Private equity hiring and compensation are expected to increase next year, according to industry experts.
Speakers at Dow Jones' webinar, "Avoiding the PE Comp Squeeze," said that PE investment professionals can expect a modest pay increase of between 1% and 4% over levels seen in 2010.
A recent survey conducted by Dow Jones Private Equity Analyst and New York-based search firm Glocap Search showed that no firms expect a decrease in compensation in the coming year, said Brian Korb, Glocap's co-founder.
Compensation "will follow a steady incline with less volatility," than experienced recently, said Korb. "It feels like the market has settled."
Because private equity firms were quick to reduce expenses during the financial crisis in 2008 and 2009, they've been quick to rebound, Korb said. Half of PE firms will hire next year, he added.
Firms are looking for investment professionals to work on deals as well as fund marketers and investor relations people schooled in fund-raising. For most investor relations professionals, compensation won't be tied to how much money they can raise, but how strong their relationship-management skills are.
Compensation structure has changed since the downturn. Firms are focusing more on performance and less apologetic about paying B-rate performers less. Star performers are getting paid as much or more than they did at the peak in 2007, Korb said.
Write to Julie Steinberg at Julie.Steinberg @dowjones.com
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