US private credit faces a talent bonanza, but for whom?

Amid an abundance of talent in the private credit world, two executive recruiters are drawing different conclusions about who will benefit. In its October newsletter, executive search firm Jensen Partners outlined the state of the employment market for alternative asset managers, drawing on data from the first two quarters of 2023.

Sasha Jensen, founder and chief executive of the firm, has been saying that a wave of mergers and acquisitions among credit managers created a bonanza for executives with the right credentials – a bonanza that is ongoing, according to the newsletter.

The newsletter, “Growth, Resilience & Decline in Alts,” says that credit has of late been the “unflappable titan” of the alternatives’ world. As to hiring in particular, credit firms have demonstrated powerful momentum: 272 marketers joined a new credit firm in the first half of 2023, and more than half of those came in the second quarter.

This is largely due to the “seismic shift in the banking sector as more banks pull back on their banking businesses”, creating room for nimble lenders in underserved markets.

Over the same period, real assets have established themselves as rising stars. Much of the growth here is focused on infrastructure investments, which as the newsletter says, “investors have long prized for their ability to provide stability in the face of a rising rate environment.”

In an interview, speaking of the alternatives world and its fundraising needs generally, Jensen observed: “Most agree that this is the toughest fundraising environment since 2008 and the buy side, now more than ever, is seeking to hire marketing professionals with a track record of raising assets from key LPs.”

In a separate interview last week, though, Kylie Hart, director at executive search firm Norgay Partners, also discussed the human resource needs of the alternatives industry, and took a different view of the present state of supply and demand.

Hart does not believe all is rosy for executives looking for work in the credit space. Rather, she sees the current situation as one in which supply and demand work in the hiring firm’s favor; the bonanza is for the employers.

“There are more active candidates in the market right now open to making moves into the private credit space than there are jobs available on investment teams,” Hart said.

Hart, like Jensen, recognises that fundraising ability is critical for private fund managers now, especially in the credit space. “LPs have become much more comfortable with investing in private credit, making it a more competitive fundraising landscape,” she said. “It is becoming more and more important that credit GPs have the right fundraiser in place who is well versed in credit and can highlight key differentiators that will set them apart.”

Both search firms agree that the uncertain environment requires steady hands. As Hart put it: “The last 10 years have had relatively favorable economic conditions. Now investors and lenders have to be able to navigate more turbulent waters, which is where experienced talent that has been through a few market cycles makes a difference.”