Cashing in on jobs gloom

Feb 11, 2009
Cashing in on jobs gloom

SYDNEY - THE financial crisis is proving good business for Australian firms involved in corporate recovery, restructuring and insolvency, looking to hire from an expanding pool of financial professionals.

Unemployment in Australia may be on the rise, but website eFinancialCareers.com.au lists 104 job in those areas, a significant increase on last year or even six months ago, the website said without giving comparative numbers.

The ads were typically placed by investment banks, Australian commercial banks and the big accountancy firms, all looking to take advantage of a growing number of skilled professionals in the market.

'Since the beginning of my financial year I have increased my direct workforce by 30 per cent and my indirect workforce by another third,' said Chris Campbell, national leader of the corporate reorganisation group at accountancy firm Deloitte.

Rescue firms are on a hiring binge, a godsend for many unemployed bankers.

Australian financial institutions have generally kept layoff numbers close to their chest, but analysts estimate job cuts to amount to several thousands and more are on the horizon.

The economy may not have suffered anything like the fallout seen in many developed countries thanks to a sound financial sector, but its economy is rapidly shrinking.

Job ads in newspapers and on the Internet fell for the ninth straight month in January, a survey by the Australia and New Zealand Banking Corp showed on Monday.

The government expects unemployment to rise to 7 per cent by mid-2010, from just 4.5 per cent currently.

Insolvency specialists and corporate advisory units are hiring, said to Angus Price, a partner from search firm Derwent Executive in Sydney. He cited investment banks Goldman Sachs and Rothschild which have set up restructuring units in Australia.

Restructuring
Domestic banks are also expanding their restructuring areas, hiring specialists to manage their own portfolios exposed to troubled companies, said Patrick Everest, partner at Jon Michel, a specialist financial services search form Jon Michel Executive Search.

'A lot of companies are in a lot of trouble... finance institutions in particular need help in working out how to do these recoveries,' said Deloitte's Campbell.

Australia's high profile casualties include finance companies Allco Finance Group and Babcock & Brown, mall-owner Centro Properties, child-care group ABC Learning Centres All of them heavily borrowed from top banks.

And more corporate distress is on the horizon with ratings agency Standard & Poor's predicting a spike in corporate defaults in 2009 after seven years of relative calm with just three Australian corporate defaults.

Other sectors in vogue are project finance and family offices endowments where recruiters see demand on the rise.

Project finance is set to grow after the government said it would spend A$42 billion (S$42 billion) with a priority on urgently needed infrastructure.

Derwent's Price anticipates banks in particular to beef up their project finance units to fund the infrastructure mandates.

Another active recruiting area is family office endowment, an investment structure that is typically used by very rich individuals.

'There has been a huge turnaround in family offices looking to buy distressed assets as principal investment,' said Derwent's Price. -- REUTERS

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