SipahimalaniÆs decision to move to the buy-side is in itself not unusual. In the past few months alone Goldman Sachs has lost Henry Chen to European private equity firm Permira and Harsha Raghavan to UK-headquartered private equity firm Candover. And those two are just the latest additions to a long line of bankers who have moved to a financial sponsor. Indeed, for many bankers, a move to a private equity firm at a certain stage of their career is a natural progression.
But traditionally bankers have not jumped ship in the fourth-quarter of the calendar year as bonuses are paid in the following quarter. Staying a few more weeks has generally meant receiving a hefty payout.
Morgan Stanley has had a reasonable year in Singapore, especially in M&A with a number of deals to its credit. Along with Credit Suisse, it advised Temasek on the sell-down of its stake first in Tuas Power, which closed in March, then in Senoko Power, which closed in September. The sale of the third Singapore generating company owned by Temasek, PowerSeraya, has kicked off this month.
Together with Goldman Sachs, Morgan Stanley also advised Temasek on its investment in Merrill Lynch earlier this year, although some sources comment that critical negotiations on that deal were done on a principal-to-principal basis due to sensitivity on the part of Merrill Lynch with respect to opening its books to competitors.
Indeed, Sipahimalani would have grown extremely familiar with the Temasek team this year as these mandates were executed.
But some bankers suggest it is unlikely that investment banks in the West, which have either been bailed out by the government using taxpayer money or quasi-nationalised, will be paying large bonuses this year. Even though bonuses are a reward for work done during the past year they also set the floor for the next year or for salary negotiations. And bankers' salaries have become a source of ongoing criticism since the financial meltdown, suggesting they could be more closely scrutinised by regulators in the future. In the UK, for example, as a condition of the bank bailout the government has insisted that senior directors get no cash bonuses this year, with future bonuses to be paid in the form of shares rather than cash to encourage management to take a long-term view and stay invested in the firm.
Others don't agree that bonus payouts will be affected, commenting that US investment banks are still likely to approve the payment of discretionary bonuses to retain people (and certainly are not bound by any regulations, currently at least, not to pay bonuses) and see Sipahimalani's move as a career shift and a move to a less volatile environment.
Sipahimalani has been with Morgan Stanley for the past 11 years. He joined in 1997 in Mumbai as an associate and moved to Hong Kong in 1999 as vice-president, focusing on mergers and acquisitions. He became co-head of M&A with Ed King in 2005 and moved to Singapore in 2007 to head Southeast Asia investment banking.
Before he joined Morgan Stanley, Sipahimalani worked with McKinsey. He began his career with Citi in India and worked with the US bank for five years after graduating with an MBA from the Indian Institute of Management in Ahmedabad in 1989.
Temasek confirmed the appointment. Morgan Stanley had no comment on SipahimalaniÆs departure.
¬ Haymarket Media Limited. All rights reserved.
