KEA CONSULTANTS

Research and Insights

H2 2021
 Confidential – for the use of Investcorp only

KEA CONSULTANTS
2021

TABLE OF CONTENTS

HIRING OVERVIEW 03

H2 HIRING TRENDS 04

HYBRID INTERVIEWING 05

DIVERSITY 06

PLANNING FOR 2022 07

 Confidential – for the use of Investcorp only

HIRING OVERVIEW

Hiring significantly increased in 2021

Buy-side moves increased by 55% from 2020 and 40% from 2019 Buy-Side Moves by Strategy
100%
12% 10%
The increase in hiring in 2021 and the key themes coming out of the year point to more competition for 90% 21%
candidates in the market. Kea advises clients to be prepared to vie for candidates; running efficient processes, 5%
5%
being deliberate but flexible with the candidate spec, and promote the fund as early as possible.
80%
10% 13%
5%
70% 3% 4% 10%
HIRING REMAINED CONSISTENT IN 2021, RELATIVE TO PREVIOUS YEARS 8%
15% 7%
The spike we typically see at the start of Q3 was shallower than usual and the summer was 60%
busier. As this continues in 2022, funds should prepare for more consistent competition in
the market 9%
50%

PROPORTION OF PRIVATE EQUITY MOVES FELL

The growth of hires into other sectors shows that candidates have more optionality. 40%
Candidates are likely to be considering opportunities in multiple strategies and funds
should adjust expectations on this accordingly
30% 60%
55%
48%
MOVES OUTSIDE OF INVESTING DOUBLED 20%
78% of moves to non-investing roles came from the traditional candidate pool, suggesting
that tech is continuing to take market share
10%

WOMEN MADE UP 38% OF MOVES 0%

Whilst this is consistent with H1 2021 and H2 2020, the increase in hiring in 2021 means that H2 2020 H1 2021 H2 2021
there are net fewer women on the market, increasing competition for a decreasing pool
Private Equity Venture Capital Credit/Debt
Growth Hedge Fund Non-Investment Role

03
 Confidential – for the use of Investcorp only

H2 HIRING TRENDS

VC and Growth funds Inter-bank hiring increased

found it easier to hire Moves into Strategy split by
women Gender
VC and Growth funds were able to capitalize on more women in Sell-side to sell-side moves made up 19% of all moves this half, 100%
the market increasing from 7% in H1 2021 and 2% in H2 2020
90%
These strategies hired more women by 15% and 14% respectively Banks have needed to backfill empty seats, and candidates have
from the previous six months. All other strategies fell, apart from looked to capitalize on this to gain access to more prestigious banks
Hedge Funds, who despite increasing female hires by 3%, hired the and teams. 80% 43%
fewest women proportionally. 46%
70%
What is the impact? 66% 66%
How did they do this?
60% 78%
83%
We have extensively surveyed the candidate pool and have found Timing - Candidates who have just changed employer are unlikely
that women are motivated by different things than their male peers. to want to interview immediately, and may not come to market until
next cycle 50%
Whilst these factors are not exclusive to VC and Growth, we have
found that funds in this space have been successful in demonstrating
how the below factors exist in their environment. Diversity - 30% of bank-to-bank moves were women. Banks have 40%
made a deliberate focus to try and maintain gender diversity,
Working with interesting companies - Female talent often equate meaning banks are now also competing with funds for female
‘interesting’ companies with businesses that are earlier in stage, talent. Our research has shown that women aren’t only drawn to 30% 57%
tech-enabled, or consumer-focused investing. They value things such as mentorship and security, which 54%
make remaining in banking compelling
Learning and Development - Women prioritize funds where they 20%
believe they have a greater opportunity to further their learning and CVs - Many candidates will have moves to explain on their CVs, with
34% 34%
development varying consistency of experience. 37% of bank-to-bank moves 10% 22%
went to J.P. Morgan, Morgan Stanley and Goldman Sachs. Funds 17%
Access to Portfolio Companies - A key driver among female talent is looking to hire from these institutions, particularly at more senior
the ability to create tangible operational impact on portfolio
businesses
classes, should expect to see such moves 0%
Compensation - Banking compensation increased dramatically over
Exposure to Tech - Our research has found that candidates are
the summer. It is possible that banks looking to attract talent will
attracted by the relevancy and longevity of technology. We advise
further drive-up salaries for Analysts and Associates. Similarly, banks
that funds capitalize on any exposure they can offer to this space
looking to lock down their new hires could tighten restrictions and
penalties on candidates for leaving a position, making it harder for
Inclusivity - An analysis of moves show that VC and Growth funds
buy-side funds to dislodge candidates
are more likely to hire candidates from atypical backgrounds.
Inclusive teams are attractive to women, as it shows commitment to
diversity is not just lip-service, and allows for a broader learning
experience Women Men
04
 Confidential – for the use of Investcorp only

