Mixed messages in PE hiring

Survey results indicate that GPs might be underestimating their staffing needs for the coming year. Less than half (48 percent) of US-based GPs said they plan to increase their headcount over the next 12 months, according to a recent survey by professional services firm BDO. However, last year, only 44 percent of respondents said they planned to hire fund employees but when asked this year, 62 percent said they had made hires over the past 12 months.

 

Even if GPs hire more staff this year, it is unlikely that those hires will be in the compliance department. Only 24 percent of the overall respondents said that they planned to add to their compliance teams, while 74 percent said they would not be making any changes to their compliance staff. Generally speaking, CCOs and others have told pfm in recent interviews that private equity firms have increased their compliance headcount during the initial post-crisis years in response to more regulation and oversight, but have since paused that trend now that the dust has settled on new rulemaking. 

 

Although they do not plan to add more compliance-focused professionals, the managers surveyed do have plans to respond to the SEC’s increased oversight of private equity fees and expenses in the next year. Most respondents (57 percent) said they will enhance internal controls, including governance and compliance, over the next 12 months. Less managers (39 percent) intend to increase LP communications and disclosures to enhance transparency with regards to fees.

 

For private equity remuneration trends, readers are invited to see the January issue of pfm.