Private equity firms will create fewer jobs and pay poor bonuses in 2001, according to a headhunter's report.
The internet boom-and-bust cycle is hitting the jobs market in the private equity sector. While a year ago private equity firms faced competition for talent from internet start-ups, this trend is decreasing, said a report by TMP Worldwide.
At the same time less money is flowing into private equity funds, including those owned by investment banks: "As a knock-on result of their public securities portfolios trading off sharply, most institutional limited partners have hit their allocation caps for private equity."
"All this would seem to point to a disappointing 2000 bonus season," added the report.
TMP was unable to give any hard numbers on basic salaries or bonuses in the sector, other than an estimation that non-partner compensation levels will be 10% to 20% higher.
However the report did suggest that the only winners over the next two years are likely to be experienced professionals. As is often the case in a downturn, those with a good track record should see their value increase.