"I lost my job in private equity. I'm wary about the next fund I join"
It's been nearly six months. Earlier this year, I lost my job at the private equity fund I'd worked for in New York for the past eight years. I've been looking for a new job. I can't find one.
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The private equity industry is not in a good shape. The fund I worked for is going through a tough time. It's struggling to raise money for a new fund, and I'm not the only one who was let go. People I know who are still there are worried and can see the way that things are going. A lot are tied in by carried interest on the past funds and can't leave.
In a way, I don't mind being out of the market. I've been working hard for years and am glad of the rest, but I do need to work again! Instead of applying for jobs, I'm trying to network my way into one.
I've got a list of private equity funds I'd like to work for, plus a list of around 50 recruiters in the space. I'm being incredibly selective about the funds I talk to - I don't want to join another fund that's struggling with fund-raising and to find myself in the same position in a few years' time.
I take a fairly simplistic view of private equity. At the end of the day, the job is to multiply money for clients and investors, who are primarily interested in returns. If a fund has not delivered strong returns, it will struggle to raise a new fund. When I'm looking at the funds I want to join, I therefore look at returns first. I also look at whether new funds that have been raised are bigger than previous funds and what the re-up rate is for new funds (the extent to which past investors are investing in the new fund). If these measures are low, I steer clear.
The problem with private equity is that this information is often not publicly available. To get it, you ideally need to have a friend in investor relations who can pass it to you. Even then, the figures may not be comparable from fund to fund, so it can be difficult to understand what's really going on. In some cases, though, the re-up rate is mentioned in press releases about new fund launches.
What if I can't get a new job in private equity? I'm hopeful that I will be able to, but if I can't, I could probably go back into consulting. I think there's still a lot of talent to shake out of private equity globally after the industry over-hired in 2021 and 2022. A lot of the people hired then were low caliber and are now flooding the market. Once they disappear, competition for roles will abate; at least I hope so.
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