We work with a wide range of private equity and venture capital clients and have a privileged opportunity to see how different firms approach recruitment. Each firm has its own way of running a process with varying degrees of effectiveness. Our checklist of best practice ideas is a synthesis of what we have seen work well in identifying the best candidate through a process where time and people are scarce internal resources.

• Plan well in advance. A typical process lasts at least three months and can take much longer than this, especially at more senior levels. If it is important for certain people to interview candidates, block out specific dates for this in their calendar. Deals can always get busy at unexpected times but where possible avoid interview dates clashing with major conferences and exhibitions in your city or peak holiday periods which may affect availability of both candidates and interviewers and also the cost of candidate flights and hotels.
  
  
• Be as specific as you can about your search. Ideally draw up a detailed job description to define both the tasks to be performed and the preferred candidate background. In particular, the better you can articulate your own firm’s culture and personality, the more effective the process will be, since ultimately technical and commercial skills will get good candidates the interview but ‘fit’ will get the right person the job. More...

In the first video in our autumn series, Gail discusses the latest trends in private equity mid market compensation over the last 12 months and the two key changes that she's noticed.

If you would like to watch the video and you are reading this through RSS feed or e-mail, please click this link.

I saw a fascinating graph this week comparing competencies to compensation in a candidate shortlist, so I tried out the technique myself in the graph below and it reminded me of a common dilemma that we often face in recruiting. The people who can do everything detailed in the job spec are usually the best rewarded and if our client doesn’t want to pay this top market rate, even though we have advised them this is the price for the job, then they have to be prepared to compromise on something.  So as a recruiter we are often torn between including top performers on our shortlist who are paid more than the budget or leaving them out and focusing on those people who match the compensation parameters but may not have all the experience ideally required for the role.   

So when we are putting together our shortlist, our internal conversation around this dilemma usually goes something like this.

Our recent breakfast workshop run by Robin Hindle-Fisher and David Cooper from Praesta Partners resulted in a fascinating discussion about the qualities that make private equity professionals successful and how they can also be their biggest weaknesses.

Robin and David brought out some cultural norms and behaviours that we associate with successful private equity investors and showed how they can hamper their personal and professional development. For example, the high degree of intelligence, stamina and resilience that private equity professionals exhibit which enable them to get deals done can manifest themselves in an abrupt and impatient manner which may result in alienating management when working with the portfolio.  Similarly, high levels of confidence and impatience with a strong sense of certainty can cause them to repeat mistakes and not develop as an investor.  

There were also some interesting insights into the level of team working that these behaviours generate. For example, the level of high self-reliance and strong appetite for control is counter to strong team work and can result in poor delegation and a resistance to being managed.  And yet it would seem logical that the best investment decisions would be made as a team and output could be maximised by strong team work.

On the plus side, everyone felt that private equity professionals were open to considering their own personal development and by pointing out the results of some of their behaviours, the investors were happy to adjust their behaviour.  After all, their own self interest would be served by being better at the job they do.  Robin and David had some great suggestions about how to manage these behaviours within private equity firms. For example, by re-framing the poor leadership behaviours as common traits of highly skilled individuals – which normalises the behaviour and enables it to be dealt with in a less personal way.More...

On a recent visit to our offices in Mexico and Colombia I was struck by the mix of excitement and professionalism in both countries regarding the growth and development of their nascent private equity industries.  There is a small handful of established domestic firms – established means on their second fund – most are either fund raising or investing their first fund. 

The knowledge and drive of the people in the funds is evident. And the people are on a par with the most successful mid-market US or European funds. Most investments have growth at the core of the investment thesis and the private equity professionals are using their talents, knowledge and skills to build nationally significant businesses in their countries.  Talent travels around Latin America – whether in the private equity firms or in their investee businesses and the search for management talent is continent wide.   This creates search challenges but also brings breadth to any people search.  And there is real willingness of individuals to relocate for the right opportunity.

Recent legislative changes are freeing up the opportunity for pension funds to invest in private equity and there is an increasing amount of funding becoming available for new private equity funds. Nevertheless, the concepts behind buy-outs, growth capital and venture capital are new to the business community and the private equity industry is playing a role in educating business to the benefits of this type of funding.  Buy and build type opportunities abound and the private equity firms are using platform acquisitions to consolidate sectors and build national brands in everything from healthcare and education to consumer goods and manufacturing. More...

With continued turmoil in the Eurozone and stalling growth throughout western economies, investment banks are once again reducing head counts with further rounds of redundancies.

A common misconception is that it is the worst performers that are made redundant and the best talent is always retained, which we have found isn’t necessarily the case.  And there is also the knock on effect that the uncertainty creates in the minds of the people who are left behind.  These create great opportunity for private equity in the hiring process. 

The uncertainty means that everyone is keen to consider other options and even the best performers are showing increased flexibility in the areas they will consider which can be great for secondaries and fund investing teams where candidates’ focus on direct roles has sometimes deterred them.  There is also a little more flexibility on compensation and location. And the timescale to hire and availability to interview is vastly improved for those actively looking.

Redundancies have been across a number of levels and from what we’ve observed it appears analysts with one/two years experience or associates with five/six years experience, and those at VP level are most likely to be facing possible cuts.

It’s a good time to hunt for talent in the banks whilst there is this window of uncertainty.  We would be pleased to advise you on the situation in specific banks and the likelihood of meeting your hiring targets from these pools.

Gail McManus - PER

Using case studies can be an effective tool to assess candidates during the interview process. In this video, Rupert Bell explains the merits of using case studies as well as the attributes you should look for to make sure you find the best candidates for your business.

If you would like to watch the video and you are reading this through RSS feed or e-mail, please click this link.

In this video Gail discusses best practice for benchmarking salaries for private equity funds and how to make sure you get your compensation plan and pay grades as accurate as possible.

If you would like to watch the video and you are reading this through RSS feed or e-mail, please click this link.