HYBRID INTERVIEWING

Funds have had to be flexible in how they run processes over the past few years. Remote working has offered some positives logistically, but there are
consequences to running a process without any face-to-face contact. As CV-19 has continued to affect how processes are run and is likely to remain prevalent
in the near future, Kea consider adopting a hybrid interview process to be best practice in the current hiring climate, considering the below:

Start remotely

• Greater ease in scheduling allows for pace and volume in first rounds as needed

• Access to a greater pool of candidates due to international capability (where appropriate)

78%
• Candidates with anxiety around being seen interviewing are more comfortable joining remotely

• Networking events are now almost fully remote. The greater ease in attending events has led to greater numbers joining, as this offers the possibility of
participating anonymously

• Funds should be aware that remote interviewing requires less commitment from candidates – we have seen higher dropout rates because of this

of Kea placements resulted Do at least one round in person

from a hybrid interview
process • It is harder to gauge interpersonal skill or cultural fit from a virtual interview

• Asking difficult questions will feel more appropriate in person – particularly important towards the end of a process

• Socially distanced coffees or walks can be an effective compromise where necessary

• Candidates respond well to face-to-face contact. Should in-person interviews be held towards the end of the process, it can be beneficial to pay more
attention to preferred candidates in the earlier stages. This could be in the form of process mentorship or informal check-ins

Have a contingency plan

• While CV-19 continues to affect our daily lives, it is important to be aware that an entire event or office may need to be shut down, or candidates may have
to cancel interviews with short notice

• Preparing Zoom meetings as a backup can allow for Plan B to rolled out quickly and efficiently where necessary

• We advise that funds are as flexible as possible with rescheduling interviews. Candidates are mostly back in the office part time, and so do not have the
same agency over their availability that they did earlier in the pandemic

05

DIVERSITY CONTINUES TO BE AN IMPORTANT ISSUE FOR CLIENTS
In response to a lack of data around diversity beyond gender, Kea asked candidates from the 2020 Analyst class to fill in an anonymous survey. The questions
were designed to give us more statistical information about the make up of the class. The survey was voluntary, so does not represent the entire class, but does
give a useful snapshot of diversity in the upcoming banking class and how they choose to identify.
11% of responders identified as gay or bisexual
• Sexual orientation is an area that funds are increasingly
engaging with, to improve inclusion within funds as well
as recruitment into them
• Given so few candidates voluntarily identified as
LGBTQ+, funds who are committed to increasing
representation should start engaging with candidates
early and evidence true commitments to an open,
inclusive, welcoming culture
• 24% of candidates preferred not to answer this question,
suggesting that promotion of such policies would be
more successful in a format where candidates retain the
option to be anonymous, such as a remote marketing
event
1% of responders described their ethnic origin as black
• 55% of responders described their ethnic origin as
white
• The ethnic demographic of the candidate pool is not
representative of the real world
• When prioritising black candidates, we recommend
that funds:
• Keep other hiring criteria flexible
• Evidence what they are doing to ensure they
foster an inclusive environment
• Rigorously examine their own internal
processes and biases (within interview
processes and firm-wide)
• Hold advisors (e.g. Investment Banks and
Management Consultancies) to account on
the inclusivity of their deal teams in order to
increase representation in traditional
candidate pools
Confidential – for the use of Investcorp only
38% of responders attended private school
• Whilst not a perfect metric, looking at how many
candidates had fee-paying education can give us an
idea of the socio-economic background of the pool
• Only 9% qualified for free school meals or their country’s
equivalent. 26% chose not to respond
• Funds prioritising this type of diversity should consider
how to adapt their process to account for:
• Candidates being less networked than their
privately-educated counterparts
• Candidates appearing to be less motivated.
Offering diverse candidates mentorship
throughout the process can help to bridge this
gap
• Candidates having less access to mentorship
and preparation throughout a process
• How can you replicate a similar level of
mentorship and guidance throughout a
process to bring them more level with other
candidates?
06
 Confidential – for the use of Investcorp only

