Private Credit expansion is driving huge wage inflation in London

Middle office salaries in London are out of control – the structural credit market shift towards Private markets has exacerbated a market that was already in short supply pre COVID. 

With data-entry roles in banks, and middle offices commanding as much as £90,000, firms should be looking to automation to protect and scale their operations.

Private Credit eating the Banks’ lunch 

What is “private credit” and how does it relate to a normal bank loan? Private credit is a term used to describe a corporate loan from a non-bank lender. Companies use private credit because non-bank lenders offer more flexible, attractive terms to borrowers.

Typically, if you don’t fit a bank’s lending criteria exactly – the computer says no! 

This demand for more flexible capital has unsurprisingly skyrocketed in recent years, there are now over 550 Private credit funds in Europe alone. 

Short Squeeze 

Anyone who has read our previous blogs will know that one of the reasons loans take 74 days to settle is because post-trade settlements currently benefit from very little automation and all this heavy lifting has to be done manually. 

So, with the number of lending funds on the up, the market for staff who can close these transactions is now in very short supply.

Why? Well, every time a Private credit fund springs up where do the fund managers go hunting for staff?

Banks and other fund managers of course! The post-trade market is now suffering from a huge knowledge deficit and chronic wage inflation. Firms are now having to pay 40% higher than they were pre COVID to replace experienced staff with much more junior ones. 

Automation of workflow

Until now firms have been left with very little choice but to pay up or lose the ability to close and settle loan transactions for their clients.

LedgerComm provides a connected, fully automated platform that can remove key man risk, help you scale your business efficiently, and be less dependent on inflationary labour market forces. 

Contact us to see how our solution can de-risk and bring automation to your organization.

Further reading:
UK recruiter warns of wage inflation during fierce battle for staff:
https://www.ft.com/content/11b8981a-f9e5-4d6f-9bb6-ff5c21d95a01

Want a 19% Pay Boost? Get a New Job:
https://www.bloomberg.com/news/articles/2022-01-17/london-bankers-changing-jobs-got-19-pay-boost-in-fourth-quarter