Hong Kong investment bankers have lots of free time and anxiety as deals slump, lay-offs intensify
- The value of mergers and acquisitions in mainland China and Hong Kong has fallen 6 per cent to about US$185 billion, set for the worst year since 2013
- ‘The golden era of high-flying investment bankers and advisers is pretty much gone,’ finance professor Veronique Lafon-Vinais says
Eighty-hour weeks. Multibillion-dollar deals. Huge bonuses. Until recently, life as an investment banker in Hong Kong was both intense and lucrative.
These days, it’s anything but. The big China deals that lined rainmakers’ pockets for decades have evaporated. Banks and law firms alike are cutting jobs. Those advisers that remain are chasing smaller deals and taking extended vacations.
In a bad year for deals globally, the value of mergers and acquisitions (M&A) in mainland China and Hong Kong has fallen 6 per cent to about US$185 billion Bloomberg-compiled data show. That is on course to be the lowest total for any year since 2013 and little more than half the annual average since then.
The decline in initial public offerings (IPOs) is more extreme. This year is poised to be the worst for Hong Kong debuts since 2001, just after the dotcom bubble burst, with US$4.6 billion of IPOs. That is a fraction of the US$52 billion raised three years ago, and 85 per cent below the past 10-year average of US$31 billion.
“The golden era of high-flying investment bankers and advisers is pretty much gone,” said Veronique Lafon-Vinais, an investment banker for more than two decades who now teaches finance at Hong Kong University of Science and Technology’s Business School.
Interviews with more than a dozen advisers show the environment is expected to remain challenging next year, with some saying activity is unlikely to pick up until at least 2025. The advisers asked not to be named due to the sensitivity of the information.
