How is business? It seems to be a tough market?

There is a lot of movement in the job market out there. I look at FinanceAsia.com everyday and see two or three people changing jobs. Average that out over six months and there are 200-250 moves already this year. Clearly there is a vibrant job market out there. But a lot of that headhunting is being done by word of mouth and might not necessarily involve a headhunting firm. At the beginning of the year there were lots of PRC coverage moves. And a lot of banks have been very aggressive in hiring this year – Deutsche and HSBC for instance. So it is a very fluid market.

Are you surprised that investment banks have not been cutting more jobs given that their revenues must be way down on last year?

Bear in mind that last year was a fantastic year. And it would be difficult to better it. However, I do think a lot of banks have been laying people off but not in the way they might have done two or three years ago. Then, in 1997-1998, they tended to do it all in one fell swoop. Now, that is not the way to do it. You will now see banks laying off five people here and then four people there. They are staggering it out so the impact will not be so great. It's a PR thing as much as anything. They are trying to avoid the negative publicity as well as being more humane about it. It is all part of being better employers.

Do you think that head offices of investment banks in the US or Europe are more attuned to the cyclicality of Asian markets and therefore are more willing to keep headcount high during the tough times so they are ready for when the good times come back?

I think there is a realization that the Asian markets are still developing. It is also clear that within the region the different countries have developed at different paces. Some southeast Asian countries are really lagging behind. But Korea, the PRC and Hong Kong are still going forward. The market variations are greater than they were before. Banks are becoming more aware that within Asia there are some big money-spinning deals although the region as a whole is not as busy as it was before the crisis. But also the potential of Asia is still there. The untapped potential of places such as China, Korea and Taiwan is huge - there are still a significant number of deals waiting to come to market in these countries.

So what are your clients looking for in terms of personnel – M&A specialists, equity specialists, fixed income gurus?

I think country coverage is coming back big this year. Last year it was very much sector focus. Banks wanted people with sector experience. Now people are scrabbling for the deals. And generally the deals do tend to come from the coverage bankers.

So relationships are still important for the bankers?

In a down market, relationships are really important. In a bull market, relationships do not matter as much – the deals just have to be done. In a down market, clients really appreciate their bankers sticking close to them even if they are not doing a deal for them. The whole point of developing these relationships is that you do not just do the next deal for the client but you do all their deals for the next three years so it is worth the expense of hiring a good relationship banker.

Which banks do you think have the best relationships?

Goldman Sachs, Morgan Stanley and Merrill Lynch are still the best, principally because they have all the relationships in China. The bulge bracket firms, in some ways have almost surpassed the need for relationships because their track record and brand is so strong. If you are the PRC government and you want to do a deal, you need a very good reason not to go to one of those banks. I think UBS Warburg has also created a phenomenal franchise out here in the past 12 months.

How is the downturn affecting your industry, the executive search business?

Our revenues this year are broadly in line with last year's revenues, which in turn was the best year we had ever had. But it has been harder to predict the revenues this year. We have closed a number of large assignments, which have contributed significantly to our bottom line. If you look at the sector as a whole, there have been some very high profile appointments, which we know have involved headhunters. But otherwise there has been a bit of consolidation in the headhunting market.

Our clients are asking us all to be a bit more opportunistic and a bit more flexible on fees. We have no problem with that. In my view, in a down market, search firms should always do well because the emphasis on making quality hires is multiplied. When headcounts are tight our clients really want to find that extra value in a person to help justify the hire, which is what our research and our skills are geared to. So I think a good search firm will do just as well in a bad market as in a good market.