Financial institutions in Australia are beefing up their debt restructuring advisory capabilities, but headcount in this sector is still small and firms prefer to redeploy internally if possible.

A variety of different organisations are expanding. Rothchild is a strong player, as are foreign i-banks like UBS and Goldman Sachs. Other firms active in Australia include boutique advisor Grant Samuels and global giants KPMG and Ernst & Young.

The need for debt restructuring advisory has obviously increased because of the global downturn, but it is still considered a niche profession, with most firms only employing a handful of people. A relationship manager, executor and analyst make up the standard threesome, while larger firms employ up to eight in their teams.

Initially most companies look to redeploy internally – saving recruitment costs and jobs – from other areas, such as leveraged finance or debt capital markets, says Oliver Darkes, principal consultant, Carmichael Fisher. “Generally these individuals have a good understanding of how to offer a solution to corporate restructuring requirements,” he adds.

Patrick Everest, a partner at Jon Michel Executive Search, comments: “Quite often they come with the ideal product knowledge, technical skills and familiarity with internal processes, making them strong candidates.”

Small-scale external recruitment is also taking place, with employers poaching from related job functions due to a shortage of debt-advisory specialists caused by a lack of corporate restructuring in recent years.

The domestic banks are a good source of junior candidates with credit and credit-approval knowledge, says Darkes. “At the more senior end, potential candidates have moved from origination roles across leveraged finance, DCM, syndications and the broader debt markets.”

Most debt restructuring advisory teams need a hybrid of skill sets, says Everest. Practitioners from the larger insolvency firms are especially in demand.

“Traditionally in banks, restructuring candidates have moved from credit risk, but that has changed and we now see people moving from product origination, risk, external insolvency and the buy side,” explains Everest.

Darkes reckons professional services firms have attracted candidates from both local and foreign banks. Everest adds: “The Big Four accounting firms have always had this function of sorts, as part of their corporate finance teams, but there has been less of a market in previous years. This is now starting to change.”