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5 hiring trends in private equity

 


Mergers & Acquisitions | August 12, 2019


The Mergers & Acquisitions article, "5 hiring trends in private equity," quoted Russell Reynolds Associates Consultant, Heather Hammond on emerging trends in the private equity space. The article is excerpted below.

The modern private equity industry, dating to the founding of KKR & Co. (NYSE: KKR) in 1976, has entered its fifth decade. Founder-cousins Henry Kravis and George Roberts have reached their mid-70s and have designated heirs apparent. Across the industry similar stories play out as baby-boomer founders who built firms into multi-billion-dollar fund managers begin handing the reins to a new generation. Signs of this handover abound. 

They include the sale of minority interests in firms to cash out founders; spin-outs of investment professionals who lose out in bruising power struggles; and an accelerating shift in emphasis from financial engineering to operational improvement as new leaders, less tethered to the world of investment banking, take charge. Below we examine five hiring trends in private equity that demonstrate how the industry’s maturation is playing out in the trenches:

1. Meeting demands for diversity

The race is on—if belatedly—to add women and minorities to private-equity payrolls. Senior dealmakers newly in charge at their firms want to right past imbalances. They want to appeal to investors who look with disdain at all-white, all-male investment teams. And many believe that in a field where relationships are all, and where business owners come in all genders and colors, diversification improves the odds of winning lucrative deals in a picked-over market.

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Heather Hammond, partner at executive recruitment shop Russell Reynolds Associates, said that in a majority of the searches she conducts for buyout shops these days “there’s definitely a discussion around trying to find and discover diverse talent.”

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3. Adding portfolio support

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According to Russell Reynolds’s Hammond, people joining portfolio support teams may have spent five to 10 years first working at a consulting firm or in operations at a company. Often they start at the VP or director level and have a path to partner. Hammond said her firm over just the last 18 months has worked on 20 to 30 assignments to find staff for portfolio support teams operating around the world.


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5 hiring trends in private equity