Private credit managers are on a hiring spree.
Recruiters said demand from money managers for senior executives, portfolio managers, analysts and marketers with private credit know-how is running high.
"We're definitely seeing an uptick in recruitment," said Paul Heller, the New York-based managing partner and head of the financial services practice of executive recruiter Caldwell Partners International.
Mr. Heller said there's high interest within private credit shops for people with experience in direct lending, loan origination, structured credit and leverage finance.
Talent-seekers include money managers looking to build or expand private credit businesses, particularly private equity and other alternative asset managers; insurance companies that are deepening their bench of internal private credit managers; and a small number of institutional investors, especially Canadian public pension plans, that are building or expanding internal private credit investment teams, head hunters reported.
The C$286.5 billion ($228 billion) Caisse de Depot et Placement du Quebec, Montreal, for example, is building an internal team of executives and analysts to source partnerships with private credit firms to manage foreign investments within its C$43.5 billion credit portfolio. Canadian private credit investments are managed internally.
Caisse hired Robert Hetu in June as its New York-based vice president and head of U.S. private debt. Mr. Hetu was a managing director and leader of Credit Suisse AG's corporate lending group. An analyst will be added in New York to assist Mr. Hetu and a private credit investment officer may be added in the fund's London office.
One big reason for the uptick in hiring is interest in and inflows from institutional investors like Caisse that are seeking diversified return streams from the many variations of private credit strategies, including special situations and distressed, direct lending, real estate debt and structured products.
Analysis of hiring activity from P&I reporting shows new assets committed to alternative credit strategies by institutional investors totaled $79.7 billion in the seven years and one quarter ended March 31. Commitments have grown every year since 2010, with $18.26 billion for 2016 coming in 348% higher than the $4.08 billion in 2010. Institutional commitments to distressed debt, special situations, mezzanine, structured credit and multiasset credit strategies hit a high of $18.3 billion in 2016.
"Private credit is booming and demand for talent is everywhere," said Scott Fletcher, a San Francisco-based partner of Jamesbeck Global Partners LLC, a specialist asset management recruiter. He stressed that competition for private credit professionals is intense at every level, from C-suite executives to portfolio managers and analysts, loan originators, leverage finance specialists and marketers, noting private credit search activity is among the busiest of Jamesbeck's practice areas.
In the Europe, Middle East and Africa region, recruitment activity is especially strong for professionals with experience in trade finance in both developed and emerging markets; emerging markets direct lending; energy and infrastructure finance; and direct corporate financing, said Alex Cormack, the group managing director of executive search firm Sheffield Haworth.
He also noted hiring increased in London for fund financing — providing financing and capital solutions to private equity, secondaries firms, hedge funds and hedge fund of funds.
In the U.S., recruitment in private credit remains steady, with particular interest in real estate and infrastructure direct lending, Mr. Cormack said.
Given heightened competition, poaching has become more common among larger firms with existing private credit businesses or plans to build credit teams, observers said, pointing to a rash of high-profile moves by individuals and teams so far this year.
In August, credit specialist manager Cheyne Capital Management (UK) LLP, London, hired Anthony Robertson as chief investment officer of a new 10-person strategic value credit strategy team he will build. Dominique Kobler was brought on board as a senior member of the firm's risk team.
Messrs. Robertson and Kobler came from rival London credit manager BlueBay Asset Management LLP, where they held high-level positions as head of leverage finance and head of risk and performance, respectively.
Cheyne manages $19 billion and BlueBay manages $51 billion in credit-oriented strategies.
Alternative asset manager Ares Management LLC, New York, also tapped BlueBay when it hired Peter Higgins in May as a London-based partner and portfolio manager for the firm's credit team, which manages $65 billion. Mr. Higgins, who will lead the expansion of Ares' European leverage finance strategies, was a partner and senior portfolio manager in BlueBay's global leverage finance unit.
CQS (U.K.) Ltd., London, LLP recruited Nicholas Pappas as head of credit in May, replacing Simon Finch. Mr. Pappas was co-CEO of the London office of credit shop BlueMountain Capital Management LLC. CQS manages about $12 billion and BlueMountain runs $19 billion in credit-oriented hedge fund and long-only strategies.
PineBridge Investments LLC, New York, lifted out a team of three — James Fisher, Joseph Taylor and Doug Lyons — from Benefit Development Corp. of America, now managed by Benefit Street Partners LLC. The three new managing directors will launch a direct lending business to serve U.S. middle-market companies.
Mr. Fisher, who leads the new team at PineBridge, was president of BDCA; Mr. Taylor was managing director and head of capital markets; and Mr. Lyons was managing director and head of origination. PineBridge manages $85.5 billion.
Jamesbeck's Mr. Fletcher said despite high demand from all quarters of the private credit sector, high-quality, experienced candidates have become wary of changing jobs given the specter of a market downturn, and it has become more difficult for smaller firms to recruit candidates.
"We're getting late in the bull market cycle and it can't go on forever," Mr. Fletcher said. "If you are at a well-established, market-leading private credit firm, you have a better chance of withstanding a market downturn. My advice to candidates is to get themselves on a large, stable platform because being at a top five or 10 firm will be a distinct advantage."