Recruiters predict renewed private credit hiring spree

Kellie Ell

Reporter

While job-hopping has become commonplace in the post-pandemic landscape, companies are expected to slow hiring in 2024. But some sectors are bucking the trend, including private credit.

“Last year was quiet in private credit hiring, particularly compared with 2022 and 2021. But there’s still a spotlight on private credit right now,” says Harry Oliver, who works in executive search across the credit markets for London-based Paragon Search Partners.

“We’re having a lot of conversations with players who want to get into private credit. We are speaking with new entrants, such as sovereign wealth funds, insurance companies and hedge funds, in addition to the credit funds and alternative asset managers that have traditionally dominated,” he says.

There’s no doubt that private credit’s growing appeal — the sector is valued at roughly USD 1.6trn, according to some estimates — has helped create jobs. Banks have lost market share as a result.

“The banks have been blown out of the water [by alternative lenders]. Now banks are trying to do direct lending in their own way, either off their balance sheet in clubs, or raising third-party money,” Oliver says.

Last autumn, Wells Fargo partnered with Centerbridge to form a direct lending fund. Barclays, Rabobank, Deutsche Bank, JP Morgan, Morgan Stanley and Société Générale are just some of the other big banks that have joined the party.

“It’s smart business practice to make sure you’re growing as the market grows”

Tammy Davies, Partner | Morrison & Foerster

Nevertheless, Oliver is seeing senior leveraged finance bankers move to funds. “The people who work at banks, their skills and networks are becoming increasingly appropriate for the funds.”

Tim Warrick, group head at Principal Alternative Credit, agrees. “Many commercial banks are just not able to compete in this market,” he says.

Principal Alternative Credit’s direct lending team has more than quadrupled since the firm made its first direct loan in July 2020. It now employs 30 credit specialists. And the Des Moines, Iowa-headquartered firm expects to hire more. Warrick says the opportunity for growth is higher for his business compared to banks. “The entrepreneurial spirit of our team is different. The process is more nimble and more responsive to clients.”

Tammy Davies, a partner at law firm Morrison & Foerster, which focuses on private credit and direct lenders, is also predicting further hiring. She says: “It’s smart business practice to make sure you’re growing as the market grows.”

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Global credit funds & CLO's

January 2024 | Issue 261

Published in London & New York.