First and foremost, there is an increasing emphasis on portfolio company level capital deployment across infrastructure and energy transition verticals. Examples of this can be seen all around the industry like in January, when DigitalBridge’s portfolio company Landmark Dividend brought on Thomas Hill to lead Data Center acquisitions across the US and Canada. This was a very competitive process and appealing opportunity that attracted the candidacies of private equity and investment banking professionals alongside those already in the data center industry.
In addition to the achievement and expansion of commercialization, the rise in portfolio company-level capital deployment is also caused by the growing importance of ESG investing, the increasing size and complexity of deals, and several other factors. As portfolio companies secure investments from private markets funds, the need for professionals with the skills and experience to help manage and grow these businesses through investments, structuring and capital markets becomes urgent. This level of direct impact on the business becomes very compelling to the talent market for these roles. There is a portion of investment professionals who believe that by focusing on a specific portfolio company, rather than being spread across multiple companies at the fund level, they can make a concentrated and meaningful difference. Seasoned individuals often assume positions such as Chief Investment Officer or Strategic Chief Financial Officer, where they can leverage their expertise to drive the growth of a single business.
Another prominent reason for this trend and a draw factor for opportunities at various portfolio companies, is location. Time and again, we come across stories of talented candidates who recognize the perfect opportunity for their career growth, only to find that the location doesn’t align with their personal circumstances or the needs of their family. Conversely, we have also encountered situations where candidates are currently residing in one city but are actively seeking new employment to facilitate a move to another location. This relocation aspect has been a significant motivator for investment professionals in the past year, as they are willing to leave their current financial services firms and transition into portfolio company roles, often accepting lower cash compensation, yet still having significant equity upside. Despite the potential and often decrease in pay, these professionals recognize the value of utilizing their similar skill sets in a new firm that caters to their personal location needs.
As this trend continues to gain traction, it is essential for organizations and professionals to understand the opportunities and implications it presents. By embracing the shift and understanding its drivers, firms, and investment, professionals can position themselves for success within the evolving landscape of Infrastructure and Energy Transition private markets.