The 3 PE Hiring Trends You Need to Know Now

Do you fit private equity’s dream profile?

The market for private equity investment professionals is red hot.

“Demand for investment professionals has taken off like a hockey stick in the past 18 months to two years,” says Jonathan Goldstein, a partner at executive search firm Heidrick & Struggles, who heads the business’ private equity practice in the Americas. “The need is extraordinary.”

Yet the robust market doesn’t apply to everyone, with demand concentrated in a few key areas:  senior-level managers, midlevel staffers with advanced skills, and minority candidates.

Senior-level hiring is driven by fundraising trends. Not only do firms continue to raise larger investment vehicles, but that has been coupled with spinouts raising first-time funds.

Once you get below the partner or managing director level, the best candidates demonstrate skills that used to only be required of their superiors, particularly the ability to consistently source and close deals, Goldstein says.

Another trend that has gained significant steam is the push to diversity firm management and investment teams.

“I have received more requests in the last 12 months to help increase diversity than I have received at any time during the previous 16 years,” Goldstein says.

Goldstein cites two reasons for the increased focus on diversity. Management teams recognize that a team of varied backgrounds, experiences, and perspectives helps to both source and execute deals. Another is that limited partners are exerting increasing pressure on general partners to diversify. After all, institutional capital often comes from a diverse pool of employees and, as investors, they would like the team putting their capital to work to reflect their interests.

Goldstein says that, for their part, candidates are increasingly focused on upward mobility. As the industry matures and, in some cases, firms struggle, the path to advancement is less clear. Couple that with the desire of most firms to have new hires, particularly at the senior level, stay on for a full, 10-year fund cycle, successfully finding the “right” fit takes on even greater importance.