No Map, No Pool: Private Credit's Toughest Hires
Even in the context of private credit’s remarkable growth, there are outliers, pockets of innovation attracting disproportionate investor attention (and capital). Credit secondaries, asset-based lending and a range of “GP solutions” are in considerable demand, but the leadership talent pool is yet to catch up.
GPs can’t afford to stand still, but overcoming this challenge is easier said than done and managers will need to get creative to be successful…
THIN POOLS, HIGH STAKES
The challenge with hiring for innovative strategies in private credit is not that the roles are unattractive. Whilst newer areas of any market carry with them some additional risk factors, the “white space” and underlying growth of ABL, for example, are characteristics that can draw in the very best candidates. The problem is that, relative to the size of the opportunity and the market need chasing it, the candidate pools can be genuinely tiny. According to Jeffries, credit secondaries almost doubled in volume from 2023 to 2024 (from $6B to $10B) and the firm forecasts this particular “niche” to grow to more than $40B by 2027. Contrast this with the very small number of professionals who have spent meaningful time building and running a credit secondaries strategy.
Asset-based lending is experiencing a similar dynamic: In late 2024, Preqin found that 58% of investors were prioritising ABL strategies and nothing drives fund launches better than data like this. Conversely, nothing puts the brakes on quite like realising that the incumbent team lacks the necessary collateral underwriting experience and origination network.
Insurance-linked credit is another hot theme, but the practitioners who truly understand both the asset management and the insurance/regulatory side are scarce and in extremely high demand.
When I talk to my clients about hiring for these and similar strategies, the conversations often follow a predictable pattern:
The client describes exactly who they want.
I describe the market as it actually is.
There is a long pause.
We talk about options…
THE ADJACENCY MAP
If a genuine specialist truly does not exist, the next step is to identify the strongest adjacent pool and be deliberate about what is and is not transferable.
For asset-based lending, the natural adjacencies are direct lending, leveraged finance and, to a lesser extent, commercial banking. Candidates from these backgrounds understand credit underwriting at the business level, covenants and sponsor dynamics. Collateral underwriting expertise is more challenging: It very much depends on the specific sector and type of asset in play. There are, of course, some high-quality leaders in the slightly broader ABF space, but leaning into the asset specialization may bear richer fruit. Someone who knows how to price the risk around IP or media receivables can apply this expertise to similar assets within a strictly ABL context.
For credit secondaries, primary private credit professionals are the obvious starting point. They understand the underlying assets, can underwrite portfolio-level risk and speak the language of the strategy. GP-led deal structuring can be a gap, but it is navigable. Some private equity secondaries executives will also have what it takes, even if their native credit experience is more tangential or peripheral.
GP solutions (including NAV lending and continuation vehicles) draw from a wider adjacency pool: Structured finance and leverage finance can produce strong leadership candidates with relevant instincts. The challenge here is less about technical skill and more about the specific commercial judgment required to navigate GP relationships and complex capital structures simultaneously. Those in team leadership roles at bulge bracket IBs will typically take this in their stride, but the change in environment might unsettle some.
For insurance-linked credit, the most effective hires I have seen come from one of two directions: Asset management professionals who have spent time on insurance mandates, or insurance company professionals with investment and regulatory fluency. Rarely do you find a person with both primary experiences and, if you do, they tend to be extremely expensive.
COACHABILITY
When the exact hire is not available, the question shifts from 'who has done this?' to 'who can learn it?' That is a harder question to answer, and it is the one where most firms make mistakes, either by setting the bar too low (hiring someone who looks the part but lacks the intellectual horsepower) or too high (waiting for a candidate who does not exist).
In my experience, the candidates who succeed in stretch roles in innovative strategies tend to share four characteristics:
Intellectual curiosity combined with commercial intuition. They want to understand how things work, not just in theory, and they instinctively ask the material questions about even the most technical aspects.
Comfort with ambiguity. These strategies lack established playbooks. Candidates who need a clear brief and a settled process will struggle.
A builder mentality. The best hires for frontier strategies are people who are genuinely energized by white space and the idea of creating something, not just executing within something that already exists.
Credibility and compsure under scrutiny. In a niche strategy, candidates less able to demonstrate exact strategy-specific experience in their career history will be tested hard by LPs and counterparties (and, for that matter, subordinates and other colleagues). They need to be able to convincingly link their journey to the challenge at hand, remaining honest about the gaps, but without getting defensive.
COMPENSATING FOR THE RISK
If you are asking someone currently in a leadership position to take a career step into a strategy they have not worked in directly, the economics need to reflect the risk. A market-rate salary with a discretionary bonus is not sufficient. Carry is expected and GP equity, where possible, is what really moves the needle. I have seen candidates accept roles at meaningfully lower base salaries when GP equity was on the table.
Beyond economics, the proposition needs to offer genuine scope. These candidates are being asked to build something. They need to know that the mandate is real: Is the firm committed to the strategy? Will they have the resources and autonomy to execute? Is leadership realistic about the time horizon involved?
One final consideration: Seniority. Firms often obsess over seniority, on the assumption that experience can compensate for weaker adjacency. That logic holds up to a point, but it is worth asking whether a slightly more junior hire, with stronger adjacency to the target skill set and perhaps greater appetite for the challenge, might ultimately deliver more. I have seen this work well: The candidate grows into the role faster than expected, and in 12 months, they are exactly the specialist the firm originally thought it needed. If you can tread water for a year, this approach could be the right one.
FINAL THOUGHT
Private credit's innovative strategies are attracting capital faster than they can produce experienced leadership talent. That gap will close but not on a timeline that helps firms hiring today. The firms that navigate this well will be the ones willing to reframe the question: not 'who has done this?' but 'who can?'.