How to Get a Job in Private Equity Now

6 March 2013

4 minute read

Employees at private equity firms are likelier happier than you. They make more money, their hours aren’t as grueling and their work is more stimulating. The good news is that they are also hiring.

Jesse Marrus, founder of Wall Street career search firm StreetID, has seen a definitive uptick in private equity hiring in recent months. Adam Zoia, CEO of Globcap, a New York-based executive search firm, has also seen a surge in PE hiring, born from pent up demand for M&A deals that have piled up early in 2013.

Carlyle, the granddaddy of private equity firms, has added 200 staffers over the past 12 months. At the start of 2012, the firm said it employed more than 1,200 people. A recent press release said it now employs around 1,400. A spokesperson for Carlyle declined to disclose the firm’s current hiring plans.

KKR also seems to be adding headcount. The firm doesn’t break out how many people it employs but expenses and benefits rose 47% in 2012 “in connection with increased headcount,” according to its full-year results. The firm didn’t respond to requests for specifics on hiring.

Across the pond, where M&A activity isn’t near as robust, hiring appears more tepid. Gail McManus, managing director at London-based Private Equity Recruitment, has seen a bump in infrastructure, credit and principal investment hiring in Europe in recent months, along with a steady demand for those working in investor relations and client services. Annual associate hiring is “ticking along,” she said, but the volume hasn’t changed much from last year.

Several European firms booked double digit growth, led by Permira and Terra Firma, which each saw their portfolios of investments rise by 19% in 2012, according to Financial News. U.K.-based Cinven had an even better year, with its most recent fund rising 27%.

A source who asked to remain nameless said that London-based Better Capital is adding to its PE team. The firm didn’t immediately respond to requests for comment.

Private Equity’s Perennial Attractiveness

There are plenty of reasons to work in private equity, the main one being pay. Average compensation per employee at Carlyle, based on an estimated 1,400 person staff, was $816,000, up from $398,000 in 2011 based on an estimated 1,200 person staff. However, equity allocated to partners was included in 2012 totals – and not in 2011 – as the firm didn’t go public until last spring. Three Carlyle partners earned $137.825 million each for 2011. Their comp numbers for 2012 weren’t made available.

The two heads at KKR each earned more than $135 million last year.

A recent survey by bank Investec Fund Finance found that 92% of people working in the U.K. private equity industry are satisfied with their careers, a record for the survey and a massive number for the industry. Nearly 40% of the 117 respondents were more satisfied than they were a year ago.

The reason, according to Financial News, is the rise in deal opportunities and a recent rash of senior-level departures, giving opportunities for younger staffers to rise up.

“PE firms are more attractive places to work,” said Marrus. The work is more stimulating, particularly at cash rich firms that can take advantage of distressed companies that can be brought back to life.

The Elite of the Elite

The bad news is that private equity jobs are as difficult to come by as they ever were. Rarely advertised, they need to be sniffed out by the very best junior financial services professionals.

LinkedIn profiles of recent hires at Carlyle and KKR bring a clear fact to light. If you want to work in private equity, you’ll likely need a post-graduate degree from a blue chip university. The most common names include Stanford, Harvard, Wharton, Columbia and Oxford. Carlyle employs a host of people with degrees from Georgetown.

Most people start their career in private equity after a stint with a large bank. Banks get kids out of the Whartons and Princetons, burn and churn through them, and then the best move on to private equity firms, said Marrus. If you don’t have this background, count yourself out now.

AUTHORBeecher Tuttle

US Editor

3 comments

re
refj
9 March 2013
Perhaps it is envy or perhaps it is a subtle respect for those who earned a B-School diploma. I worked hard to get the opportunity and when it was available a life issue required me to chose a different path. While I believe every company is entitled to select and choose the talent it wishes, simply checking the box with those learned individuals does not necessarily improve bench strength. I have negotiated for and against some of the B-School talent and won more than I lost. Perhaps it was due to the fact a loss from non-pedigree staff was not as readily accepted, and thus I had to work harder. Or perhaps B-School qualification does not measure passion. If the world does indeed need ditch diggers then there is nothing wrong with trying to be one of the best.
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as
asdf
7 March 2013
As a graduate of one of those B-schools, I doubt the leftist slant pervades the business schools at most institutions. It can come through from time to time, but my program spent more time focusing on using business fundamentals, decision making, etc. I have yet to see a case study with a strong leftist message.
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RH
RHD
6 March 2013
"... recent hires at Carlyle and KKR bring a clear fact to light. If you want to work in private equity, you'll likely need a post-graduate degree from a blue chip university. The most common names include Stanford, Harvard, Wharton, Columbia and Oxford."
This is interesting. Today, these schools have a definite leftist slant, if not outright communist, in their philosophy. If I am right, then I wonder how an education here can develop the strong capitalist outlook necessary for profitable investing. Of course, the late Mr. Chavez (I do not know if he is an alum of these schools) has shown that M&A could be as simple as just taking the target company.
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