Private equity firms have a lot to contend with. Deal flow is dwindling. Add-ons want valuation multiples based on market highs. Skyrocketing yields have made leverage painful, and raging inflation and supply disruptions are plaguing portfolio companies. IPOs have disappeared as an exit strategy – and to top it all off, fundraising has slowed to a crawl.

So why, you ask, should the private equity industry be hiring now of all times?

Because the next few years will be all about hand-holding. Your employees will be guiding, cajoling, inspiring and negotiating like never before. With every management company, every lender, every internal department and every third-party vendor. At all levels.

And without your “A-team,” fundraising, returns and employee retention will suffer. This tumultuous environment is going to test the mettle of every investment firm – public or private.

Why should PE firms hire now?

Whether you’re a mega private equity firm with a large menu of fund offerings or a lower middle-market firm focused solely on US manufacturing, you can’t afford not to have the best and the brightest staffing every level and function of your firm.

This will mean making some tough choices and looking at your talent critically, especially in key roles. Is the same person who guided your ship when winds were fair the one you want at the helm when the 100-year storm hits?

Look at it like this:

Now is the time to look inward and figure out where the holes are in your team and plug them so you can maximize current market opportunities while cushioning the risks.

A silver lining to the turmoil

Hiring into private investment firms typically slows in Q4, as people wait for bonuses. But in a year when bonuses are likely to be lackluster and firms are worried about surviving a down market, this could be the perfect time to curate your team.

I’m seeing interesting movement in the private equity, private credit, real estate and infrastructure candidate pool. In recent weeks alone:

• Strong candidates are now reaching out to me and my colleagues, from MD level on down. They now regret not pursuing new career challenges when hiring was robust

• Active candidates who may have held out for higher offers or generous perks are more likely to be flexible. They are also open to niche strategies or non-traditional roles

• Fewer finalists are getting counter-offers that derail processes, ensuring your chosen candidate ultimately joins your team

Individual fit and style for PE firms

When you’re hiring, it’s important to understand an individual’s skill set and background. But figuring out how they’ll fit in with your current team is crucial. I would recommend putting potential hires through psychometric assessments – like the ones we use at Hanover – to determine what their management style is, how they work within a team and how their personalities and energy will add or detract from what you need to achieve.

Why use an executive search partner to hire top talent

Finding and placing private market professionals takes time. Hiring an expert search partner who knows the market and can access the entire available talent pool leaves you free to work on your business.

Not only that, but executive search lowers the risk of a bad hire, streamlines the placement process, provides vital intel, and makes for a collaborative experience.

But the main advantage? A guaranteed result.

If you need to fill a senior level position at your private investment firm, contact me and let’s set up time for a chat.