When Keith Brittain was starting out, buying secondhand shares in private funds was considered a niche investment strategy.
“I started at Hamilton Lane in 2010 and came from 10 years of investment banking, and until I started talking to the team here about the role, frankly, back then I didn’t know much about the secondary market at all,” Brittain, cohead of Hamilton Lane’s secondary business, told Business Insider.
Today, the practice of buying stakes in private funds from investors who want to sell early is on the lips of the biggest names in private equity as “secondaries” fundraising reaches record levels.
According to Michael Arougheti, CEO of Ares, secondaries “are significant beneficiaries of a slowdown” in the economy. Blackstone president Jon Gray said secondaries’ ability to provide liquidity “will be seen as attractive” in an environment where it will be hard to exit deals.
As the industry evolves from a curiosity to a destination, a lucrative career path is emerging. We spoke to recruiters and industry experts to understand the paths to a career in secondaries, as well as its perks.
They said they see more job opportunities opening up as megafunds, like Apollo, launch inaugural funds, and industry veterans launch new shops — as Vincent Gombault, cofounder of Ardian, did with Clipway in 2023.
“Other than fundraising, the primary thing that could hold the industry back is talent,” said Brittain. “We need more great talent.”
Candidates, however, could soon see more competition as the industry’s reputation appears to be luring new applicants. “We are now seeing interest from college students and people who currently work at buyout firms,” said Matt Roche, a partner at StepStone, a private markets investor with $179 billion in assets.
The payoff, he added, could be big for those who make it, including an improved chance at becoming a partner, the holy grail of the financial world.
“Even the most pessimistic participants in the secondary market expect this to be one of the highest growth parts of all private equity and just alternatives generally,” Roche said.
Starting your career
The most common path to a job in secondaries is to start from the bottom. Like with other private equity jobs, this often means first doing a stint as an investment banking analyst because banks are a common hunting ground for private equity recruiters.
“What we keep hearing from our clients is that their preferred profile for associate hiring is an investment banking analyst, regardless of their specialty,” said Alix Connors, Principal at Opus Advisors, a recruiting firm that’s long recruited for the secondaries investors. “They want bankers with active deal flow experience and strong technical skills.”
Roche joined StepStone as an analyst fresh out of undergrad.
“We hire analysts, test them for a couple of years, and then keep them as associates,” Roche said. Other shops, like Hamilton Lane and Blackstone’s Strategic Partners, also hire analysts out of college into their secondaries businesses as part of their larger analyst hiring programs, providing an even more direct path into the industry.
And while investment banking backgrounds are the most common, candidates with other profiles have broken in.
Brittain said that people who have worked in accounting, corporate development, or jobs evaluating companies have also found roles as secondaries investors. And increasingly, StepStone is hiring people who left buyout roles to try their hands at secondaries.
Seniors and specialists
Hilary Hurley, managing director at Amity Search Partners, said career paths at the mid-level are similar to those of typical private equity investors.
“They either did junior-level banking or went to the buyout world,” Hurley said. “It is that same kind of traditional banker experience.”‘
The exact formula for the perfect candidate differs depending on the firm and strategy.
Hurley said roles focused on deals involving private equity firms looking to sell a portfolio company to a new fund with new investors, also known as a GP-led deal, will “often target” candidates with experience as direct buyout investors.
“This is because GP-led deals often require understanding the intricacies of the underlying assets and portfolio companies,” Hurley said.
Of course, as one gets further up the chain, having real secondary experience becomes increasingly essential. At minimum, you will need solid buyout investing experience and all of the technical skills that it brings.
It’s one reason many of the largest firms focus on promoting and developing in-house talent.
Opportunities for new senior roles “come up every so often,” said Hurley, such as when a new firm launches or an established firm launches a secondaries business line.
Growing demand for the secondaries market has also increased roles that support deal flow, like lawyers, Steven Siesser, chair of the private equity practice and cochair of the transactions and advisory practice, at Lowenstein Sandler LLP said.
“We have teams that do nothing but secondaries now,” Siesser said. “There are transactional lawyers who spend their days buying and selling interests in GPs and LPs, it’s become a cottage industry.”
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Career considerations and the path to partner
The quality of candidates, and therefore competition over open roles, is at an all-time high.
“Candidates seem so much more familiar with secondaries,” Connors said. “They have done their research and have more conviction in this asset class and building a career here as an investor.”
Benefits tend to include more consistent hours, and pay has largely caught up to the rest of the industry. For those taking the long view, the industry’s growth could also improve one’s chances of making partner.
According to Brittain, just one to two percent of the total value of the private investment world trades in the secondary markets — leaving plenty of room for growth
“When you make new partners, they need to have a reason to exist, and the pie has to grow to make that path work,” Roche said. “As long as that pie is consistently growing, you can have pieces of that pie for everyone.”
