Local or offshore: Where to source private market talent

With private markets gaining traction in Australia, three recruiters explore whether fund managers should consider looking overseas to find top talent. 

There has been a raft of fund launches in this space in recent years as firms that have typically focused on institutional investors move their attention towards the retail and wholesale space – a theme that is not expected to slow down anytime soon.

According to ASIC, there is $148.6 billion invested in private capital funds and assets under management have tripled in the last 10 years. 

As a result, firms are looking to expand their private markets teams or make hires in the areas for the first time. In other cases, they may be building new distribution and marketing teams to target a retail market after traditionally only focusing on institutional or superannuation funds. 

But with such a niche asset class, there is only a limited supply of candidates available to work, especially as senior staff are often reluctant to move, which makes competition fierce among firms. Private markets is one of the few areas where remuneration is on the rise annually, while other asset classes are only seeing salary increases in line with inflation. 

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To unpack this further, three recruiters have shared with Money Management the benefits and disadvantages of hiring a candidate from overseas.

The benefits of hiring an overseas candidate include their diverse perspectives, specialist expertise or strong business acumen, as well as local knowledge if a firm is looking to expand overseas. Two-thirds of Australian employers believe the market is now more reliant on overseas talent than it was five years ago.

But whether an overseas candidate would be considered suitable to fill a vacant role depends heavily on the type of role on offer, the three recruiters told Money Management.

James Lindsay, senior practice director at Robert Half, said: “The appetite for hiring overseas talent within Australian asset management largely hinges on the specific role a business aims to fill. 

“For example, we’ve observed increased demand for international experience in the finance and operations functions, where skill sets often transfer readily across jurisdictions. However, a reluctance to recruit overseas talent is present in areas such as compliance and operational risk given the specifics of engaging with ASIC which differs from its overseas counterparts.”

A strong network is key, they said, and candidates from overseas may lack that local knowledge or experience that is necessary for distribution roles. 

Chris Hanley, manager of financial services at Michael Page, noted: “If it’s a distribution or business development role, then firms want to see you have local knowledge and a local market. Someone from New York or London won’t have that experience or network, so there is a preference for domestic candidates. Your contacts are key for sales roles.”

This is also the case for deal origination roles at private equity or venture capital roles, which depend on a local network to generate leads and initiate possible transactions. 

Mischa Bennett, founder and managing director at Capital Executive Search, said: “If you are looking for someone to work in deal origination, then overseas candidates will be at a disadvantage as they lack that local knowledge.”

Lindsay added: “A debt or private credit originator, whose value is deeply tied to their local network for finding suitable businesses to lend to, may find it challenging to secure a comparable role.”

On the other hand, those where the role relies on their investment skills may find overseas candidates hold a broader range of expertise than domestic ones or have specialist abilities.

“An investment analyst with similar experience will often have their skill set be highly transferable, especially if they have the same asset class experience regardless of their international background,” Lindsay said.

Hanley said: “If it’s a technical or analyst role such as in private credit or venture capital, then candidates from overseas can be attractive.”

Visa concerns

While securing talent from New York or London may sound like an attractive option, the necessity to offer an individual an Australian working visa is a significant deterrent, the recruiters said. 

The cost of sponsoring a candidate can be significant both in time and money and they often require an employee to remain at the firm for a specific period of time. This can be concerning for smaller firms that may not have navigated this system before, or for candidates who have to adjust to the specifics of the Australian workplace and regulatory environment. 

In other cases, a candidate’s overseas qualifications may not translate across into the Australian environment or be ineligible for the visa skills criteria.

Hanley said: “The visa situation is difficult. Fund managers are not enthusiastic about doing that even when senior talent is out there.”

The ideal situation, he said, is hiring an Australian who has gained experience overseas and is looking to return back home. 

“Someone who is Australian and has that local network but also has experience working overseas where they have upskilled but are looking to move back, those are the most desirable candidates.”

“If you are an Australian working overseas or someone who has working rights in Australia, then firms here will put you on a pedestal, especially for front office roles. If you need to be sponsored, then that’s a different story, and there’s no appetite for that,” Bennett commented.

As well as visa difficulties, other problems that the recruiters said they have encountered with international staff include cultural differences, language barriers, and cost.