Hire Wire Sep 29 2011

Private Equity Hiring for Compliance Jobs

By julie steinberg

In one bright spot of finance hiring, private equity firms say they are hiring compliance officers to meet new registration requirements at the U.S. Securities and Exchange Commission.

Under The Dodd-Frank Act, the financial reform bill that was signed into law in July 2010, private equity firms with more than $150 million in assets under management are required to register with the SEC and maintain records for each fund they manage. The SEC pushed back the deadline for registration from July 21, 2011 to March 30, 2012, giving firms more time to hire, said experts at the Dow Jones Private Equity Analyst Conference in New York.

Related: How to Get a Job in Compliance

A compliance officer is responsible for ensuring that the firm is abiding by regulatory requirements. At a private equity firm, he or she helps with SEC registration, maintains records for review by the government and drafts a compliance manual for the firm. Chief compliance officers can come from legal or finance backgrounds and tend to have at least five to seven years of experience, recruiters say.

"There are plenty of opportunities in compliance right now, and there will be plenty more once registration for private fund advisers becomes effective in March 2012," said Paula Bosco, the chief compliance officer at New Mountain Capital, a New York-based private equity firm with more than $8.5 billion in assets under management.

After firms register, they'll have to record the number of assets under management, type of assets held and counterparty risk exposure for each fund they manage.

Hundreds of firms or more still have to register, according to Jason Ment, chief compliance officer at StepStone Group LLC, a private equity firm overseeing over $30 billion dollars of private equity allocations, including $7.6 billion assets under management.

Firms can find compliance officers both inside and outside their ranks. Some firms manage by making their chief financial officers or legal counsel assume the position of chief compliance officer, said Bosco.

John Malfettone, a panelist and senior managing director at New York-based private equity firm Clayton, Dubilier & Rice who oversees compliance, said firms with between $150 million and $4 billion in assets under management will probably make compliance a part-time endeavor of the chief operating officer, for example.

Or firms can add a compliance officer to their staff. Fisher Lynch Capital, a San Mateo, California-based boutique private equity firm, recently hired a full-time chief compliance officer to help with the new regulations, said Debbie Richard, the firm's chief financial officer.

If firms don't want to add a person in-house, they can hire a compliance consultant like ACA Compliance Group or Counselworks, which provide compliance help on retainer, said Ment of StepStone Group. The consultant will draft the compliance manual, code of ethics, set up record-keeping, and work as a shadow to the chief compliance officer.

Ment said these firms have been ramping up hiring for compliance professionals over the past 18 months as a result of Dodd-Frank and that employment opportunities will continue to be available over the coming months. He hired a vice president of legal and compliance earlier this year who had a law degree and some compliance experience.

The best way to find a job is through existing personal connections, Ment said. "The resume alone can't convince someone of your judgment, so having a personal relationship with the person helps and becomes important," he said.

Lawyers who want to become compliance officers should know that the interviews don't resemble those at a law firm. "A lot of law firm interviews are largely personality interviews, the skill set almost being assumed based on your years of service at a firm," he said. "When interviewing at an investment firm, I don't think skill set is presumed. Be prepared to speak about how well you can do the job and why. Also, have a view on industry trends and things in the news are affecting the industry."

When Ment was interviewing candidates for his firm, he noted that the applicants who didn't have a view on industry trends came across as lacking the right perspective for the job.

Write to Julie Steinberg at Julie.Steinberg@dowjones.com




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