PLANNING FOR 2022

CLASS OVERVIEW OBSERVATIONS RECOMMENDATIONS

2020
7% 2% • This class started full-time work in the height of the pandemic
• Funds looking to hire 2020 candidates will have a lot more
The 2020 pool has been relatively untouched. Analyst 1 hiring is down optionality than other classes, but will need to adjust how they
Sell-side 34% from 2020. There were more candidates in this class than in evaluate candidates to account for the impact of remote working
previous years, meaning that what is now the Analyst 2 class represents • A reluctance to engage in training juniors now will have longer term
Buy-side a large pool with untapped talent. The 2020 class is the most gender effects. Hybrid working and its adverse effect on exposure, is
balanced (44% are women). unlikely to go away in the near future, and training, guidance and
Other mentorship is increasingly important to the way candidates assess
91%
opportunities

2019
The 2019 class has been the most depleted in this half year, dropping • The 2019 class has been affected by remote working, but their
16% 27% on the sell-side since the start of 2021. This pool also has the training was pre-pandemic
Sell-side greatest depletion of female candidates (34% of the remaining sell-side • We recommend that funds aggressively targeting 2019’s for this
Buy-side candidates in this class are women). Kea has heard from several reason move quickly
27% 57% women candidates that their sell-side employers have been • Engaging candidates with diverse criteria will require additional
Other advertising deliberate methods to keep them from leaving, such as buy-in from funds. For example, running an expedited process
protected weekends and rotations to popular teams, which is delaying where necessary, ensuring that diversity is visible on the interview
their moves into investing. panel and courting candidates through a process

07
 Confidential – for the use of Investcorp only

PLANNING FOR 2022

CLASS OVERVIEW OBSERVATIONS RECOMMENDATIONS

2018
This class has been picked over for approximately 3.5 years, and only
• As the pool is so depleted, funds should consider why they are
19% 37% of the original class remains. Whilst candidates have been
Sell Side approaching this class and think creatively to solve for that profile.
37% backfilled, if we work on the assumption that the best prepared and
For example:
most motivated typically are the first to move, this represents a
Buy Side • The lateral market could be considered, as these are likely to be
significant loss of talent. It is surprising that funds hired from this class in
the most talented candidates with the desired level of experience
Other such large numbers this cycle; doubts around the junior classes and the
44% • Consultants typically come to market later, so the pool won’t be as
need for more plug and play individuals meant this level of experience
drained of talent
was more attractive on the whole.

2017
• Similarly to the 2018 class, we advise that clients are flexible on
More of the 2017 class moved this half than from the 2020 class. This is
profile to give themselves access to as many top-performers as
unexpected, given how much talent has already left the class over the
possible and avoid exhausting an already heavily depleted pool
Sell Side past 5 years and how expensive it can be to hire at this level. This
26% 33% • Funds should be prepared to delve further into candidate
suggests that funds are prioritising experienced candidates, even if it is
motivations; why they stayed in advisory for so long, and to explain
Buy Side harder. There are still referred candidates on the sell-side in the 2017
why they made any inter-bank moves. Compensation should be
class and 30% are women.
Other discussed early to avoid mismatched expectations
41%

08
 Confidential – for the use of Investcorp only

CONTACT

For any further enquiries, or to set up a

meeting to discuss further, please
contact:

Amy Cook
Head of Research & Insights
Email: cook@keaconsultants.com

Kadeem Houson
Head of Buy-Side
Email: houson@keaconsultants.com