Investment Banking in Dubai
Is it a good decision to leave London/USA and look for an investment banking opportunity in Dubai? Is Dubai the right place for career growth or earning a high salary in investment banking? If one starts a career in investment banking in Dubai and looks for an exit opportunity, is there any?
In this article, we will try to answer all of the above questions and more.
Let’s look at the sequence of the article –
- Investment Banking in Dubai – Market Overview
- Investment Banking in Dubai – Services Offered
- Top Investment Banks in Dubai
- Investment Banking in Dubai – Recruitment process
- Investment Banking in Dubai – Culture
- Investment Banking in Dubai – Salaries
- Investment Banking in Dubai – Exit Opportunities
Here we discuss the Investment Banking market in Dubai, however, if you want to know more about Mergers and Acquisitions, you can look at M&A Course.
Investment Banking in Dubai – Market Overview
Investment Banking market in Dubai is emerging. Investment bankers in Dubai mostly work for MENA (The Middle East & North Africa) region. This MENA region covers almost 20 countries (Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, West Bank and Gaza, and Yemen). And deals in Dubai mostly revolve around these countries.
Bulge Bracket Investment banks Bulge Bracket Investment Banks Top 10 bulge bracket investment banks are - Blackstone, Goldman Sach & co, Morgan Stanley, J.P Morgan Chase & co, Bank of America Merrill Lynch, Credit Suisse, Citi, Deutsche Bank, HSBC, UBS.typically work on larger deals whereas the local banks handle smaller deal sizes.
The top investment banks in Dubai (the subsidiaries and the local ones) cover many industries. Most of their clients are financial sponsors, sovereign wealth funds, and other holding organizations.
And most of the deals that happen in Dubai are basically handled by the investment bankers in London or in the US. Investment bankers in Dubai concentrate on maintaining a healthy relationship with clients; however, the technical details are taken care of by the professionals in the US and Europe.
So, if you’re planning to work in Dubai (because you want to go back to your birthplace), think twice. If you would like to grow more and achieve better career prospects, you may reconsider your decision. But on the other hand, if the salary is what you’re after, you are on the right track.
Let’s look at the services offered by the top investment banks in Dubai.
Investment Banking in Dubai – Services Offered
We already know that bulge bracket investment banks have subsidiaries in Dubai and they handle the larger deals in most of the cases. Their expertise is not confined to Dubai only; rather their expertise is global.
Thus, we would explore the expertise and services offered by the local investment banks in Dubai.
Here is a snapshot of an Investment bank in Dubai (Noor Capital).
As we note from above, they perform the following activities
- Corporate Finance Advisory: The local investment banks offer a wide range of corporate finance advisory, e.g. risk management, deal structuring, capital structure, credit rating, and liquidity. As the banks handle deals that are smaller in size & scope, they are cordial, service-oriented and customer-centric.
- M&A Expertise: To enjoy the benefits of synergy, it’s important for two or more companies to come together in the form of mergers and acquisitions. Through mergers and acquisitions that are different in scope and nature, they need similar expertise which is offered by local investment banks in Dubai.
- Corporate Advisory: Small investment banks in Dubai offer corporate advisory services to maintain a continued focus on UAE’s small to medium-sized companies. They offer a clubbing of many services e.g. M&A services, equity researchEquity ResearchEquity Research refers to the study of a business, i.e., analyzing a company's financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports. , and debt advisory services.
- Private Placements: Private placements are one of the most important services offered by investment banks in Dubai. They bring in sophisticated investors and the companies together and help the companies sell complex securities to those sophisticated investors who understand the potential risk and rewards. This helps the companies generate proceeds from sales in much less time.
- Structured Investments & Other Services: Local investment banks in Dubai also offer structured investments (as a single security or a basket of securities) and other customized services. The idea is to focus on small and medium-sized companies so that get all the assistance in regards to capital and financial advisory services, both in domestic front and at international level.
The services above may seem similar to a global investment bank. But there are two things that are different –
- First, to these local investment banks, the relationship is everything. And every deal happens with mutual trust and a cordial bonding.
- Second, the focus of these small investment banks is to uplift small and medium-sized companies.
List of Top Investment Banks in Dubai
Apart from the Tier 1 Investment Banks, there are 4 investment banks in the Middle East that are noteworthy. Let’s have a brief on each of them –
- Rasmala: This is one of the biggest investment banks in Dubai. Rasmala was established in the year 1999. The assets under management for Rasmala are $1.2 billion and its capital market transactions are worth $500 million.
- SHUAA Capital: SHUAA was established back in 1979. AUM of SHUAA Capital is $232.23 million. And it has lent around $1.23 billion to small and middle enterprises.
- KFH: This is another big name in investment banking in the Middle East. In 2016, the net income of KFH was $3.18 million and the total assets were $4265.25 million.
