When people ask me what the recruitment market is like for GP-led secondaries, I always give the same answer: too many firms chasing too few people. Sound familiar? It’s just like deal-doing – if you want to win the hire you need to think smart, act fast and be prepared to pay.
This is true at all levels. For senior staff, the relative recency of GP-led secondaries means there are only a few veteran dealmakers. Meanwhile, for juniors, secondaries is only one of the private equity strategies open to them.
Aggressive competition for talent comes from GPs, LPs and M&A itself. On top of this, recent banking pay hikes have created a challenging benchmark for private equity compensation, even if moving to the buy side is still a motivation. So, how are you going to be a winner in this war for talent?
Get your story straight
My strong advice is to get the story right. Why should they choose you? A standard role isn’t going to cut it with the best candidates. What else are you offering? For the juniors, it’s about career development, inclusive cultures, access to people at the top and deep involvement in deals.
“If there aren’t enough fish in the pond, you’ll have to fish in a different pond”
For experienced investors, the story is around the opportunity to build teams, to open up markets, to influence strategy and show that you can build the opportunity around them. If you want a star, you have to attract them, invest in them and show them they will have a voice that is heard.
For recruiting at all levels, craft a compelling story and tell it all the way through the recruitment process.
You are going to be fishing in a vanishingly small pond. Recent hires made by TPG, Blackstone Strategic Partners and AlpInvest, for example, have all looked externally to find their next generation of GP-led secondaries stars.
Multi-asset managers have significant funds to deploy and therefore sizeable management fees, and so they have been able to entice talent with GP-style compensation packages. Think of it like the deal market: multiples have increased, and you have to pay to play.
If there aren’t enough fish in the pond, you’ll have to fish in a different pond. Which other parts of the market demonstrate the right skills, even if people don’t have like-for-like experience? Look in the GPs at the direct deal-doers. Focus on firms with glass ceilings to partnership, where succession plans aren’t clear and where corporate cultures are stifling potential.
To be successful at hiring in this market, you need to be creative in where you look, sell a compelling vision of the future, and pay market compensation today to ensure you have the person you need for tomorrow.
James Ellis is a lead consultant at recruitment firm PER.