An ideal candidate for an emerging markets private equity firm typically combines an international benchmark for experience and education with local market knowledge.
“[Firms] are generally looking for people who have the right cultural background combined with an international workplace experience,” explains Gail McManus, managing director of private equity recruiter PER.
This is no mean feat. “Particularly when most hiring is junior level analysts and associates, they haven’t had time to get both.”
Finding the right candidates for the senior partner level – often requiring 15 years or more of on-the-ground experience – also comes with challenges, says Edward King, a partner at executive research firm McLean Partnership.
“Unlike in the US or Europe, private equity is a relatively new product in emerging markets. On top of this, the relatively few people who do have a demonstrable track record are sought after and normally already working for a reputable fund.”
Compensation is also a delicate balance; if you are hiring someone who currently works at a large international firm with a view to relocating them to an emerging market, then compensation should be in the same ballpark as what they would receive in a developed market setting. But the exact figure can be tricky to land on, as McManus explains.
“Do you pay someone in Mexico the same as you pay them in China? Do you pay people in China the same as you pay them in Vietnam? Particularly when cost of living is very different,” she says.
At bigger funds, the compensation package (including bonus) at partner level is typically around $500,000, and at the director level is between $250,000 and $300,000, King says, with any carried interest on top.
Difficulty finding the right combination of international and local experience is reflected in the breadth of the shortlist recruiters are able to bring to present to firms.
“To find six to 10 people for a shortlist that meet the specifications of a typical LBO client is one thing, to find that many with the right level of experience and cultural understanding to make up a shortlist for an emerging markets investor is much harder,” McManus says, adding these lists typically end up with three to four candidates.
King adds that while it’s still possible to put together a list of seven or eight profiles, the firm hiring would likely need to be flexible on years of experience or be prepared to consider candidates who have not worked entirely within emerging markets.
McManus stresses the issue is “lack of quantity as opposed to lack of quality”.
“Most emerging markets have people who come from those countries who have had the opportunity to study or work internationally. They are often some of the highest achievers in that country, so if you can get the balance right you’re often talking to extremely talented people.”