While the private equity industry continues to struggle, the secondaries market in private equity funds is doing rather well.

The poster boy for private equity’s ailments is Candover, which has pared staff from
102 to 41 this year as part of a restructuring programme. Global private equity investments hit a 12 year low in the first half of 2009 and funds have suffered big drops in the value of their portfolios.

However, the secondary market for buying private equity positions from distressed owners is doing fine. A report cited in today’s Financial Times found that 78% of investors have either bought a secondary pe position recently, or expect to do so soon.

Unsurprisingly, secondary funds appear to be hiring. Paul Capital announced nine hires to its secondaries team in August.

David Howell, managing director of recruitment firm EM Finance, says there’s increased demand for people who can restructure distressed private equity assets and that some are being hired on short term contracts of 6-12 months.

“They don’t get carried interest, but a 28 year old with four years’ investment banking experience and 12 months’ experience working with distressed assets can expect 150k on an annualized basis,” he says.

However, other private equity recruiters say the secondaries market is already populated for the moment and that anyone hoping for a job will need to wait until 2010. “The secondaries market is about to have its day, but there’s very little hiring at the moment,” says one. “We’re expecting more recruitment there next year, while headcount in buyout funds will continue to fall.”