As capital becomes increasingly scarce, major players in the private equity and investment banking sectors are intensifying their competition for talent amidst a gradual recovery in dealmaking activity. According to a recent report from Magellan Advisory Partners, recruitment in private equity saw a notable acceleration in the first half of 2025, driven primarily by rising demand in fundraising, investor relations, and marketing roles. This marks a significant rebound after a prolonged period of stagnation, where rising interest rates and market volatility hampered the dealmaking environment.
Dealmaking had experienced a temporary lift in the first quarter of 2025, but the momentum quickly dwindled in the following months as global tariff tensions unsettled investors. Data from Bain & Company indicated that the value of global buyout deals in April fell 24% compared to the first-quarter monthly average, and deal count dropped by 22%. Sasha Jensen, CEO of Jensen Partners, emphasized that while the deal flow may fluctuate, the necessity to secure capital remains a constant; hence, firms are proactively seeking skilled talent.
In the current climate, fundraising distribution teams have become essential to navigating limited partner (LP) liquidity, which refers to the fresh capital available to limited partners such as pension funds and wealthy individuals. Christopher Connors, an independent consultant for asset management firms, noted that firms are willing to invest significantly in fundraising talent, as the potential revenue generated by such hires can justify the expense.
Despite fundraising challenges, many leading U.S. firms are holding nearly $1 trillion in undeployed capital, commonly referred to as “dry powder.” With expectations of future rate cuts on the horizon, these firms are strategically expanding their teams in anticipation of an upswing in market activity, as highlighted by PitchBook analyst Kyle Walters.
On a broader scale, investment firms are increasing their market presence globally. Private equity titan Apollo is reportedly expanding its operations in Japan, which is becoming a noteworthy area for dealmaking. Other firms like Warburg Pincus and Carlyle are also ramping up their hiring efforts in the region. Southeast Asia and India are also witnessing an increase in recruitment as new offices open in key cities such as Singapore and Mumbai.
In North America, hiring levels have surpassed those seen in mid-2022 and 2023, with several U.S. megafunds actively interviewing candidates for positions slated to start in 2026. This shift reflects a strong demand for entry-level talent as firms aim to avoid missing out on promising recruits. Similarly, Europe’s private equity sector is experiencing a hiring resurgence, driven in part by recent shifts in monetary policy, including multiple rate cuts by the Bank of England.
However, a noticeable divide is emerging between larger firms with substantial resources and smaller firms struggling to adapt. Connors pointed out a clear bifurcation, where well-established firms with multi-strategy capabilities can afford ambitious hiring initiatives, while smaller entities are often left unable to recruit effectively and are even faced with downsizing.
In an era when private equity firms historically targeted investment banking’s talent pool, recent months have seen investment banks like Goldman Sachs and JPMorgan tightening their policies around poaching to retain top analysts. Goldman initiated a “loyalty pledge,” requiring analysts to confirm their lack of outside offers, while JPMorgan threatened termination for analysts who accept offers before fulfilling an 18-month minimum period. These measures reflect the changing landscape, where banks are striving to keep their analyst talent amidst fierce competition.
Despite these challenges, private equity careers may hold an edge due to the unique economic incentives they offer. Analysts moving into mid-level positions can potentially earn carried interest, a profit share that significantly enhances earnings over time and is taxed at lower rates compared to standard income, which many see as a substantial advantage over traditional investment banking pathways.
The escalating competition for talent is indicative of sector-wide shifts and the ongoing evolution of recruitment strategies in private equity and investment banking, setting the stage for a dynamic hiring landscape in the months ahead.
