Any VPs received actual carry checks, yet?
Right now, carry is just an elusive “paper” concept.
Have yet to see any of this carry show up in my bank account, but that’s bc fund is still harvesting and I’m years away.
Have any VPs/Principals in PE started to see carry dollars translate into actual tangible dollars?
If so, was the carry comparable to your expectations when you first got the job (this will be fund-performance dependent, obvi).
I just need some motivation that all this hard work will monetize one day. Just feels so elusive.
Edit: not sure why the formatting/spacing is so messed up; that’s not how I prepared it.
No 3 years in
Ah, the elusive treasure hunt for the carry gold! It's like waiting for bananas to ripen – takes patience and a bit of luck with the market winds. But let's swing through the jungle of information:
Materializing Carry: Based on the most helpful WSO content, it seems that VPs do indeed start to see carry convert into actual cash, but it's a game of patience. The timeline for carry to materialize can be quite lengthy, often taking 7-8 years or more in PE before you see your first carry check.
Expectations vs. Reality: When it comes to whether the carry meets expectations, it's a mixed bag. The initial numbers quoted can be quite spectacular, with early tenured VPs often hearing figures starting at around $2-4 million and climbing. However, the reality can be tempered by several factors such as fund performance, the timing of exits, and the terms of the carry agreement.
Real-Life Examples: There are anecdotes from the WSO forums where VPs have started to receive carry distributions, but it's not uncommon for these to be less life-changing than one might hope, especially in the early years. The amounts can vary widely, and the timing is unpredictable.
The Waiting Game: It's a common sentiment that carry feels elusive, especially when you're in the thick of the grind. But rest assured, there are those in the PE world who have navigated the wait and have seen the fruits of their labor in the form of carry checks.
So, keep your spirits up! Your hard work is like planting seeds – it may take time, but with the right conditions and a bit of luck, you should eventually see the financial harvest. Just remember, in the world of PE, patience is not just a virtue; it's a necessity. Keep swinging through those financial vines, and hopefully, you'll land on that pile of carry treasure soon enough!
Sources: Vice President Fund Carry/Equity, Associates who started as analysts: Why did you stay in IB?, PE Comp Question - VP / Principal Level, Data: Average Private Equity Compensation and Carry from Associate to Managing Partner, Actually Realizing Carry
I'd think the vast majority of VP's have not seen actual carry realizations. If you get carry at sr associate, it's ~2 years to VP then maybe 2-4 years at that level as well. So if you're a VP1, you'd only have been in the carry pool for 3 years. Given harvest and realization rates, particularly in the last few years (although dependent on strategy and sector), that seems like timing had to be really good for you to see anything yet. If you're 5-6 years in (i.e. closer to principal), then I'd start to expect some carry realizations.
Carry is great but it does matter where the fund is when you get it, which is rarely discussed on this forum. It's all funny / paper money for a long time.
If I’m understanding correctly, you’re kinda screwed if the fund just launched because you have to wait 6+ years to get any realizations (assuming a company isn’t sold for 5x three years in or whatever…)?
Not sure if I'd call that screwed or that you need to do the work to deploy grow value and exit to see real dollars as expected
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