Recruitment activity booming in Europe

Across Europe, a total of 43 appointments were announced during October (equivalent to almost 10 a week), according to unquote", suggesting that there may be a silver lining emerging amid the current gloom.

The largest proportion of recruitment activity occurred in the small- and mid-market buyout space, which accounted for 16 appointments overall - 37% of the total. Significantly, much of this was accounted for by investment professionals moving downstream from large-cap houses; a trend that represented over a third of all appointments in the space. Deal activity in this area of the market has been curtailed in recent months as the knock-on effects of the credit crunch have spread throughout the global economy. "Things are not as binary at the smaller end of the market; though getting debt is challenging, it is doable and it is still possible to find growth businesses despite the challenging economic climate," explains Kevin Grassby, managing partner of Bowmark Capital.

However, given the differences in how deals are sourced and structured at the top of the market, inevitable questions arise as to how easily people from these firms can be assimilated into buyout houses further down the value spectrum. But Grassby, whose firm hired two to its investment team in October from European Capital's buyout arm and Nomura Private Equity respectively, suggests that this perceived discrepancy is not as severe as is commonly assumed: "Its easy to forget that many of the people working in these firms were doing much smaller deals themselves not that long ago as mega-deals are a relatively recent phenomenon. It's just a case of getting someone with a generalist skills set, as to be successful at this end of the market you need to be fairly balanced."

The current downturn is also creating new opportunities for advisory groups as private equity portfolios hit troubled waters, as firms attempt to adapt their business model to the new paradigm, with intermediaries announcing 13 new hires in October - 30% of the total - making this the second largest category overall. With restructurings and insolvencies the issue at the forefront of GP concerns, it is no surprise that law firms represent more than half of this activity with eight new recruitments over the month. Countless internal moves across the sector are also part of this redeployment.

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