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Recruitment in the private equity industry in the UK has been relatively resilient, even throughout the last six months, and few firms have announced any plans for redundancies.

However, deal activity in Europe is slumping. It fell by 30% in the third quarter of this year and the buy-out market fell to $11.5bn, according to data from Dealogic cited in the FT, as banks’ appetite to finance transactions has disappeared.

From an employment perspective this is slightly concerning. Our own figures for Q3 suggested that private equity was still a growth area (jobs increased by 34% globally year on year), and more junior investment bankers were viewing it as an alternative career option. The situation is currently a little more frosty.

“New opportunities have undoubtedly slowed in the fourth quarter, but there are still pockets of activity,” says Gail McManus, managing director of Private Equity Recruitment. “Larger firms are taking on people with mid-market experience as the size of transactions decreases, and those firms taking a ‘buy-and-build’ approach are still looking to hire.”

There are, however, some worrying signs. Preqin, the private equity research firm, suggests that total employment within the larger fund houses in the industry current stands 85,000. While it was unable to provide comparative figures for last year, there are indications that growth in the industry is stalling.

According to Preqin, the number of ‘active’ private equity firms, namely those still raising funds, stands at 4,504 this year, which is a small decrease on the 4,513 companies in 2010.

“This is in itself significant, since preceding years have seen consistent growth in the number of active firms,” said a spokesperson.

Some private equity companies have continued to hire. HSBC’s recently spun-off private equity vehicle Graycliff Partners has indicated its desire expand, while KKR has suggested that Europe is still a location where it’s likely to grow.  Pantheon, Park Hill and Advent have all announced new recruits recently.

But are some companies now thinking of making redundancies? McManus thinks significant cuts are unlikely to emerge.

“Most firms are still fund raising, but if the amount of money raised disappoints, we’d expect some companies to scale back,” she says. “This will largely be focused at the partner level; this is more cost-effective than cutting juniors and some will take the opportunity to retire, which would remove the glass ceiling for some people to move up within the firm.”