Private equity raids Wall Street for fundraising talent

With capital harder to come by, private equity giants and investment banks are waging a global battle for talent as dealmaking activity ekes out a recovery.

Private equity recruitment accelerated in the first half of 2025, led by fundraising, investor relations and marketing roles, according to a recent report from Magellan Advisory Partners. Broader investment hiring also rebounded after two years of freeze or slowdown.

This hiring spree comes after the private equity sector remained stuck in a holding pattern in recent years, as rising interest rates and market volatility put the brakes on dealmaking. Fund managers were left with an expanding pipeline of companies they couldn’t sell, with exits postponed.

In the first quarter of 2025, buyout activity picked up, but the momentum faded quickly in the next quarter as tariff turbulence unsettled investors and stalled deal pipelines, according to Bain & Company. Global buyout deal value in April was 24% lower than the first-quarter monthly average, while deal count slipped 22%, according to Bain analysis.

“While deal flow is cyclical, the need to secure capital is permanent — firms are investing ahead of the curve,” said Sasha Jensen, founder and CEO of Jensen Partners, a global executive recruitment firm.

Fundraising distribution teams are “central to survival” in the current constrained, limited partner liquidity environment, said Jensen. LP liquidity refers to the amount of fresh capital that limited partners — including pension funds, sovereign wealth funds, family offices or high net worth individuals — have available to commit to new funds.

“Firms are happy overpaying for fundraising talent,” said Christopher Connors, an independent consultant for asset management firms. “It can be a large expense to the firm, but relative to how much revenue these people could bring in, it’s a good deed to the firm.”

While fundraising has been challenging, many large U.S. firms are still sitting on nearly $1 trillion in undeployed capital, also known as dry powder, noted PitchBook’s Kyle Walters. And with expectations of rate cuts, these firms are positioning themselves for a rebound with deeper benches of talent, he noted.

As global investment firms channel more resources into the market to ride a wave of deals and rising assets, private equity behemoth Apollo is reportedly growing its footprint in Japan and expanding hiring in its Asia wealth arm.

Similarly, Warburg Pincus and Carlyle are also increasing their presence in Japan through new hires as the country emerges as one of the few bright spots for dealmaking.

Beyond Japan, industry experts whom CNBC spoke to noted that the hiring spree cuts across all regions. Southeast Asia and India also saw hiring pick up with new offices opening in Singapore and Mumbai,  Magellan Advisory Partners noted.

Despite policy uncertainties in Washington, overall hiring in North America has surpassed mid-2022 and 2023 levels, with many U.S. megafunds and growth equity firms interviewing first-year analysts for 2026 start dates.

“This reflects the reality that demand for top junior talent in North America is undiminished; firms fear missing out if they don’t engage in the recruiting race,” the executive search firm said in its report.

Europe’s private equity industry is also seeing stronger hiring momentum, underpinned by macroeconomic shifts such as the start of rate-cutting cycles. The Bank of England, for instance, has lowered rates five times since August last year, a move expected to fuel deal activity, exits, fundraising, and the broader private equity “flywheel,” said PitchBook’s Walters.

“International expansion is a common thread, with firms in the U.S. expanding into Asia and vice versa. Similarly, U.K. private equity firms often first target the U.S. before moving to Asia,” noted Chris Eldridge, Robert Walters’ CEO of North America, Ireland and U.K. recruitment.

Many of these firms have also started recruitment long in advance, even before potential employees are out of college, signaling a shift away from reactive hiring, he added.

There is, however, a divide between firms with scale and those with less ammunition to navigate the industry storms.

“I think there’s a clear bifurcation between the largest firms [that are multi-strategy], and have economies of scale that can afford to hire,” said Connors. “Whereas some of the smaller firms are struggling with fundraising…very much not hiring, really at all, and some of them are shrinking.” 

As large firms go on their hiring spree, some of them are even engaging in talent wars with investment banks.

Private equity firms have long cultivated a reputation for raiding Wall Street’s analyst pool, to the point where investment banks had to establish stronger boundaries recently.

In mid-2025, Goldman Sachs and JPMorgan reportedly introduced tough new rules to curb poaching by private equity firms. JPMorgan warned that analysts who accept future-dated job offers from private equity firms before completing 18 months would be terminated, while threatening to fire those who miss training for job interviews.

To retain talent, the bank shortened the analyst-to-associate track to 2.5 years from the current three years. Goldman, meanwhile, rolled out a quarterly “loyalty pledge,” requiring analysts to confirm they have no outside offers—though disclosure won’t trigger termination.

At the junior level, the traditional investment banking analyst pipeline is being disrupted by changes in early recruiting, said Jensen Partners’ Jensen.

“Banks like Goldman Sachs and J.P. Morgan are tightening mobility, and [private equity firms] are responding by building in-house training programs,” she said.

These moves suggest that the recruitment frenzy, where private equity firms lock in junior bankers years ahead, may become even more competitive.

Private equity careers may have an edge over investment banking because of carried interest — a share of fund profits that can far exceed annual pay and is taxed at lower capital-gains rates, Connors explained.

While junior pay looks similar in both industries, mid-levels like senior associates and vice presidents usually start receiving carried interest, he added. At senior levels, the difference is stark: a managing director might earn $1.5 million to $2 million in salary and bonus, but carried interest tied to fund performance could deliver $20 million to $30 million over time. 

“It’s a significant economic vehicle that lures talent to the space,” he said.”It’s an economic vehicle that just doesn’t exist in the investment banking world, and it doesn’t exist in traditional asset management. It’s unique to the private markets industry,” he said.