Emerging markets offer excellent potential to get ahead, says Linda Klemme, partner of the financial services practice at global search firm CTPartners.
There is no doubt that financial markets in some developing economies have grown in depth and sophistication in the past five years. There is, however, still some way for the maturation to run. Non-G10 countries are still putting in place the infrastructure; whether that is economic infrastructure through central banks, or political infrastructure. And while the adolescent financial markets in Brazil, Russia, India and China mature, there are infant markets not far behind. HSBC and Citi are looking at North Africa: that's the next Russia.
Exposure to emerging markets is now a valuable addition to the CV. The clever investment banks use emerging markets as a training ground for their graduate intake. The education is broad and deep: you have to understand economic fundamentals; you learn about credit, risk, and foreign exchange; you have to get to grips with how political risk and instability can influence the performance of local markets.
As there is less stability, individuals may experience a broader array of different scenarios over a set period of time. Experience in illiquid markets is precious: you develop sharper skills. In G10 countries you're handling larger deals, but it's more liquid and the pricing is more certain; it's easier to get in and out of financial instruments and the bid-offer spreads are narrower.
Quite apart from the richness of the learning, emerging markets are one of the frontiers to make a lot of capital for investment banks, particularly in Russia, the Middle East and North Africa, fuelled respectively by privatisations, high oil prices and increased political stability. In the Middle East, infrastructure modernisation is creating strong demand for project finance.
People with experience in these markets can demand relatively senior positions and high levels of compensation. The experience that senior managers can gain in emerging markets platforms can be leveraged into senior roles managing global fixed income businesses.
Citi, Deutsche Bank, HSBC and JPMorgan have cutting-edge platforms and have the most depth and range in emerging market products. They have established businesses in local markets where growth is rapid. Some investment banks are just beginning to build their emerging markets platforms, while some have doubled or tripled the size of their existing platforms in the past two years.
In 2006/07 staffing the emerging markets desk started to become a real challenge for leading banks. There is a lot of movement in the talent pool and there doesn't seem to be enough to fill the positions required.
Top talent is starting to emerge from the markets themselves. A good example is Mehmet Mazi, who is Turkish and who, prior to his appointment as head of the emerging markets group EMEA for the bank, built up HSBC's Istanbul office to become one of the most successful emerging markets platforms.
Leading investment banks increasingly recognise the quality of many graduates from some universities in developing economies. They also recruit from the World Bank, the IMF and from national central banks.
It is premature to talk of globally mature financial markets, but sophistication is increasing in the financial markets of emerging economies and there is a geographical broadening of the talent search by investment banks. There can rarely have been brighter prospects for individuals able to seize the opportunities.