Investment Banking: Dubai Edition
Dubai: the hottest emerging market in the world? The best place to work in finance?
Or is it all just a mirage in the desert?
The truth is somewhere in between, as you’ll find out in this interview with a current investment banking analyst who works in Dubai.
We cover this reader’s background, what the investment banking industry in Dubai is like, how you break in, and the all-important exit opportunities.
In the Beginning…
Q: Can you tell us about your background and how you got interested in Dubai?
A: Sure. I’m from the Middle East originally, and was studying at a university in Europe a few years ago.
As part of my school’s requirements, we had to complete internships – most people opted for Paris or London, but I was interested in more exotic locations.
I was from the Middle East and had been reading a lot about Dubai, so I decided to apply for internships there instead.
Q: Ok, so you’re in Europe but you want to work in Dubai. How do you actually apply for these internships? Was it just through on-campus recruiting?
A: One difference between Europe and the US is that when companies come to campus here, no one takes resumes or does interviews – they just come for informational and networking purposes. Then they tell you to apply online, go through numerical tests, assessment centers, and so on.
I went to all these networking events and also did the online applications afterward – in addition to both of those, I contacted alumni and searched for people with similar backgrounds to me on LinkedIn.
Q: You said “similar background” – what do you mean exactly, and what kind of response rate did you get?
A: I looked for others who were from the Middle East, had studied in Europe, and then gone back to the Middle East to work there.
Surprisingly, I got a higher response rate from people I found on LinkedIn than from alumni.
This was probably because we had a shared background, and because most other students in Europe were not thinking about working in Dubai.
Q: Wow, very surprising. So what were the results of your internship search?
A: I got a 6-month internship at a bulge bracket bank there – in Europe it’s common to have 6-month internships vs. the summer internships you see in the US.
Then I went back to school the next year to graduate, and accepted a return offer from the same bulge bracket bank.
The State of the Market
Q: So is Dubai amazingly awesome? Is it the end-all-be-all or are people drinking a little too much Kool-Aid when they talk about the finance industry in the Middle East?
A: Dubai is overrated. When most people think of it, they look at all the huge buildings and the media stories about construction projects here, and all the oil barons using it as their playground.
The truth is a bit different – while there’s a lot of growth here, most of the companies we work with are outside Dubai.
We’re responsible specifically for MENA (the Middle East and North Africa), which consists of about 20 countries.
We cover all industries and all products, but most of our clients are sovereign wealth funds, financial sponsors, and other holding companies.
They’ve definitely been on a buying spree, so from that perspective it’s interesting.
When it comes to actual deals, though, we often manage the relationship and then the industry team from London handles the more technical details – especially on larger deals.
Q: Interesting – so is the finance industry there dominated by other bulge bracket banks that leverage their presence in London? Or are there local boutiques as well?
A: Regional boutiques do exist, but they’re limited to smaller IPOs and smaller deals in general – anything large is handled by bulge bracket banks based in the US or Europe.
Wheeling & Dealing
Q: You mentioned that the London industry team often handles the more technical details. So do you get to do much modeling work? Or is it all qualitative?
A: We get exposure to both. The London team has more of a presence on larger deals – they argue that they have more expertise and that they should control all the models as a result.
For anything smaller, we do the valuation and modeling work and they’re less involved.
If it’s an intra-regional deal – both the buyer and seller are from our region – then we’re also more involved and the London team doesn’t do quite as much.
Overall, though, it’s a lot different from working in a large group in London or New York because there are more “random” tasks and the teams here are smaller.
Q: You mentioned smaller deal teams – how are they different from what you’d find in London?
A: Our entire team is less than 30 people, and there are fewer mid-level bankers. We have a bunch of Analysts, a few Associates, and then some Directors and MDs but relatively few VPs.
So you get to work more closely with the MDs, and it’s not unusual to work directly with a Director or MD as an Analyst – which would be unusual at a bulge bracket bank in New York or London.
Lifestyle & Culture
Q: So how much do you work each week? Is this still banking or do you work fewer hours because it’s a regional office?
A: It’s still banking. I was working about 100 hours a week for the past 2-3 months, but like any other banking role there’s downtime and slow periods as well.
