German Market Update

It is just over six months since I moved full time to Munich to open a local PER office focused on the German-speaking markets. In that time, we have begun a number of new relationships with PE funds and been able to develop some existing relationships further, simply by being here full time and therefore being available to meet people readily in person (and so to pick up the local gossip). We have significantly increased the size of our German-speaking candidate pool and I am pleased to report that we have also completed a number of assignments successfully.

My impressions so far are of a market in quite good health. Mid-market buyout funds in particular have come through the recession quite strongly and are looking to make new investments in the recovery, and this of course prompts the need for people and in particular candidates with proven investing credentials and experience. In normal conditions, most recruitment into the industry is at entry level, analyst or associate, perhaps up to 70% of the open positions, reflecting the long term nature of the business and the incentive schemes. At present, however, we are seeing greater than normal demand from clients for mid level investors, candidates who can originate and lead deal teams on execution.

We are seeing renewed hiring interest from a few large LBO funds and the classic demand for top class junior investment bankers remains strong, but at present there is slightly greater interest among current PER clients for the best candidates from management consulting backgrounds. This partly reflects the emphasis on growth-driven investment cases rather than financial engineering, and the need for investors who can identify long term growth markets and business models. As ever, many funds are considering people from either background and the challenge is for candidates to demonstrate the best of both mindsets to present themselves as rounded investors with strong technical toolkits as well as broader commercial judgment.

Early stage investor groups in Germany are currently rather less active in recruiting in our recent experience, though there is quite a lot of networking to develop relationships outside formal hiring processes to facilitate possible later opportunities when the time is right. Specialist investor groups in areas such as life sciences and clean tech / renewables are approaching us to see a range of candidate profiles as interest in these sectors continues to develop. We have also been asked to find strong mid and junior level candidates for several fund of funds clients.

Overall, we are making good progress in establishing PER in this new market, with significant momentum from the UK team and the benefit of a number of strong existing relationships. Munich is also proving to be a good base for client contact with Swiss and Austrian clients and candidates, as well as German. PER’s positioning as a specialist firm with deep experience of hiring into the private equity and venture capital sector has been well received and the first hand experience of many of our team as investors before becoming recruiters is also seen to be a strong positive differentiator. Lastly, we have to acknowledge our good timing in opening this operation just as the European private equity industry was getting back on its feet. We can’t claim sole credit for it (yet) but it has helped to enter the market at a time of general expansion of renewed confidence, not to mention improved recruitment budgets.

As a team, PER are private equity people, for private equity people: We are very much open for business and keen to keep extending our network so please do not hesitate to contact us on +49 89 24 218 107 or at rupert.bell@perecruit.com if you are looking to hire or looking to find a new role in this industry.

Rupert Bell - PER