The hiring buzz surrounding private equity (PE) is likely to get louder this year as the asset class attracts more investors.
With new funds being raised and new private equity groups entering the market, PE job opportunities are growing. Victoria Biggs from Jon Michel Executive Search says she has seen three to four times more private equity roles appear over the past 18 months – with no sign of slowing.
Angus Price, a partner at search firm Derwent Executive, sees more junior than senior jobs on the horizon. He says that private equity is “an extremely competitive industry to enter” and most candidates at the Associate level come from investment banking or strategy consulting.
In terms of average salaries, Biggs says that typically an investment analyst earns between A$100,000 and A$130,000 plus a bonus of 25%-75%; an investment manager could earn between A$140,000 and A$180,000 with a bonus of 50%-100%; and for an investment director, a salary would be A$250,000 and over with a bonus of 100%.
Comparing a role in private equity versus one in investment banking (such as corporate finance), Price says that although salaries tend to be similar, bonuses in private equity roles are generally lower. Why? “At more senior levels, candidates working in private equity get access to carried interest, where they can share in the profit of the fund,” says Price.
The popularity of private equity in Australia was recently highlighted in Ernst & Young’s ‘Transaction Trends 2006’ survey. For the third consecutive year, Ernst & Young reported that domestic companies will continue to raise funds to finance their expansion plans. Furthermore, it is anticipated that 25% of the total indicative A$800 million planned for fund raising will come from private equity and venture capital markets (up from 15% last year).