Wall Street’s “Barbarians at the Gate” are slowing down after nearly 25 years of beating the stock market.
Earlier this month, investment firm Hamilton Lane issued a report showing that the MSCI World Index, a leading stock market indicator, beat out private equity returns for the first time since the dot-com bubble burst in 2000. Hamilton Lane’s data represents performance through September 2024 for buyout funds that started investing in 2022.
Prior to this, the leveraged buyout industry, also known as private equity, had been on a tear. Sure, it felt some pain during the housing crash and the following recession, but that also meant that interest rates stayed lower for longer — paving the way for cash-rich companies like Blackstone to pick up assets on the cheap, which helped drive returns and more investors. In July 2023, Blackstone became the first private equity firm to manage $1 trillion in assets — three years ahead of the company’s prediction to investors.
As Apollo CEO Marc Rowan said at a presentation last year, much of the industry’s returns over the last 15 years (he excluded Apollo’s) “was not the result of great investing, but as a result of $1 trillion in money printing. Well, guess what? We stopped printing that magnitude of money.”
Indeed, since interest rates started ticking higher, financial sponsor dealmaking has slowed, IPOs have ground to a halt, and dry powder (industry speak for money yet to be invested) has stood at near all-time highs even as fundraising slowed by almost half from its 2021 peak.
That’s not to say that the industry broadly known as “private equity” is dead — or that all buyout funds have underperformed stocks in recent years. Quite the opposite. Firms like Blackstone and Apollo have been busy issuing loans and investing in large infrastructure projects (think data centers). Indeed, Apollo’s lending business is now nearly 10 times larger than its traditional buyout business.
What does it all mean for budding masters of the universe looking for a career in private equity? We spoke with a range of experts, from industry insiders to consultants and recruiters, to understand what is ahead for professionals looking to break into the lucrative field of private-market investing.
“Private equity was able to get lazy because of ZIRP.”
They said there is no shortage of opportunities for aspiring financiers who know where to look. Private equity’s loss has been private credit’s gain, and within private equity, there are more opportunities than ever for pure-play operations experts skilled at running businesses.
As Robin Judson, founder of recruiting firm Robin Judson Partners, put it: “I think that people who want to do private equity will pursue it, while people who just want to invest may look toward other strategies.”
Here’s a guide to a career in private equity as the golden age of corporate buybacks gives way to private credit and other types of dealmaking.
The rise of the portfolio operator
When interest rates started rising in 2022, company valuations remained loft, making it harder for buyout firms, which rely heavily on debt to make purchases, to find deals that could generate returns. This has led to a shift in demand for professionals who know how to drive returns by changing how a business is run, said Glenn Mincey, KPMG’s head of US private equity.
“This recalibration has given professionals in the industry new focus outside of buying and selling companies,” Mincey told BI.
Indeed, these pros used to be called in to help manage a company after it was purchased. Increasingly, they are getting involved in advance of an acquisition because they are often best positioned to know how to maximize performance through operational improvements.
The largest firms will hire teams of operational experts with expertise ranging from technological transformation to supply chain and logistics to talent acquisition and management. Even traditional deal professionals have become more operationally focused.
“Private equity was able to get lazy because of ZIRP,” a VP at a mid-market private equity firm told BI, referring to the acronym for the Federal Reserve’s zero interest rate policy response to financial crises starting in 2001. “That’s gone away, you have to know your shit now,” this person added.
This hands-on, entrepreneurial approach can be seen in the growing rise of so-called search funds. Sometimes described as mini-private equity, a search fund is a small private equity fund run by one or two individuals that’s focused on purchasing one small business like a carwash or HVAC company. Once purchased, the fund works on streamlining operations and creating value.
According to a 2024 Stanford Business School study, search fund creation hit an all-time high in 2023, the latest year with data, with more than 90 first-time search funds raised. This strategy is attracting a younger group of professionals right out of business school, or even before business school, with Stanford finding that nearly 80% of first-time fundraisers in 2023 clock in at 35 or younger.
The private credit boom
The same high interest rates and global uncertainty that have dampened the traditional private equity industry have made nonbank lending, also known as private credit, more attractive.
Even in a tough economy, “companies still need capitalization,” explained Judson. And with banks pulling back on riskier lending, private investors have stepped in to offer “more creative financing solutions,” she said.
Blackstone, which made its name in private equity and then real estate investing, saw its credit business grow to become the largest business in its portfolio by assets under management last year. Apollo now counts more than 80% of its $751 billion in assets under management as private credit.
As PWC’s leader of its private equity advisory practice Kevin Desai told BI in January, the private credit job market is hot in part because there simply aren’t enough people with direct experience to fill lenders’ needs. One reason is that private credit firms want professionals with lending experience.
That means recruiting from the debt-raising or trading arms of investment banks — or really anyone with lending knowledge who can be trained.
Nelson Chu, CEO and founder of private credit investment marketplace Percent, told BI that his firm has also recruited talent from debt rating agencies like Morningstar and Moody’s. Its often worked out so well that the firm has seen its workers get quickly poached after they get up to speed, he added.
What this means for private equity jobs
Anthony Keizner, cofounder and managing partner of Odyssey Search Partners, told BI that hiring is “very buoyant” in certain private equity businesses, including the popular and dry-powder-rich niches of secondaries, buying and selling of stakes in other private funds, and infrastructure.
The slowdown in the traditional private equity business of buyouts is felt most acutely in midlevel and senior positions, he said.
“Most buyout firms have slowed their hiring plans in 2025 compared to the recent boom years,” he said. “Many private equity firms feel they are adequately staffed at current deal volume levels.”
Hiring at the junior level remains active, he said — a sentiment echoed by Tim Roth, partner at advisory firm Armanino Advisory.
“I don’t believe junior hiring is decreasing, but I think it’s becoming more competitive to get a shot,” Roth told BI, noting that AI could exacerbate the challenge.
For professionals who have already broken into the business, there’s less pay but not a lot of eagerness to jump ship either. One reason is that PE firms still have a ton of dry powder to invest and portfolio companies to sell when the time is right.
“I tell candidates not to leave their jobs right now without having another job,” Judson said. “If you have a job, assuming the portfolio is sustainable, you will eventually get paid.”
The private equity VP agreed. “I haven’t heard of many people at my level looking to run for the exits,” he told BI. Even with realizations, and therefore carry and bonuses lower, the industry still offers “the highest upside” for compensation, he explained.
Private equity, with its tie to interest rates and the overall health of the economy, is a cyclical business. Previous golden ages, like the 1980s or the early 2000s, also ended, and new ones rose up in their stead.
“The key word right now is stagnation,” Judson said. “Nobody knows how long this uncertainty is going to last. Is it going to last for months or years?”
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