Insights

Private Debt Outlook 2023 (Pitchbook)

Despite the uncertainty around market conditions, institutional investors will still find private debt attractive in 2023. The asset class offers options that fit various risk appetites while providing diversification. For example, Direct Lending to the middle market requires strict underwriting and deal terms. This strategy tends to yield better returns during a downturn vs. the large-cap market. For those firms that offer opportunistic credit strategies, investors will find the flexibility to pivot from making loans to trading stressed/distressed debt in secondary market appealing.

Whether investors are concerned with inflation protection, higher interest rates, or slower economic growth (or all of the above), investing in private debt offers several solutions.

(Institutional Investor)
As investors rethink their private equity allocations, the PE secondaries market has benefited – reaching a new record of $57 billion through H1. As long as concerns about inflation, rising rates, the war in the Ukraine and impact of Covid remain, the Secondaries market will offer diversification, liquidity and should continue to thrive.

(McKinsey & Company) The state of diversity in US private equity. 
McKinsey & Company examine the efforts of PE firms to ensure a diverse workforce. The data shows that private equity firms have increased the percentage of ethnically diverse talent and women employees but note that promotions for women and deal-team diversity metrics are still lagging.

How a growing asset manager made its first ESG hire.

Read and share this case study here (PDF). 

Mandate and Challenges

Our client is a growing asset manager with a long history of value investing, including a top-ranked equity Global Value team which identified the need to integrate ESG factors into their investment process. TLG was engaged exclusively to identify and attract an ESG Analyst who would develop a new ESG framework, identify governance priorities, and integrate ESG factors into the Global Value team’s investment process.

Framework – as ESG factors are achieving mainstream consideration, many investors still do not have a framework for their integration. Our client needed to meet candidates with experience developing a framework from scratch.

Consensus – the effects of ESG factors on investment performance are still being debated. Our client needed candidates with strong leadership qualities, including the ability to engage skeptics and build consensus within the Global Value team and beyond, including the C-suite and other investment teams.

Turnaround – TLG was awarded the mandate after a retained search firm was unable to generate adequate results, including strong engagement from short-listed candidates. TLG needed to provide a fresh look and prompt turnaround.

Solution

TLG has mapped the market of ESG investment talent and developed relationships with relevant leaders in asset managers, consultancies, and ESG data providers. At the outset, our filter yielded a long list of 76 potential candidates who were not previously engaged.

We customized our screening interviews to capture our Client’s needs for experience in ESG framework development, positive leadership traits including consensus-building and advocacy, and genuine interest in the opportunity.

Success

Diverse short-list – TLG short-listed 13 profiles, 11 of which were selected for interviews (85%). 6 of those 11candidates are diverse (55%).

Finalists – 3 highly engaged finalists were identified 5 weeks from engagement.

Placement – with our help, the Company landed a passive candidate they were targeting from start to finish. Also a diversity candidate, she was pre-closed by TLG and accepted the offer within 24 hours of delivery. She starts in March.

Sean Locke is Managing Partner and Founder of TLG | slocke@locke-group.com

The Locke Group (TLG) is a specialist executive search firm which has served the financial industry since 2003. As a boutique, we are deeply invested in our clients – our care for their experience and the experience of their candidates is second to none – and we possess both the strength and flexibility to deliver results which help to power their business.

A critical hire for a growing energy investment banking team. 

Read and share this case study here (PDF). 

Mandate and Challenges

Our client is a global bank with a rapidly growing corporate and investment banking presence in the United States. As a part of their efforts to build their Energy Coverage business, the Company was successful in hiring senior bankers from bulge bracket American firms but needed to turn their attention to finding an experienced Vice President to “quarterback” new deals. The team wanted a Power & Utilities specialist from a top firm who would ideally have additional deal experience in renewable energy.

Solution

After consulting with the head of the team, TLG recommended a nation-wide search strategy targeting teams from major global banks as well as leading energy and infrastructure boutiques. We identified teams in major metro areas including New York, Houston, San Francisco, and Chicago.

To attract strong candidates, we leveraged our client’s inherent advantages – their collaborative culture, stability, sizeable balance sheet, and their growth trajectory. Most importantly, the role offered opportunities for professional development and promotion. We reached out to candidates within our existing network and beyond via referral and direct outreach.

Success

Within 10 days of receiving the mandate, TLG interviewed more than 10 Power & Utility Coverage VPs and presented a short list of 6 interested candidates to our Client. Each candidate hailed either from a major North American bank or a leading boutique.

5 of the 6 presented candidates were invited to interview and, after a short-but intense process, a finalist was identified and hired – 29 days after kicking-off the search.

The new hire came from a Chicago-based boutique which focuses on energy and infrastructure banking, with a specialty in renewable energy projects. His renewables experience proved critical to the early success of the team and he was promoted to Director in his second year with the firm.

Sean Locke is Managing Partner and Founder of TLG | slocke@locke-group.com

The Locke Group (TLG) is a specialist executive search firm which has served the financial industry since 2003. As a boutique, we are deeply invested in our clients – our care for their experience and the experience of their candidates is second to none – and we possess both the strength and flexibility to deliver results which help to power their business.