Private equity professionals on $683k latest to lose their jobs
Private equity jobs are supposed to be secure compared to jobs elsewhere in the financial services industry. Recent events pertaining to SoftBank's Vision Funds suggest this may no longer hold.
The Financial Times reported yesterday that SoftBank has made the decision to cut 150 of 500 staff at the Vision Funds, 30% of the total. The cuts follow the erasure of many of the two funds' gains as technology stock valuations plummet, and the exit of former and frequently barefoot CEO Rajeev Misra, along with the ex-Deutsche Bank people he hired.
SoftBank doesn't say how much it pays staff at the Vision Funds globally, but it does say how much it pays staff at SB Investment Advisors (UK) Ltd, the UK head office of the two funds. In the 12 months to March 31st 2021, the fund paid its 179 UK staff a total of $122m, an average of $683k per head.
This was pretty generous considering the same operation made a loss of $140m over the same period. The $14m earned by the highest paid employee (presumably Rajeev) looks more generous still. Maybe SoftBank thought he deserved it for cutting the loss from $230m the previous year?
Either way, it's a sign that private-equity-jobs-safe supposition doesn't necessarily hold. And it could be an indication of things to come, particularly in London, with investors reportedly getting cold feet about investing in the UK economy after events of the past week.
It's possible that at a moment when many banks are probably wondering why they're paying their junior bankers quite so much, private equity funds are going to decide they don't want them either. Equally, banking juniors might want to take a long look at the sort of fund they're getting into - many of the Vision Funds' juniors joined from consulting firms or investment banks like Nomura, JPMorgan and Goldman Sachs. They could have been better off staying where they were, or joining an energy infrastructure fund instead.
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