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In the past, young bankers were so eager to work in private equity that they were sometimes forced to sit all-night interviews with major funds. Private equity hiring season is upon us, and big funds may see similar scenes again this year, while others struggle to get bankers to interviews during the day.
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“Candidates have suddenly become very picky,” says a senior private equity headhunter executive in London, who asked not to be named. “They know that the worst thing to do right now is a fund that can’t raise money, so they’re looking very closely at whether the fund has been successful in raising money in the past year.”
The warning echoes predictions by Christian Sinding, CEO of Swiss-based private capital firm Partners Group, that the number of private equity firms, currently 11,000, will decline to just 100 over the next 10 years. It is what I received. The industry is maturing, Sinding said. Consolidation will happen. In particular, there will be some people who disappear along the way.
Candidate wariness could come as a shock to funds that have become accustomed to opening their doors and finding a steady stream of enthusiastic candidates. “Before, we would advertise jobs and people would just apply,” says the headhunter. “But smart bankers are only interested in where the money is raised, and they know exactly who isn’t.”
Funds like UK-based BC Partners missed their targets in 2021 and 2022, but regional funds are not the only ones feeling the strain. Carlyle has also been cutting costs, with executives leaving Cinven over the past year.
With smaller private equity funds bearing the brunt of candidate uncertainty, headhunters say it’s harder than ever to break into the big funds. “Nowadays, everyone is only interested in working for a global company,” says one person. “It has a crowding effect.”
Another headhunter, who also wished to remain anonymous, said this was a mistake. “If you’re early in your career, working for a smaller private equity fund can give you more exposure and exposure to deals and portfolio companies.”
But over time, he admitted that joining a small business with financing issues was a bad idea. In particular, promotions are limited because the partner company is unlikely to earn enough money to quit.
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