The average hours aren’t much different from what you’d expect in banking, but there’s less face time and they care more about work getting done vs. staying in the office late every night.
One part unique to the Middle East is that the entire region shuts down in the summer – CEOs are traveling and on holiday, so August is our slowest month (also due to Ramadan coinciding with the summer this past year).
M&I Note: The same is true in the US, though not to the same degree – lots of executives and bankers take their vacations in August.
Q: What about the culture? Do you hang out with your co-workers outside work?
A: There isn’t too much interaction outside work, even when we have free time – as an intern it was much different and Analysts / Associates would usually spend time with each other.
We might have dinner together, and we do have “team events” every few months to build camaraderie.
The Bottom Line
Q: Let’s talk about money. How much do you get paid, and is Dubai more lucrative than London?
A: Base salaries and bonuses are both the same as what you get in London… BUT we have no taxes here so effectively you make almost twice as much.
We also get a housing allowance of $30,000 US Dollars per year, which is also untaxed.
Normally it’s a bad idea to go into banking for the money, but if you work in Dubai you will make more than in other regions.
M&I Note: This trick doesn’t work 100% if you’re a US citizen – you still have to pay some US income taxes even if you live abroad.
You can deduct taxes for up to around $100K in income – which saves you a lot – but your taxes won’t be exactly $0.
Disclaimer: I am not an accountant / lawyer. This is not tax advice – please consult a professional.
Q: Wow, I’d move to Dubai in a heartbeat if I didn’t have this annoying US passport. What about exit opportunities?
A: Unlike the US, a lot of people here actually go into banking and plan to stay in it for the long-term. The whole concept of “Do this for 2-3 years and then jump to PE” isn’t as prevalent here.
Part of that is just a cultural difference in Europe and the Middle East, but part of it is also because pay at sovereign wealth funds and private equity firms here isn’t significantly higher than what you would earn in investment banking – so many people don’t see the point in leaving.
If you do want to move elsewhere, the 2 main options are sovereign wealth funds (SWF) and private equity firms – both local funds based here and then international ones like Carlyle and KKR.
One appealing aspect of SWF is that you get a high salary with great hours – one of my friends leaves at 6 PM every day and makes banking/PE pay.
I’m not sure what I’ll do, but one perk in my program is that I can choose to move to another region after 2 years, so that’s an option as well.
How You Can Work in Dubai
Q: Working at a sovereign wealth fund in Dubai is starting to sound good to me. What advice do you have for anyone looking to work there?
A: If you’re already in banking, the path of least resistance is to ask for a 1-year rotation to Dubai.
I’ve had friends who have done exactly this – they did internships in the US or Europe, got return offers, and then asked about switching to Dubai instead.
It’s tough to come here directly if you haven’t done an internship or you’re straight out of school – I would not recommend just showing up here and saying, “Hi, I want to work here, who will hire me?”
Q: So you wouldn’t recommend just applying directly to Dubai via online applications, for example?
A: You can do that, but the process is less standardized than it is in Europe. It varies by bank and in some cases you can just apply directly online via the London career website – but overall it’s more haphazard than Europe.
Q: Right. But let’s say you don’t know anyone in the region and you’re not in the position to apply for internships or full-time jobs directly – what do you do?
A: Headhunters are probably your best bet if you really don’t know anyone and have no strong connections to the region.
Just get a list of headhunters in the Middle East and start sending out your resume and contacting them – that’s not the ideal way to break in, but outside of networking and the formal application process it’s all you can do.
Q: What about the language requirements? Do you need to know Arabic, or is it just a plus?
A: It’s not necessary – plenty of people on our team come from the US or Europe, so they don’t know Arabic at all.
However, it is perceived as a plus and if the bank is down to 2 candidates with similar credentials, the one who knows Arabic is more likely to get the offer.
At the Analyst level there are more Arabic speakers, because sometimes we have to translate documents.
Occasionally firms will also create specific positions where the language is required – for example, KKR in Dubai was looking for Arabic speakers awhile back.
Q: Awesome. Thanks for your time – I learned a lot!
A: No problem.
Coming Up Next: Even more countries, groups, and stories. We’ll also take a look at another “hot” Middle Eastern country that has been off most peoples’ radar and compare and contrast it to Dubai.
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