PE Tech Report


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War for talent pushes PE firms to remodel

In an effort to recruit and retain new talent, PE firms of all sizes have prioritised talent management above everything aside from asset growth.

• 31% of private equity firms confirmed they are either currently recruiting for data analytics, science and programming roles

• 60% of PE CFOs are struggling to recruit millennial and Gen Z employees, with 82% reporting issues with retention

• 43% of GPs are increasing the scrutiny of their private equity firms’ talent management programmes

In an effort to recruit and retain new talent, PE firms of all sizes have prioritised talent management above everything aside from asset growth.

The findings featured in Private Equity Wire’s latest Insight Report, The Great Reboot: Why private equity is finally turning to technology.

With private markets taking a hit after two years of record returns, PE firms may have to be less selective when it comes to hiring new talent and focus more on retention within their businesses instead.

After the industry has boomed over the past two years, larger firms have been developing into asset management firms which often require several new teams.

“There isn’t a single part of the alternatives industry that hasn’t had a good run, so everyone has been hiring. In the last 20 months, the market has been very buoyant,” says Charlie Hunt, director of UK at recruitment firm PER.

Just under a third of private equity firms are currently seeking data analytics, science and programming recruits, according to data from Private Equity Wire’s latest survey.

Tech talent in particular has become a priority, as the back-office finally gets recognition for its value from PE firms.

“Almost all PE firms are looking to operationalise and scale the technology and data they have to benefit investors. For the first time we’re seeing demand for chief data officers, data scientists and engineers so that firms can gain an edge,” says founder of DealCloud and president of Financial Services at Intapp, Ben Harrison.

The push for the best talent in the industry has prompted PE firms to remodel the traditional firm, as funds work to retain and attract talent.

Talent managers help firms to recruit and onboard staff at all levels, while also advising on a firm’s approach to culture, structure, training and employee benefits.

“PE firms are more focused on culture and employee experience than they have ever been. As well as offering perks and various incentives, they’re also looking to leverage technology to make employees’ jobs as efficient and smooth as possible,” notes Harrison.

The switch to a more tech-orientated business can also allow a firm to limit issues such as key-person risk higher up in the organisation, by drawing more value from data and analytics instead of a person’s network or knowledge.

As well as struggling to find the correct candidates, there is a general lack of candidates in the job market.

“There is currently a very candidate scarce market – that has been the biggest problem we have found. On top of this, funds haven’t lowered their expectations on the quality of talent and just aren’t willing to compromise on their requirements,” says Hunt.

As benchmark returns in private equity begin to slow down, private equity firms must adjust their expectations on talent and remodel accordingly.

“Everybody, particularly in the private market space, has money to deploy for hiring, but they’re a little too focused on finding the perfect candidate all the time. Right now, they need bodies on board to help manage these growth initiatives, which might change dramatically if we see another three months of markets sliding like they are,” says Jonathan Doolan, managing partner at Indefi, a global strategy advisor.

Key Takeaway | GPs: Company culture and employee lifestyle, alongside the role within a firm, have become increasingly important to in-demand candidates as multiple firms compete for the same type of talent.


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