subprime crisis.

"I receive a lot of calls from overseas Australians inquiring about the state of the local job market. I tell them to send their curriculum vitae," said UBS's Lovett.

The inquiries typically come from hedge funds that have closed or financial firms that have laid off staff.

Quasi hedge fund Kapstream, which is also expanding and recruiting as its assets grew to A$350 million from A$100 million in just 12 months, has noted a significant interest from Australian nationals working in structured credit in London.

"We have seen two sources of motivation: one, to come back home, and two, to leave their area of expertise that is not doing well offshore," he said.

If employment remains the major driver for most expat returns, lifestyle comes a close second.

Credit trader Ben Metcalfe has just come back to ABN AMRO in Sydney after a two-year stint in London, and is enjoying his daily motorbike ride to work from Manly, a famous beach suburb of northern Sydney.

"My commute was cut down to 15 minutes from nearly two hours in London," he added.