Credit investment talent used to ask us first about the upside in a seat, whereas now it is increasingly how sticky the capital behind it is.
It is one of the clearest shifts in candidate sentiment we have seen at Laz Partners over the last couple of years: towards firms with a stable pool of internal or committed capital.
The second-order effect is the interesting one: many of these platforms are getting better. Several of our closest clients have significant long-term capital behind them (even where they still run meaningful external AUM), and are landing a calibre of talent that rarely moved to these platforms a few years ago.
Many are PMs and senior analysts from tier-one real money shops (without a stable capital base), and increasingly more hedge fund talent is also making the move.
Examples of where sticky, long-term capital comes from:
-Insurance capital: Managers owned by, or embedded within, large insurers
-Large asset owners: Canadian/Australian pension funds and Sovereign wealth funds, now a first choice for many rather than a fallback.
-Wealth channels: Managers with strong wealth businesses, where institutional teams can draw on sticky internal wealth capital when needed (or to seed new products)
Seeding is one of the quiet advantages. A team whose assets come largely from a stable pool or a parent company (such as an insurer), can often be funded from day one, before there is a track record to sell. Independent active managers have to raise that money while defending the rest of their range.
Active managers with a broad fund range, no captive capital and no clear edge (eg. a leading private credit franchise or a top-decile retail equity franchise) are finding it hardest. Some are shrinking or closing. Others are merging or being acquired, while asset owners continue to in-source.
Stability used to be something that most candidates would trade for upside in comp or career slope. Many still do (eg. those eyeing hedge fund seats), yet even among hedge fund talent, more candidates than ever are open to a seat backed by stable, long-term capital, even if it means lower comp in exchange for more career stability.
