Captive funds recruiting

Having lost staff to external funds, recruiters say investment banks' captive private equity funds are hiring.

"A lot of funds have lost people and are rebuilding," says Ben Aymé, at search firm The Veni Group. "Potential conflicts of interest with investment banking and a hierarchical culture have encouraged people to leave and in the current environment there are plenty of opportunities elsewhere."

Merrill Lynch and Goldman Sachs are among those understood to be hiring staff for their private equity arms, while Credit Suisse is said to be moving staff internally.

In the short term at least Aymé says private equity professionals working at captive funds can end up better off than their colleagues elsewhere who have to wait several years until carried interest is paid out. "Captive funds usually have a cash compensation scheme at their foundation - they will often pay annual bonuses which can be in line with those in investment banking."

Lehman Brothers is in the process of raising a $2bn (1.1bn) private equity fund, The Telegraph reported at the weekend. It is not clear whether the bank is hiring as a result.