Global firms are beefing up their Australian debt restructuring teams as recruitment heats up.

While local commercial banks still dominate restructuring recruitment, foreign i-banks are building their teams and should have “real numbers” in 12 to 18 months, says Toby Aikins, a consultant at Jon Michel Executive Search.

Goldman Sachs announced plans last month to set up a restructuring group in Sydney, while Morgan Stanley has hired Ben Babcock from Merrill Lynch to head a new restructuring advisory group. Lehman Brothers has also launched an Australian advisory business, featuring a combined financing ability.

Fuelled by the credit crunch, demand for debt restructuring professionals at domestic and foreign banks has shot up, says Chris Campbell, head of corporate reorganisation at Deloitte.

Campbell tells us: “After 15 years of economic growth there’s a shortage of people with restructuring skills. Training in the banks has been focused on products and sales, rather than on the finer points of credit documentation. But now more banks are training their juniors about debt and insolvency issues.”

Mandates for restructuring professionals have doubled in the past year, says Aikins. “It’s a real growth area and is shaking the stigma it once had when it was a ‘knee-capping’, tough environment to work in. Now it’s a complex area, requiring specialist skills.”

Campbell says restructuring specialists who have transactional experience are most sought after. Aikins adds that demand is strongest at associate director level, “especially for those with relationship skills who work closely with clients to successfully restructure debt, rather than those who just collect debt from already insolvent companies”.

Aikins says generating “a culture of awareness” about restructuring issues is a key reason for bringing specialists on board. “It’s not unusual for a senior new recruit to spend their first six months helping and educating relationship managers to spot the early signs of potential debt trouble in their corporate clients.”

The ideal background for breaking into restructuring is an accountancy or economics qualification as well as existing business relationships, adds Aikins.