The last peak in recruitment came, predictably enough, during the heady bubble days and, just as fund raising and investment has fallen off from those levels, it would have been rational to assume that recruitment had too. “Let’s not get carried away,” cautions Guy Townsend at Walker Hamill. “I don’t think there is any sudden boom. From late 2001 this has been one of the few financial sectors that didn’t go dead.”
While Townsend does admit that following the dot-bomb the recruitment rates dropped off to a plateau, he says they were at a reasonable level. “It was quite a static market for principals and partners. In tough times these positions disappeared because no one was leaving.”
Now that the industry has picked itself up, the plateau has turned upwards. “The last 12 months have been different,” says Townsend. “There have been a number of new funds emerge, spin-offs, and what this means is that people have left established names, others move up to replace them and then others are hired at the bottom.”
The Almeida Capital website AltAssets set up a job section in June in response to user demand. Stephen Hunt, associate director and head of online and technical services at Almeida says: “It was the number one request we had, both from those in the private equity industry looking for jobs and recruitment agencies. Since the section went live we have had an extremely healthy response.”
Hunt attributes the popularity of the new service to the impending bout of fund raising, with the bulk of the firms advertising being mid-market size funds. In terms of sector, most of the jobs come from the generalist funds, with a slight slant towards venture, especially in the biotech arena, and mezzanine. Approximately half of those on the site are agencies and the others are from firms themselves, with a reasonable geographic spread including Asian and US funds.
Townsend sees five catalysts to recruitment in the private equity
industry. The first, and most obvious, is fund raising. The second is senior resignations, either to retire or to join another company. Third is strategic initiatives, which means a firm deciding to focus on a particular sector or region and so hiring those people with the appropriate experience. Fourth is the desire by firms to improve their operational experience, which means there is a need for consultants or operational management from industry. And lastly, and perhaps most interestingly, is the growing number of people being appointed to investor relations positions. A lot of lip service has been give to investor relations in the private equity world, with some debate as to what is actually being done. This is surely a sign that the talk is being turned into action. Sustainable It is not just private equity firms that are interested in private equity fund managers. “An interesting point about our job section,” says Hunt, “is that we’ve had about 20% of our positions posted by organisations which aren’t classic private equity firms, by which I mean either funds or institutional investors, but instead those such as hedge funds, property alternatives or more general investment banking.”
“When I have pointed out that AltAssets’ 18,000 subscribers are almost entirely private equity executives, they have uniformly replied that it is actually CVs from private equity staff they want to attract. They regard people with training from the sector as very professional and highly attractive to other alternatives.”
This adds a new dimension on the perceived rise in firms looking for new appointees: it isn’t just the private equity sector that is hiring, it’s the whole alternative asset class. In fact it seems to be doing so across the entire financial services board. The recruitment consultancy Michael Page International confirmed as much, in its first-half profits report, recording a 66% jump in first-half profits.
Private equity in Europe has come a long way since the 1980s and is now able to attract far more recruits than it was even five years ago. Given its apparent imperviousness to economic conditions, recruiting more analysts, fund
managers and partners into the private equity business looks set to continue.
“I see no reason for this to tail off. It is a reasonable level and a sustainable one,” says Townsend.