The Apollo chart suggesting private credit will eat banking jobs
Pity the debt capital markets (DCM) bankers. Pity the syndicated loan specialists. Pity the commercial bankers. - Private credit funds are coming for their jobs.
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Bloomberg reported today that Australian bank Macquarie is closing its US DCM team and doing away with the 80 jobs there. Some people will be redeployed. Many will, presumably, not. Bloomberg says Macquarie's US business was mostly focused on leveraged finance and distribution. Not so long ago, it was hiring. But now Macquarie is all about private credit instead.
As the private credit business booms, the fate of the Macquarie 80 may come to symbolize the fates of others in the historic business of raising and selling corporate debt. Not only are private credit funds crowding them out, they are doing so with very few people.
The chart below from Apollo's Outlook for Private Markets illustrates how few. Although it's only a partial picture of the private credit market and although the firms listed (Apollo, Blackstone, KKR and Carlyle) operate in private equity and infrastructure as well as private credit, the point is clear: commercial banks employ a lot of people; private capital funds really do not.
Source: Apollo
Headhunters and DCM professionals also observe that private capital and private credit are consuming banking jobs, although maybe not to the extent the chart above suggests they might.
"It's only the smaller DCM platforms that are struggling," says one senior headhunter in the space. In a world where big banks and private credit funds are competing for business, he says banks like Macquarie are being squeezed in regions where their foothold is tenuous.
As private credit grows and extends into riskier debt along with credit cards and supply chain finance, this may become more of an issue. Ares Management Corporation, for example, has $484bn of assets under management but employs only 3,100 people. Last year it paid them an average of $559k each.
"Private credit funds hire very few people annually," observes the headhunter. Private credit headhunter Richard Risch estimates that there were around 2,000 job moves in the space in 2023 and slightly more than this in 2024.
To get one of these rare roles, DCM bankers may want to rebrand their CVs. Not all are convinced it's necessary, yet. "Private credit is sexy, but a handful of private credit firms won't disrupt mainstream bond markets," says one MD. Colleagues need to hope he's right. Macquarie's US DCM bankers suggest otherwise.
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