Hot Spots in Hiring in Private Equity

As we enter into one of the historically slowest months of the year for Private Equity hiring many community members keep asking us “What do we see as the future of Private Equity hiring?”  There are three areas we see as near future hot spots for hiring, and while some of these areas are already strong we believe they will continue to be strong for at least the next 12-18 months if not the next few years: Infrastructure, International, and Middle Market.
Almost every day we read about how the infrastructure not only here in the United States, but globally as well is in need of a major repair/overhaul.  While there is no exact figure for what the entire cost of these repairs will be many people feel it is number easily over a Trillion dollars U.S.  And since infrastructure is so important to a country’s potential for growth this is an investment area where many investors and professionals feel there are tremendous returns available for those individuals willing to invest in the area.  So far this investment category has been controlled by a few very large players, but what we are seeing at the present time is that many of these large players have new competition, not only from small underfunded start-up’s, but also by large well backed start-up’s looking to grab market share.  

These start-up’s include not only Private Equity Funds, but multi-billion dollar Hedge Funds, and Sovereign Wealth Funds which have decide to enter this investment space. At the present time knows of several firms hiring in this space for everything from Analyst to Managing Directors.  We do not foresee this hiring activity slowing down any time soon, and believe it will actually remain steady if not increase, contrary to some earlier prognosticators, even with the Olympics now upon us. When these firms hire they are typically looking for people with infrastructure experience, but since this universe is so small we are seeing that many firms are reaching out and now actively recruiting professionals with solid modeling backgrounds, especially for the more junior roles.  In many cases these Infrastructure groups are looking at individuals with experience in the other asset backed areas and fixed incomes as well.
The United States economy is becoming global, and as this globalization continues to occur we will continue to see U.S. based funds open offices in foreign countries across the globe.  Recently we have seen funds open offices not only in Dubai and Hong Kong (two major hot spots) but also in places such as Sao Paolo, Brazil and other BRIC countries.  And while these funds are primarily looking traditional Private Equity deals and not focusing purely on infrastructure roles, many funds are still participating in a few regional Infrastructure deals.

These new outposts offer certain professionals an excellent opportunity to work in very active offices, to see much more of the deal, and to be more responsible for certain aspects of the deal than they would in the firm’s large NYC office.  The negative is that these offices are not places where professionals can hide, and you had better be ready to work hard and have not only your work product, but also your overall effort be judged by a Senior Manager/Partner of the firm.  Typically these funds are looking for candidates with strong modeling skills, some language skills, and an in-depth specific industry experience, depending upon the country.  Furthermore, previous experience living abroad is a very strong asset to have on your resume, either in your professional career or during your schooling.
Finally, as we have written in the past, the Middle Market space has continued to show the greatest signs of hiring here in the United States.  Due to the present market conditions, especially credit/leverage issues, firms specializing in the Middle Markets space have continued to excel while the firms focused in the large cap space have come to a grinding halt.  We have even seen firms start new or second funds in this Middle Market space in the recent quarters.  

The Middle Market space as a whole has had a strong year, and those firm’s with strong reputations, solid networks, and a solid balance sheet/capital have found it a great year to complete deals and increase their portfolio holdings. Of course many of these deals have happened in the energy space, although with the price of oil presently heading in a downward direction we will need to keep an eye on how much longer the deals remain focused in energy.  This is not to state that deals in other areas have not occurred, but rather that energy has been one of the stronger sectors.  I recently spoke with the Managing Partner of one PE fund who was extremely excited about the year and the near term future for the Middle Market space, his only worry is that once the credit markets turn that some of the larger shops will enter into the Middle Market space; a plus for those looking for work, but a negative if you are the Managing Partners of a Private Equity fund specializing in the space when a new well funded competitor sits across from you at the bargaining table.
Historically, September and October are fairly good months for hiring in the Private Equity space and we shall see if that historical trend continues.  Within these specialties Infrastructure, International, and Middle Market; believes the positive hiring trends will continue. Furthermore, there is a possibility that the coming months will be even better since there is a growing pool of talent looking for new opportunities.  
© 2008 NyamiNyami Holdings, LLC