Private equity fund playing catch-up after COVID hiring freeze
In a sign that things might be getting back to normal in the world of private equity recruitment, EQT Group, the Swedish private equity firm with €40bn in assets under management, is back recruiting again. Even better, it plans additional hiring to compensate for this year's lack of it.
The fund, which announced its third quarter results yesterday, said it introduced a hiring freeze in spring, but has now lifted it. "We have already started easing the hiring pause and we now expect the increase in hirings to lead to an uptick, both now in the current period, but also in 2021," said CFO Kim Henriksson.
"When we think about 2021, we expect it also to be impacted by a catch-up from the freeze we have had here in 2020. So that would be in addition to the historically approximately 100-person net additions that we have had," Henriksson added.
In other words, EQT plans to hire over 100 new people next year.
Many of the new recruits are likely to come in the U.S. and APAC rather than in Northern Europe. - A new team has been created in Sydney and EQT plans an office in Tokyo next year. However, the fund has also created a new growth team headed by Seattle-based Marc Brown, the former global head of M&A and strategic investments at Microsoft and managed out of London by Carolina Brochado, who joined in June from SoftBank Investment Advisors, and there could be additional hiring here too.
Henriksson said EQT also intends to recruit global fundraising professionals and to expand its "central functions." These functions include an in-house data team currently numbering around 18 people and working on an artificial intelligence system called "Motherbrain," which Henriksson said has, "already sourced about $100m of investments for the venture funds." Motherbrain is being 'continuously built out.' It helps identify trend and source potential investment opportunities while also keeping an eye out for potential threats to the existing portfolio, explained Henriksson.
In the past three years, EQT has already expanded substantially - going from 427 global full time employees in September 2017 to 657 in September 2020. Despite the first half lockdown, it added 51 people in the first nine months of this year.
EQT's presentation yesterday also included the following helpful slide illustrating the principal behind the carried interest payments to employees that make private equity jobs so popular. Using an example of a fund with an accrued valuation of double the multiple of invested capital (MOIC), EQT suggests advisory professionals can end up sharing around 3% of the total invested value if hurdles are cleared.
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