In part II of a two-part series on Asian private equity, we discuss why contractors are currently in demand, and why support staff may have to wait a while before their skills are sought after.

Private equity firms in Asia typically prefer to employ permanent staff, but the financial crisis is forcing many to use fixed-term contractors.

Putting someone on the payroll for a set time – usually one, three or six months – keeps costs under control, while allowing PE firms to properly assess the growing pool of potential investment opportunities in Asia.

“I’ve seen a growing number of fixed-term jobs in private equity over the last few months. In the past when the corporate finance market was still buoyant, there were very few PE contract roles available as it was near impossible to get an i-banker to accept contract," says Gary Lai, manager, financial services at Robert Walters.

These roles are mainly for investment analysts, according to Lai. “They crunch the numbers, do the due diligence and provide the data for the senior people to make the decisions.”

Contracting is one of the few functions where M&A bankers are still popular at PE firms. “And it’s easy to convince them to move. The pay isn’t as good as i-banking, but it helps them to get their foot in the door of private equity, which isn’t easy for bankers to do these days,” adds Lai.

The back office bides its time

Hiring in the back-office remains quiet. “Most private equity firms are keeping their powder dry, but I’m working with a couple who have hiring mandates,” says Guy Erricker, managing director, Charterhouse Partnership.

Firms continue to be cautious, waiting for the front office to start executing transactions before they build again in operations, he adds. “They are talking about recruitment now, but not much is happening yet.”

There is, however, hope on the horizon once the deals get going. PE firms will need extra staff, in functions such as accounts and risk, to support the new workflow.

Will it be difficult convincing banking-sector candidates to apply for back-office PE jobs? Probably not. “Candidates are interested in PE firms because of the smaller team sizes, less structured working environments, broader job functions, and potentially higher pay,” explains Erricker.

While operations staff in banks can expect bonuses in the two-to-four-month range, private equity employees of a similar level can potentially earn payments of up to eight months.

But, as in the front office, firms can afford to be picky. “They are no longer so keen to take on back-office staff who don’t have private equity experience, due to the availability of PE experienced candidates on the market,” adds Erricker.