Private equity and venture capital firms appear to be hiring. In March 2012, the number of private equity/venture capital jobs advertised on eFinancialCareers was up 36%. In April, it was up 77%. This is a trend.
What's going on? As we suggested previously, it's partly deceptive: more private equity/venture capital job advertisements are down to more private equity professionals leaving. People who would once have stayed with the same fund for decades are getting out because that fund is below its high water mark and they won't receive the carried interest which is the main reason for working in private equity. With experienced staff leaving, funds are hiring in juniors.
At the same time, there are redundancies: 3i is letting go of up to 40% of the staff in its London head office and closing part of its overseas network.
However, recruiters say there's also some organic hiring happening in private equity.
"We seem to have turned a corner," says David Howell, managing director at recruitment firm the EM Group, "We're beginning to see a genuine increase in long term hiring in sectors like renewable energy, infrastructure, healthcare services (care homes) or BRIC investing."
A quick test of your suitability for a private equity career
If you'd like to get out of an investment banking and into private equity, recruitment firm PER has come up with a helpful online tool to test your appropriateness.
PER says your CV will be dinged for a private equity job if:
1. You have not previously worked for either: a bank, a professional services firm, a strategy consultancy, or in an operational role in a tech business.
2. You have worked for a bank, but haven't worked in either M&A or leveraged finance
3. You have worked for a bank in M&A or leveraged finance, but are more senior than an analyst or associate
4. You have worked for a professional services firm, but not in a lead advisory, transaction services, or valuation group and not as an executive or manager or equivalent.
5. You have worked for a strategy consulting firm but not in a private equity due diligence or operational improvement role and not as an analyst, associate, or junior engagement manager.
Above all, Howell says there are two things private equity funds look for on a CV: strong financial modelling and valuations experience and a capacity for hard work. Beyond that, he says it can be hard to distinguish who really has the right skills: "The qualities necessary to succeed in private equity are often intangible. Clearly you need to be very bright, but you also need the ability to think like a principal investor, which is very difficult to test for."
KKR has attempted to redefine its ideal employee. "We are hard working, thoughtful people," Dominic Murphy, head of KKR's European healthcare team told the Telegraph. To succeed in private equity, Murphy said it's necessary to have: "An uncommon amount of common sense".