Allure of working in private equity has dimmed considerably

It's a nasty new world for everyone, not least for the wunderkinds who left investment banking for private equity funds.

Candover illustrates what can go wrong. The British private equity house is crumbling and considering a split in advance of sale. 10 of its 43 investment professionals have already been let go according to Financial News, including managing director Charlie Green, and The Times say there are plans to chop another 20.

In further illustration of the travails of the sector, the avuncular Guy Hands is stepping down as Terra Firma chief exec, allegedly to spend more time managing the business and less time on admin.

Despite all this, private equity recruiters say there's still hiring going on in niches. Those niches include energy funds (eg. Eland Private Equity's new fund, Man Group's new environmental funds) and funds looking to penetrate the financial services space (eg. Blackstone Group).

Candidates are, however, being a lot more circumspect about where they'll work. "Everyone was interested in private equity last year," says Abid Hussein, head of EM Financial Services. "This year people have a lot more reservations. A lot are putting decisions on hold for two to three months to see how the industry shapes up."

James Heath, at recruitment firm Greenwich Partners, says private equity professionals are taking pay cuts to move into solid houses: "I've seen people who were on basic salaries in the mid-60s take basics in the mid- 50s just to move to better firms."