Posted on February 8, 2024

Investor Relations People Moves Report, 2023

Private Capital Advisory/Investor Relations: 2023, A Year in Review

The below commentary is written by Jonathan Press, Senior Consultant at Pearse Partners, complimenting the Investor Relations People Moves Report. (Available below)

The report below shows people moves in the PCA and Investor Relations space for the whole of 2023 as well as some analytics (level, gender split etc.). This has proven to be an invaluable tool in understanding the size of the market as well as the trends over time.

For some, 2023 was seen as a tough year for primaries fundraising, as many LPs reduced their commitments to funds due to various factors (the denominator effect, impact of higher inflation levels and interest rates at their highest levels since 2008 post financial crisis). Despite these factors, a lot of good funds closed this year, but the timeframes for these fundraises were often longer than had taken previously or longer than the GPs expected, even with the assistance of Placement Agents and Private Funds Groups.

Market discussions would suggest a potential shift in how Placement Agents and Private Funds Groups may be utilised for primaries fundraises. They have certainly proved their importance as part of the fundraising process however, there may be a bit of a shift in how they are used. Funds with less of a track record will likely continue to use them much how they were before. More established funds continue to recruit/hire experienced fundraising professionals in-house to lead fundraising efforts. This has been a common trend in the market for some time now, however, with fundraising periods extending, and future multiples potentially being lower, it may be felt by GPs that someone in-house could achieve this in a similar timeline, at a lower cost. They may perhaps change to using a Placement Agent or PFG to assist with pockets of investment in specific geographies they don’t cover.

Where primaries may have suffered, secondaries, especially GP-led continuation vehicles and alike, have had a strong 2023. It is expected that this trend will continue into 2024, with investors continuing to commit significant amounts of capital into secondary markets. The reason being that there is not enough capital in these markets to meet the high demand from investors and GPs who are both looking for ways to increase liquidity. The strong demand for GP-led transactions, has prompted several new entrants into this market.

In terms of what can be derived statistically from the moves data below, we can see that there is still a push for gender diversity in the candidates coming in at a junior level (Analyst-Senior Associate) where female candidates represent 59% of those being hired. As we move to mid-senior level positions (VP/Director) this drops a little down to 44%, At a senior level (MD and above) this drops even further to 27%, although admittedly with a smaller sample size.

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