Is Hiring Engineers Hard for Private Equity Firms?

Michael Lee says recruiting world-class engineers to come work at a private equity firm is really difficult. A typical private equity firm has designed itself to celebrate the investor. Great engineers want to be in the room when decisions are made and want a say in whether a business is good or bad. A 25-year-old engineer with any say in the investment profile at a typical large-cap buyout firm would be highly unusual.

A prior job at Apollo left a lot of admiration for the big private equity firms, which will continue to do great. A typical firm sits in a fund structure whose economics incentivize deploying capital: find great assets, price them attractively, put the right capital structure in place, and do enough value creation to generate the required rate of return for the LP base. The business he runs looks for world-class organizations run by exceptional people and takes an extremely long-term horizon to forge the market leader.

Private equity firms are incentivized and have the resources and the capabilities to make meaningful progress on radical AI transformation, and many will make a lot of progress. Recruiting world-class engineers is one limitation they run into, and many will find ways to solve parts of the limitations.