Australia's private equity market may have been running hot for the past two years but local and international firms are still bolstering their teams, especially on the research and modelling side.
Much of the recent hiring, recruiters say, has targeted investment analysts and operational staff as teams are built out to help manage deals already done. "Many private equity firms are now starting to look more like investment banking teams," says Victoria Biggs, a consultant at Jon Michel Executive Search. "They are already top-heavy so we're starting to see the foundations of the team being hired."
Andrew Wood, a partner at Derwent Executive Search, says many firms are keen to strengthen their research and internal financial control capability. While entry point salaries are often less than in investment banking, the lure is the potential medium to long-term "carry" - or profit allocated to the team when investments are realised. While this is not as relevant for more junior staff, they can often participate in a secondary bonus pool.
Private equity also potentially offers a better work-life balance. Rob Douglass, principal consultant at Cambridge Consulting, says: "Investment banking can be pretty onerous. At least you might be able to get home by 7pm if you work in private equity."
Australian private equity funds raised A$4.1 billion in the June year, according to Thomson Financial and the Australian Venture Capital Association. This was similar to the previous year but up 131 per cent on 2004. A KPMG survey of Australia's capital markets expects total private equity funds under management to top A$14.5 billion by the end of 2006 and continue to rise next year.