Apr 25 2012
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Hiring Trends in the PE industry
With the current political and economic crisis in the Middle East region, Private Equity industry is experiencing a rapid transition, and the coming few years are likely to be critical for the industry. While the overall context is challenging, there are significant opportunities for private equity professionals and PE firms with the appropriate experience and a strong track record to smoothly sail through this crunch period. The manner of current strategic positioning for the eventual market improvement will also define the likely success stories and failures in the Private Equity industry in the medium term, states a recent research of CTPartners Executive Search Inc. (AMEX: CTP), a leading performance-driven executive search firm serving clients across the globe.
The impact of the turbulent macro-economic environment on Private Equity is well chronicled - a poor fundraising climate, a limited pipeline of deal opportunities, wide gaps in pricing, a lack of exit options, refinancing difficulties and poor market environments for many portfolio companies have impacted origination, portfolio management and exits. The consequence of these factors is a mixed picture for Private Equity hiring trends. The number of new funds continues to decline and investor's reticence on re-ups continues to encourage a contraction in the industry. Post the crisis in 2007/2008, there was still significant hiring activity amongst many Private Equity players. According to a latest CTPartners report on the hiring trends in the PE industry, the following year saw a significant increase in Operating Partner hires, and 2010 saw more execution level hiring at Associate and Senior Associate level reflecting a pick-up in deal flow. Hiring in 2011, however, was uneven and institutionally specific. Firms that are prepared to invest in talent, despite the paucity of deals in the short term, may ultimately see perseverance rewarded.
Redundancies in private equity
Areas which will see growth on the portfolio side
"The appetite for riskier, lateral hires is far more muted, with the hiring focus clearly geared towards the "safer bets," of those with direct, related experience who can slot into the seat and seek to make a difference relatively quickly. This, of course, places a premium on the core talent pool of operational executives who have prior experience of working with private equity firms in each subsector. For those portfolio companies with deep restructuring requirements, demonstrable executive experience in dealing with debt negotiations and excellent financial technical competence is also an obvious absolute" said the latest CTPartners report on hiring trends in the PE industry.
Skills and experiences which are going to be most in demand
The investment professionals most in demand will be those with a strong, demonstrable track record of returns obviously, but also those less geared to financial engineering, and more those experienced in real input from the operational perspective: Working with the management team, able to work through choppy market conditions. They will be experienced in ongoing management assessment and motivation, and be able to work closely on operational issues, when they have clear input to provide. Portfolio other investors on an interim basis that can lead to securing a longer term position
The outlook for Private Equity hiring on the portfolio side remains robust at the leadership level, particularly in key sectors, but remains mixed and largely reactive on the investment side with some notable exceptions, says the CTPartners report. A lack of deal flow, and depressed carried interest valuations, has led to a less entrenched talent pool at the Partner and Principal level who are often now more open-minded to exploring other platforms. For the players with the capital and capability to think longer term on building their business and acquiring talent, there may not be a better time to hire.
CTPartners is a leading performance-driven executive search firm serving clients across the globe. Committed to a philosophy of partnering with its clients, CTPartners offers a proven record in C-Suite, senior executive, and board searches, as well as expertise serving private equity and venture capital firms.
With origins dating back to 1980, CTPartners serves clients with a global organization of more than 400 professionals and employees, offering expertise in board advisory services and executive recruiting services in the financial services, life sciences, industrial, professional services, retail and consumer, and technology, media and telecom industries. Headquartered in New York, CTPartners has 23 offices in 15 countries.
Issued by Borouj Consulting on behalf of CTPartners. For more information, please contact: Randa Mazzawi or Zeeshan Masud at Tel: +9714 3403005, e-mail: firstname.lastname@example.org, Zeeshan@boroujconsulting.com
© Press Release 2012
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