Too many private equity professionals, not enough jobs
The Gulf's "golden age" of private equity could be over before it has really begun. Some firms have made redundancies, and those that are hiring are faced with rich pickings of top talent.
Investcorp, the Bahrain-based alternative investment and private equity firm, cut staff compensation costs by nearly 50% for the second half of 2008 - from $75.4m in 2007 to $37.8m last year. In December it made 20% of its staff redundant.
Various GCC sovereign wealth funds have also trimming their investment teams in recent months.
A recent survey of Middle East private equity executives by Deloitte found that 80% of them expect lower returns in 2009, and nearly three quarters anticipate decreased deal activity.
Karim El Solh, CEO of Gulf Capital told Emirates Business 24-7 that he expects some GCC private equity firms to fail this year: "There are simply too many players in the sector. There is a lot of cash chasing few opportunities, so there will be a shaking up of a sector and not all firms will survive."
This scenario is a marked contrast to this time last year, when a talent shortage was threatening to stump the growth of the industry in the region.
Nick Careless, managing director of headhunters AP Executive, confirms the recent redundancies have given employers an embarrassment of riches to choose from.
"There are so many high quality candidates, that firms' expectations have gone through the roof," he says. "One client recruiting for a senior private equity professional wanted someone with five languages, a degree from a top five business school, a network of government contacts, business experience in the Middle East and a minimum of five years' experience at top private equity firm."
Still, the important thing to remember is that some firms are still recruiting, says Bill Allum, managing director of executive search firm Napier Scott.
"It's not hugely active, but there are opportunities," he says. "Some private equity firms are up-skilling in sectors such as energy, infrastructure and emerging markets."
