Pay for top private credit talent in Europe continues to grow

An article by Finance News has highlighted how private credit professionals have emerged as the highest-earning executives on the buy-side in Europe, with an average compensation of €13.7m last year, including salary, bonus and carried interest, according to Heidrick & Struggles. This surge in earnings reflects the growing demand for expertise in the sector, which has seen an influx of new entrants from investment banks and private equity firms.

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Managing partners and partners in the private credit sector received an average salary of €389,200 and a bonus of €710,000, with carried interest payments constituting the majority of their compensation. This places them at the forefront in terms of salary and bonus among senior executives in private capital, trailing only behind top executives in big buyout firms in overall earnings.

Buyside firms such as Blackstone, Ares Management and Apollo Global Management have attracted billions from investors to focus on private credit strategies, including direct lending, mezzanine finance and distressed debt investing.
"The market has really picked up for private credit professionals, particularly in the mid to senior levels in Europe, where we've seen firms start to build out teams." Anna McLeod
Anna McLeod, Associate Consultant, highlights the intense competition for talent in the private credit market, particularly in Europe. She notes that while compensation for associates has stabilised to around £100,000 to £120,000, there is still significant demand for mid to senior level professionals.

Oliver Noye, Head of Private Credit, observes a diverse range of backgrounds among juniors entering the private credit sector, with many transitioning from leveraged finance divisions in investment banks. He notes that while there is a surplus of candidates in the market due to banking redundancies, credit funds remain selective in their hiring processes.

Despite regulatory scrutiny and concerns about the opaque nature of the market, the private credit boom shows no signs of slowing down. Investment banks like BNP Paribas, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley and Nomura have ventured into private credit, further fuelling competition in the sector.
"There are a lot of candidates on the market, so credit funds are still very selective with who they take on." Oliver Noye
While increased pay reflects firms' efforts to retain existing talent, the head of a European private credit fund suggests that the growth in fund sizes doesn't necessarily translate to a significant increase in hiring. Nonetheless, the sector continues to attract attention and investment, underscoring its importance in the European financial landscape.

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