With recruitment of juniors at banks and buy-side firm at record highs this year, all talent is at a premium, but headhunters on both sides of the Atlantic say talent that ticks diversity boxes is at even more of a premium than most.
"There's huge demand for women on the buy-side," says Anthony Keizner, partner at Odyssey Search Partners in New York. "And even more than women, there's big demand for those of a racial diversity background. Investors are happy with private equity returns, but they want funds to make improvements to their diversity and inclusion statistics."
Keizner says Odyssey's own research suggests that no more than 10-15% of investment professionals in private equity are female. A study last year by Preqin found that globally the proportion of women working in the alternative assets industry was 19.7%, up from 18.8% in 2017. As Marcos Rodriguez, Chairman and CEO of New York City-based Palladium Equity Partners, told us last month, this is a problem: “When you have people from the same backgrounds, with the same points of view, looking at the same data you can get groupthink. It’s a recipe for bad decisions.”
The push to hire diverse talent into U.S. private equity funds is also in evidence in Europe. One German private equity headhunter said funds are increasingly saying they only want him to provide female candidates and are willing to lower the bar for female hires. "I've had three companies telling me that if they hire male candidates they will only accept applications from the bulge bracket, but women can apply even if they're from a midcap firm or boutique," he said.
As funds focus on diversifying their ranks, pay for hard to find hires is increasing. In the U.S.,Keizner said PE funds have responded to increased compensation at investment banks by hiking their offers. "In order to attract an analyst from an investment bank, it used to be the case that buy-side firms offering $180k were seen to be providing a good premium. Now the most common buy-side offer is $200k, at least."
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