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The state of debt finance recruitment

27 June 2018

Categories: recruitment, debt finance

At Walker Hamill, we’ve seen a major increase in the number of recruitment opportunities in debt funds, with the most significant and sustained increase being among direct lending funds. But how has this impacted candidates’ chances of finding employment, and how have the benefits connected to these positions changed? In this blog, we’ll look into the state of debt finance recruitment and what you should know about the market.

Desired skills

First and foremost, employers will always be looking for necessary skill-sets from all employees in finance; namely, the ability to multi-task, being highly numerate, understanding of technicalities of company financing etc. But these skills should be universal among candidates, so employers will be looking for skills that will help to differentiate potential employees.

One of the key requirements at the moment is language skills. Having a second or third language will give candidates a great advantage, especially if those languages are German, Italian, or Scandinavian, all of which are consistently in demand.

Additionally, leveraged finance is growing particularly fast, meaning Associates with strong credit analysis skills and experience in this field are highly sought after.

Associate availability

The number of experienced Associates across the banking industry is falling, due to the speed at which Analysts are now able to move on into funds. The number of funds available has multiplied in private debt, private equity, and fintech, all of whom recruit from the same talent pool. That means this pool is shrinking fast, so there are significantly fewer Associates available to fill positions at funds. Consequently, funds need to offer generous compensation and a streamlined recruitment process to ensure they secure the best candidates.

This is good news for Associate level candidates but also signals a ‘war for talent’ between funds. However, candidates will still need to prove themselves to be the best of the limited talent pool to land coveted positions.

Compensation

2015 saw a drastic rise in banking and buy-side salaries – especially for Associates – but, since then, the rise in compensation packages has slowed down. Performance-based incentives used to only be implemented after a certain period of time, but many of our debt fund clients have started offering carry from day one. Specifically, this is more common among new firms, with large, well-established firms not following suit. While a few of the big players have started offering day one carry, it’s certainly less usual.

Candidates looking for new positions should study their packages carefully because different organisations offer different carry structures. Some employ a deal-by-deal structure, while others operate with a fund carry system. In the case of deal-by-deal, this can be paid as soon as the debt is deployed and then again when it vests, or as a lump sum when the deal vests. This is significant because carry has, until now, always been associated with high-level professionals’ compensation packages. The competitiveness of the job market has caused employers to start focusing on carry packages for junior and mid-level professionals, too.

 

So, for the time being, the market is looking pretty good for Associates, but only if they are able to establish themselves as a high-value candidate. Meanwhile, employers need to be able to source reliably excellent candidates to fill crucial positions. At Walker Hamill, we ensure the candidates we represent are amongst the best in their market so firms can come to us if they’re looking to get the best of a limited talent pool. If you have any questions about our blog or are interested in becoming a client or a candidate, feel free to get in touch via our contact page. We’ll be happy to hear from you.

 

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