Private equity: no longer a good career move?

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Doomsayers are prophesying the imminent bursting of the over-leveraged private equity bubble. Is it time to give the industry a wide berth?

Not according to recruiters. "It doesn't matter whether the market collapses or rises," says Jon Michel, founder of recruiter Jon Michel. "PE people are the smartest people in finance, they're always one step ahead. If they buy in a rising market, they profit, if they buy in a slump, they build the asset up, and profit. Brains and capital are a potent mix."

There's no sign of job creation slackening - at least not yet. Michel says there were 30% to 40% more PE jobs advertised in Australia in 2006 than in 2005 and he expects the same for 2007.

Only the cream need apply though. "You need a 99.9% academic record, first-class honours, probably a management consultancy background, but the competition is fierce. PE firms cherry-pick, and those candidates are really, really well bid," says Oliver Darkes at recruiter Carmichael Fisher.

The pay is luscious. Neil Phillips, manager permanent recruitment at Hudson, says the base pay for two to five-year analysts is about AU$80k to AU$100k, often with 100% bonuses on top. Michel says pay varies "but the big kicker, the x factor, is the 'carry', the payout for a deal done." This is in addition to base and bonus is usually paid every few years once a fund has exited all its investments.

And, when you leave, everyone wants you. You can't lose, according to Michel - even if the industry does go belly up.