- Noor Capital: Noor Capital was established in the year 2005 and since then it has been offering a broad range of investment placement services mainly in the Middle East. Each transaction Noor Capital handles is of at least $5 million to $20 billion. The assets under management (AUM) of Noor Capital are $500 million.
Investment Banking in Dubai – Recruitment process
The recruitment process in Dubai is completely different than the prevalent practices in UK and USA. And if you’re coming from UK or USA to find your roots in Dubai, things may seem difficult on the surface.
So, here’s a framework you may follow if you want to know about the recruitment process in Dubai –
- Look for an internship: Start with this method. Apply to as many investment banks in Dubai for the internship. The focus would, of course, be on the bulge bracket banks; but you can also select few mid-level banks for the application. An internship can be a ticket for getting into the investment market and making your mark, especially if you have almost no experience in investment banking at all.
Also, check out – Investment Banking Internship
- Start with head-office/subsidiaries: If you’re in other countries e.g. in the UK or in the USA, then it wouldn’t be feasible for you to directly apply to Dubai banks (or subsidiaries). Rather look for investment banks which have offices in Dubai and while applying mention your preference about Dubai.
- Connect with Job Consultants: If you don’t know anybody in Dubai, then consultants will be your best point of contact. Make a list of consultants in the region and try to connect with them in-person (if possible). Build a rapport with them and tell your story in a way that impresses the consultants. And then you can start with the entry points. Sometimes, you will find job openings provided by consultants like the one seen in the snapshot below –
- Interviews: In Dubai, the interview process is distinctive on the basis of the size of the bank. For a bigger bank, you will have multiple rounds – technical round, HR round and final round with the MD. For smaller banks, it may start with technical round and then with the MD.
- The focus of questions during the interview: In Dubai, the interviewers ask questions about broader topics to see the understanding of the basic concepts in accountingBasic Concepts In AccountingAccounting concepts are the principles, assumptions, and conditions that govern accounting's foundation. They ensure that the accounting is done in a way that the financial statements present a true and fair view., financial modeling, valuation, pitch book, Mergers & Acquisitions, etc.
Investment Banking in Dubai – Culture
- Like in any other Investment Banks in the US or UK, you are expected to work for more than 100+ hours a week most of the time.
- The primary difference between the culture of Dubai vs Europe/US is getting work done. In Dubai, they just need to get the work done on time and without any delay. In US/UK, the thing that also matters is a number of hours spent in the office.
- Generally periods of June, July and August are slowest and most bankers take holiday during these months. That means you would be able to maintain a great work-life balance even after having to work 100+ hours a week for several months at a stretch.
Investment Banking in Dubai – Salaries
As you already know, the best part of working in Dubai is to receive tax-free earnings. According to an investment banker working in Dubai, the basic salaries and bonuses are similar as it is paid in Europe. However, the additional advantages you will get are two-folds – first, you will receive tax-free earnings plus you will also receive a housing allowance of $30,000 (approx.).
According to the survey conducted by Morgan McKinley, it has been seen that in 2015, the salary in banking and financial services increased by 7-9% on an average. Let’s look at the detailed report of where the salary of investment banker and private equity stands as of the year 2015 –
If you look at the list, you would see that the salaries of investment bankers are a little lesser compared to the salary of investment bankers in London (around 50,000-60,000 UK Pounds per annum). But what’s important to note that investment bankers in Dubai don’t need to pay any taxes which makes the earnings double instantly.
Also, Investment Banking Associate SalaryInvestment Banking Associate SalaryAn Investment Banking Associate is hired by an investment bank. An Associate can be a promoted Analyst after three or four years, or he can be hired directly from a reputable business school. A average annual compensation for an Investment Banking Associate is from $75,000 to $250,000.
Investment Banking in Dubai – Exit Opportunities
- Due to the cultural difference, the idea of exit after 2-3 years of investment banking isn’t valid here. People come into investment banking for a long-term and they stay for a long period of time. So, if you talk about exit opportunities, people rarely look for them once they get into banking.
- Moreover, even if they want to quit investment banking and would like to join in private equity; the opportunities for private equity is very limited compared to the opportunities in Europe and the USA.
- However, if people move they move for two particular options. The first is sovereign wealth funds (SWF) and the second is private equity (even if the opportunity is limited).
Also, have a look at Investment Banking Exit OpportunitiesInvestment Banking Exit OpportunitiesAmong the several exit options available to investment bankers are: 1.Private Equity 2.Hedge Funds 3.Strategy Consulting 4.Fin-Tech 5.Advisory for large corporates.
Dubai is great if you want to make money in investment banking. However, if you look for more opportunities and growth, then maybe you should look for Europe and USA because, at the end of the day, only more money wouldn’t give you the satisfaction you would like.
This has been a guide to Investment Banking in Dubai, their services offered, the recruitment process, their culture, top investment banks in Dubai, salaries, and exit opportunities. You may also have a look at the following article for learning more about Investment Banking –