Carried interest increasingly offered to junior professionals, says exec search firm

Jensen Partners expects carry will become a common distinguishing factor in competitive job offers.

Jensen Partners, an executive search firm for alternative asset managers, expects offers of carried interest to more junior business professionals will become more commonplace in the current competitive jobs market.

In its newly published newsletter for the third quarter of 2023, Jensen observes that the receipt of carried interest has long been “a bonus for senior capital formation/business development positions”. However, it is increasingly on the table for negotiated compensation packages for a wide range of business development professionals.

Speaking more broadly, the newsletter says private equity and credit managers have done the most hiring among the alternatives firms in the latest quarter, recording 169 and 123 moves, respectively. Credit strategies in particular have seen an uptick year on year. Jensen believes 2023 will end as the busiest year on record for the hiring of credit-specific marketing professionals.

In attracting those professionals with competitive offers, carried interest can be a key distinguishing factor. As its prevalence increases, focus is shifting from just getting some carry to getting the right carry, structuring it to optimise both individual and firmwide performance rewards.

In a recent interview with Private Debt Investor, Sasha Jensen, founder and CEO of Jensen Partners, said she believes the trend towards democratisation of carried interest still has some legs. She said it has become integral to how professionals in the private asset management industry think about their compensation.

The newsletter also indicates that hiring activity remains strong in the alternative-investment industry as a whole, with only a slight decline in Q3 2023 year on year, from 789 to 743. “This has been a very tricky fundraising year,” Jensen noted. “Some people say it has been the toughest since 2008.”

Diversity in hiring remains top of mind for general partners, spanning all asset classes. In the third quarter, 395 of the moves have been ‘diverse’. This breaks down to 292 female candidates, and 103 male candidates who are Black, indigenous, or persons of color.

The female and BIPOC hires make up 53.2 percent of the total. This is nearly identical to the preceding quarter, when the percentage was 53.4 percent.