Private equity recruitment is creeping up, but threats remain

Job prospects for private equity professionals in the Middle East are mixed – on the one hand more international players and larger regional firms are (selectively) hiring again and, on the other, redundancies are likely as smaller firms struggle to exit investments.

Carlyle Group's elevation of Can Deldag and Firas Nadir as co-heads of its MENA arm is viewed as signal that it sees the Gulf as a key region, while recruiters in the region have highlighted that larger regional private equity firms are considering building their teams again.

"Private equity firms are looking to hire people to focus on the MENA region, but increasingly we're seeing roles with a global focus, particularly targeting distressed assets in Europe," says Nicole Beer, senior business manager focusing on private equity and investment banking at Hays UAE.

The result is that many firms are targeting Western experience for their globally-focused teams, suggests Beer. They could face difficulty – a lack of a firm carried interest structure within Gulf firms has traditionally deterred senior private equity professionals from Europe and the US, says Oliver Gilks, Middle East consultant at Private Equity Recruitment.

"This is slowly changing, however," he says. "And the fallout in the European private equity market has created some liquidity in the job market."

It would be misleading, however, to suggest that the job market is overly active. Some smaller firms, which rode on the wave of the boom years of 2005-2008, are now struggling to sell these assets and raise new funds, suggests Dow Jones. A shake-out could be coming.

"There will be fewer active regional fund managers in the region, with a number of others in wind-down mode operating with a significantly reduced staff," said Nick Tomlinson, partner at law firm Gibson, Dunn & Crutcher in Dubai.

One example of this is Abu Dhabi-based The National Investor, which last week announced that it was cutting headcount by 50%.

Aside from the opportunities in the larger private equity firms, any professionals in the receiving end of redundancy announcements could look to either large family offices or sovereign wealth funds, which are increasingly looking to structure their own deals rather than buy into private equity funds, says Bill Allum, managing director at headhunters Execuzen. Or, perhaps surprisingly, you could look to the wealth management sector.

"Wealth management firms have the relationships with ultra-high-net-worth individuals in family offices or SWFs, but they want to bring in investment bankers and private equity professionals with the technical capabilities to ensure they can be involved in any of their deals," he says.

Last week, Merrill Lynch Wealth Management revealed that it had hired Shaba Hadipour, who had previously worked for Barclays Wealth in its Strategic Solutions Group, offering private investment banking advice to clients. Barclays Wealth also announced Miray Katerji as managing director of this division in October last year. She had previously worked at HSBC Global Banking and Markets.

There's also another reason for hoping that private equity in the region rebounds - it could provide much needed work for M&A bankers. Reuters suggests that M&A is the preferred exit route for private equity investments in the Gulf, so any activity in this area would be welcomed, considering the ongoing slump in M&A activity.