Private equity is the new black in investment markets, and it’s proving to be the new black for ambitious young finance professionals too.
Despite high-profile failures, such as Airline Partners Australia’s AU$11bn bid for Qantas, Australian private equity is flying high. Australia has experienced a wave of private equity deals in the past 18 months, with a series of bids worth more than AU$10bn and many others worth more than AU$1bn. A year ago, such deals were unheard of.
The activity has attracted a host of US and European majors to Australian shores, including Kohlberg Kravis Roberts & Co, the Carlyle Group, TPG, Bain Capital, and Blackstone Group. Along with the interest shown by the likes of Permira, CCMP, and Providence Equity, it has placed a premium on talent in the local private equity market.
Local buyout firms are bulking up too. Greg Minton from Archer Capital says his firm hired five new staff ahead of the recently completed AU$1.36bn capital-raising, the largest ever by an Australian-based fund.
Minton says Archer sourced its new staff from a variety of places – two from offshore private funds, one from an investment bank, another from a consultancy and one recent graduate from a business school.
He would not comment on the size of the packages offered, but said competition is intense. “The packages you need to attract people to work in PE have grown, along with [market] prices and everything else. There is a war for talent.”
Other firms are also hiring, including Catalyst Investment Managers, which is currently seeking up to AU$1bn for a new fund and recently hired three investment managers – one from an offshore firm, one from a local investment bank and one from a consultancy. “We had five people before we raised money for our last fund and we think we will end up at 12 by the next fund,” managing director Trent Peterson says.
Adam Kolokotsas, head of banking and finance at recruitment firm Tanner Menzies, agrees private equity firms are sourcing people with a range of talents. But while they are seeking more staff, “they don’t carry a lot of fat”.
Entry level positions carry a base salary from AU$100k, with bonuses of a similar size. But the gradient climbs quickly after that. Senior investment managers are matching the packages of high-profile investment banks with base pays of around AU$300k, plus short- and long-term incentives