Preqin: Private Capital Firms Adding Staff, Raising Salaries

Nov 1 2017 | 10:16pm ET

The vast majority of private capital firms have added to headcount since last year, according to new research from Preqin, while two-thirds expect to increase staff next year - and salaries are on the rise. 

Deal team members are most sought after, Preqin’s research shows, while junior, mid-level and senior staff are all being targeted by private capital recruiters. As a result, salaries are rising in order to retain and recruit top talent - almost four out of five firms increased their base salaries between 2016 and 2017, and 68% intend to raise them from 2017 to 2018. 

Preqin’s research was published in the company’s 2018 Preqin Private Capital Compensation and Employment Review. Key highlights:

  • Sixty-one percent of private capital firms added to their headcounts in 2017, while 8% reduced their staff 

  • Almost two-thirds (65%) of firms expect to add staff in 2018. Among them, 21% expect to increase their 
headcounts by more than 10%. 

  • From a hiring/retention standpoint, 72% of firms cited deals team members as most key, while 10% cited
corporate operations, 9% cited portfolio operations, and 6% investor relations staff. 

  • Forty percent of firms are targeting junior staff, while a third will look to hire or retain mid-level staff, and a fifth are seeking senior staff. 

  • Over three-quarters (78%) of firms increased their base salaries from 2016 to 2017, with 19% increasing them by more than 10%. A fifth of firms made no changes, while just 2% decreased them.
  • The majority of staff at all seniority levels saw their salaries increase, with the exception of executive management. Two percent of mid-level staff saw their salaries cut, but no junior or senior staff saw reductions. 

  • Looking ahead, 68% of firms expect to increase base salaries from 2017 to 2018. Among that proportion are 11% that expect to raise them by more than 10%, while 31% of firms expect to make no changes. 

“The private capital industry is seeing a record-breaking period of expansion, with fundraising accelerating, assets under management growing, and more investors than ever becoming active,” said Preqin’s Selina Sy, editor of the new report. “In order to keep pace with this growth, many private capital firms are seeking to increase their staff headcounts to better enable them to expand their operations, make deals and attract investor capital. It is notable that in a widely competitive deal making environment, it is investment teams that most firms cited as being the most important role from a hiring standpoint.” 

“The majority of firms have raised their base salaries in the past year, and many expect to do so again within the next 12 months,” Sy added. “While other elements of compensation, such as carried interest practices, may become more important among senior staff, many junior private capital employees receive little or no compensation beyond their salaries, so this metric is key in attracting new talent.” 

Founded in 2003, Preqin is a leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests. The company's Hedge Fund Online service is a leading source of intelligence on the hedge fund industry, with performance information for over 16,000 hedge funds across strategies and geographies. More than 47,000 professionals in 90 nations use the company’s products. 

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