Q&A: Farrell Associates’ Lotti Hawkins

Demand for professionals with impact investing experience continues to rise as more private markets managers launch impact strategies, says Farrell Associates’ Lotti Hawkins.

What have been the most notable hiring trends for private markets impact roles in the last five years?

Often it is firms that have an established ESG strategy and ESG team that are now launching impact funds or completing acquisitions of impact funds. Sometimes existing ESG teams that have ‘upskilled’ will take impact on as part of their role, but as the funds become more established, GPs will want to hire a dedicated impact team. 

Lotti Hawkins leads the private markets practice at specialist sustainability recruitment firm Farrell Associates

Over the past five years, the industry has moved from traditional private equity investing to incorporating ESG into due diligence and portfolio company support. Now it is moving towards a focus on innovation and real impact to achieve the UN Sustainable Development Goals.  

How much competition is there for impact talent, and where is demand coming from? 

In the UK, London has an established impact-investing presence and we see professionals moving from one impact fund to another. There are a lot of new fund launches happening in Europe and the US, as well as acquisitions of smaller impact funds by larger investment firms. Renewable energy funds are proving particularly popular.

Meanwhile, in Asia, there are more difficulties sourcing local impact-investing talent because ESG has generally been slower to advance in the region than in the UK, Europe and the US. As this market grows, locations such as Singapore usually look at relocating talent from Europe or the US. 

What skills or experience are firms looking for?

First is experience of launching a fund. Many impact funds are new, so they usually look for people that have been involved in fundraising or in the early stages of a private fund. Ideally, that experience would involve funds with an impact theme, such as renewable energy, social housing, or microfinance. 

Second is data science – people who are innovative when using or building data methodologies. Private markets firms mention there is often a skills gap in terms of people that can be innovative and adaptable with their academic data science background. 

Third is asset valuation versus ‘positive impact on society’ – this can be imagined as a spectrum from traditional private equity investing to impact investing. Candidates can often lean more to one side than the other; firms need people who can bridge the gap. 

What is your outlook for private markets impact recruitment over the next year?

It is difficult to say in the current market, but as PE has been said to potentially avoid the hard hit of an impending recession, we would expect that as funds continue to grow, they will need to hire innovative teams to ensure they are successful. 

With fossil fuel energy prices soaring and regulation such as banning the sale of new petrol and diesel cars in the pipeline, the number of renewable energy and infrastructure impact funds will undoubtedly grow. The energy transition means people will likely move from PE fossil fuel investments into renewable energy and infrastructure funds. 

As impact investing progresses, we will also see more funds linking environmental themes, such as climate action and clean water, to achieving tangible, real impact with social and impact funds that address those issues.