Private credit firms and banks competing for talent

In February this year, Blackstone announced a deal with Barclays to buy its outstanding credit card receivables and the pair entered into a “long-term strategic…arrangement”.

Just a few months later in May, Blackstone hired Tom Blouin, global co-head of leveraged finance at Barclays. And in August the asset manager brought in Matthew Humphrey, previously head of SRT structuring at the bank.

While private credit managers and banks are increasingly partnering up and working together – such as the partnership of Apollo and Citigroup – they are at the same time competing for talent.

“There is an interesting dynamic we haven’t seen before,” said Skye Lucas, senior vice president at Selby Jennings. “Some are teaming up and at the same time senior bankers are leaving those banks.”

Read: AlbaCore: Credit inflows accelerate despite yield declines

Also this year, Apollo hired Vivek Dasani, who was head of EU high yield trading at Barclays, after joining the bank from Citi. Meanwhile, AlbaCore hired Goldman Sachs’ head of EMEA credit finance capital markets Luke Gillam.

Unfortunately for banks, the talent exodus to private credit funds is not likely to stop any time soon. The private credit industry is set to continue its growth, and more and more people are finding it interesting.

“We placed a few people recently out of M&A teams at high quality banks, two or three years ago that would have been unheard of, they would have wanted private equity and not found credit work interesting,” said Andy Miller, a director at Dartmouth Partners.

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“But now I think it is inevitable that they will lose more and more talent. The view seems to be that private credit is going to become more commoditised. And the problem the banks have is that they can’t change the job and they never will be able to. They can maybe pay people more money or they can promote them quicker and give them different titles and sense of seniority.”