Why I should be paid more

My employer suffered a 19% share price slump in the three weeks I was on leave.

Fancy that

I've revamped my links using Google's/Blogger's new features.  I think it's kind of cool - also makes it easier to fish for blogging ideas.  Except I'd really prefer to have "Business only" Reuters newsfeeds.  If you know of any other blogs, news sites, and websites worth looking at, let me know!

Bankers vs Management Consultants

Another article to fan the flames of war between Bankers and Management Consultants (needs subscription to McKinsey Quarterly).  According to the article:

"A shortage of strong internal candidates for critical positions will force European banks to overhaul their talent-management efforts in order to stay competitive and ensure strong growth."

Bankers will point out that this article (a) is stating the bleeding obvious, and (b) simply contributes to the already-low employee morale by vaguely referring to some of them as 'second-tier talent'.

Consultants will point out that (a) hey, they're just telling everyone what bank executives told them, and (b) they added value by stating the bleeding obvious in prettier pictures.

LINK DUMP!!

CBA looking to acquire Australian arm of ABN AMRO.  From what I've seen for some time now, CBA has been a relatively distant thought in the corporate finance arena (with possible exceptions in project finance and equity sales), while competitors NAB, ANZ and Westpac have been relatively known quantities due to broader and more aggressive offerings.  This, along with the Westpac/St George merger (which is still unfinished, by the way) will tilt the game somewhat.

A new race for the North Pole is born.  Polar bears ponder shaving and migrating to more tropical regions.

Nick Moore at MQG must have put on a great song-and-dance number to get the 12% one-day bump up yesterday.  Disclosure 1: Rockett Fuel has MQG shares.

Via Dealbreaker: amusing job ad.  Even more amusing are the commenters all trying to out-geek and out-quant each other over a simple "heads or tails" exercise, while simultaneously failing in basic counting when trying to respond to each other. 

Will be back in Sydney by this time next week... 

London!!

In the rush leading up to the London trip, I haven't had a chance to write Part Two of the Conference.  In any case I will have to revert back to my notes (conveniently still on my work desk), so that will have to wait a little longer.

I had lunch with a contact based in London, who confirmed what I've only read about to date; essentially, the London market is stuffed.  Deal volumes are down, only mild improvements in debt overhang, with recession prospects and a depreciating sterling likely to magnify the problems.  While the investment banking employment market is not entirely dead, you do need to look harder for the right opportunities.  It was certainly a very informative chat over a couple of beers (plus some free advice on the London lifestyle), and certainly someone worth staying in touch with.

An interesting development in London (and one more than likely to be repeated in Australia) is the increased use of mezzanine debt and equity/quasi-equity to take up the slack from senior debt.  While more expensive, the non-cash nature of the costs means that it improves the cash conservation of a deal, improving debt serviceability to make the deal palatable for senior and subordinated debt investors.  

We are seeing a slow but steady move towards mezz debt in Australia; in fact this was one of the key topics discussed at the conference.  How well it gets accepted I think will depend on arriving at terms that maintain the right risk-return metrics as well as the senior ranking against equity.  Will mezz holders get pro rata benefit from dividend recaps?  Are equity kickers the way to go?

Overshadowing all this (and may possibly render it all moot) is that the credit crisis has not fully unravelled, and it is now widely accepted that it is impacting hugely on the economic fundamentals.  Combined with higher commodity prices feeding into higher inflation expectations, the questions will need to move from "how long will the credit crisis last" to "how long will the slower growth in the developed economies last".  One imagines that economic fundamentals will take far longer to turn around than declines in the debt or equity markets, but one that feeds back to the prospects of those tradeable securities.