Why private credit represents the hottest market right now
Compensation in the private credit sector is climbing sharply as firms compete for top talent in New York and London, particularly in structured finance and asset-based lending.
A report from credit industry recruitment firm RCQ Associates reveals that average pay hikes for professionals switching firms reached 21% in 2024. Those who remained in their positions still saw a 16% increase in overall compensation, with bonuses playing a significant role in the rise.
“This sector, and in particular asset-backed finance, has the fastest growing compensation levels within credit,” said Edward James, RCQ’s founding director, in a statement to Bloomberg.
The demand is especially high for vice presidents, according to an RCQ note shared with clients. However, external hiring at the junior analyst and associate levels has declined.
In the United States, a managing director at a private credit firm typically earns between $1 million and $2 million annually, with an added share of profits - known as carried interest - ranging from 3% to 15%. In London, the equivalent position pays between £600,000 ($760,000) and £1.5 million.
Asset-based lending has emerged as a key driver of hiring activity, Bloomberg noted. The sector is expected to grow substantially, with the market projected to reach $1.3 trillion by 2030, up from $625 billion in 2023, according to estimates from consultancy firm Maximize Market Research.
Several major players in the field have made significant hires in asset-based finance. Oaktree Capital Management has expanded its team with professionals from Atalaya Capital Management, Waterfall Asset Management, and Goldman Sachs Asset Management. Additionally, Point72 Asset Management has strengthened its asset-based investments division by appointing Todd Hirsch, formerly of Blackstone Inc., as head of private capital.
Other areas of anticipated growth include collateralized loan obligations and commercial mortgage-backed securities. Significant risk transfer hiring has been particularly strong in London and is expected to remain elevated, according to RCQ’s analysis.
The recruitment firm’s data was based on 113 job moves in the past year for which salary details were available, James noted.
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