Average compensation (base + bonuses) in PE for analysts, associates, etc
Hey all, I at first wanted to stay in IB long term because I’m honestly just sick of recruiting but I heard that with carry, working in PE pays a lot more per hour. With that being said, what is the average pay for an analyst? After how many years would this analyst be promoted to an associate? What is the pay here? What comes after associate and how much do you pay/how long do you work at this level before the next promotion?
Sorry for the nooby question, but it seems like IB has had a lot of promotions to base comps recently and am wondering if its worth to go through recruitment again and switch over to PE after IB…
I was in the same boat and at the end of the day, it’s simply money vs long term career. If u purely want the money, IB junior level is the way to go; pe bulk $$ only kicks in past VP and sometimes principle level w carry so that’s a long-term career thing. IB will work u to the bone but money is ok given recent bump (tho inflation is creeping in)
Not so accurate data but heard from distant connections that BX paid ~120k first year pe analyst again only thru reference
I think ur bx # is just base. The firm is very bonus heavy. Base is 110 + 10 signing.
Whats the typical bonus at BX for PE analysts? Recall 150k all in comp floating around here back when their base was 90k I believe so roughly 60k bonus?
Do some searching on here, the general consensus is that in the short run, banking pay will almost always outpace PE, especially now with the recent bumps to banking salary across the board. PE pay at the junior levels might be in line at the very top shops, so the MFs and the UMM funds, but a good MM fund vs doing an A2A in banking and banking will almost always come out ahead.
The pros to PE are that the work has the potential to be more interesting, the lifestyle could also be better, and the longterm compensation can be higher. With that said, none of those things are guarantees and it's very much firm dependent and how your fund performs. I've heard stories of folks that have gone to growing MM funds, have gotten carry early, been responsible for the end to end on deals, and haven't worked crazy hours, outside of last minute deal stuff of course. The result could be good comp ~$500k or so in cash at the VP level, and a few million of dollars in carry at work that will only increase as the fund continues to raise funds, and a pretty consistent work life balance where, most of the time, you can set your own hours. That's not to say you're not working hard, but it might be a flexible ~50-60 hours a week, opposed to a chaotic 70-80. On the other hand, you have folks that go to small shops that are run by former PE execs who are slave drivers, so all the sudden the lean teams are being forced to run processes on every deal under the sun, putting in lowball valuations that will never get accepted. The comp is low, there is no carry, and the fund is going to struggle to raise new funds, meaning there isn't much advancement or experience gained.
The safe bet is banking if you can live with the lifestyle. It's an almost guaranteed path to get to a very high earning job. PE is riskier, but if you can do a good job in it, PE could make you tens if not hundreds of millions of dollars in a relatively short amount of time whereas banking you will never have that upside. Depends on what you want. PE is lower floor, higher ceiling, banking is higher floor lower ceiling. There are obviously generalizations, but you get the gist.
Edit: Given this has gotten a decent amount of upvotes, I'll give an example of the "PE Dream". This is from a guy that started his own fund and one of the mid-level people he brought on. MP started his own small industry focused fund right around 2010. Had some prior PE experience, but nothing that special, but was able to raise a $25M fund as a proof of concept. Did a couple of good small deals, and raised bigger subsequent funds, every couple of years. Fund is now over a billion in AUM and that MP has made hundreds of millions in carry dollars. Fund is by no means a household name, but folks with carry can make out extremely well even on small deals. The funds have performed amazingly, but even with average performance, he still would have done great. About halfway through the tenure of the fund, he brought in a VP who worked on a couple of the big deals for the fund. This guy didn't source them, didn't do anything that amazing, just got good timing, ran the deals effectively, and got decent carry given the size of the fund at the time of joining. Now that person is a partner given the fact that they led the biggest and most successful deals the firm has seen and that they've been there almost since inception. The carry they got in those deals is easily worth $10M, and they're now getting partner level carry in the "big" funds the firm is raising. The GP took a huge risk in starting a new fund, so that person making a ton of money makes sense, but the person who joined really wasn't that exceptional. The WLB was tough during deals, but nothing crazy otherwise and now that VP turned partner has outpaced anything that could be made in banking, has a better lifestyle, and frankly could probably retire now, if not after another fund or two. That could just never happen in banking. That's kind of the reason folks take a risk on PE after a couple of years in banking, worst case you can always go back.
No one’s going back to banking let’s be honest
So true. I’ve never seen or heard of anyone willingly going back into banking. It’s usually someone that basically didn’t get the post-MBA promote. It would be difficult to find someone at the VP or above level that made the transition back.
"On the other hand, you have folks that go to small shops that are run by former PE execs who are slave drivers, so all the sudden the lean teams are being forced to run processes on every deal under the sun, putting in lowball valuations that will never get accepted. The comp is low, there is no carry, and the fund is going to struggle to raise new funds, meaning there isn't much advancement or experience gained."
What happens if you end up here? How do you vet to not end up here if the fund is small or brand new? Can you spin the wheel on LMM PE funds every year until you land at one that fits? If not, does it simply come down to getting lucky on 2-3 laterals in the space, after which you're sort of stuck? How do you also make sure you don't get fucked out of being rewarded for partaking in and helping administer a firm's growth?
It's tough to imagine most scenarios where an MP screws over someone they've pulled along just to save $x amount more for themselves but then you see threads like the one posted a couple of months ago by a PE principal saying he was screwed out of a $1mm carry check last minute. I recently left LMM PE to go back to IB not because life at the PE firm sucked but because I became paranoid about being screwed over in the future when the time for the real payouts came. I also questioned whether I would still have the stomach for some of those deal sprints when my wife and I decide to have kids and responsibilities mount, and thus rather than take the long-term lane on weak faith, I went back to IB. IB sucks though and I don't want to be here long-term either but I figured until I know what I want long-term, I'll play on the field that pays more today. I do miss the work and smaller team dynamics of LMM PE like crazy, though.
I just took a role as a PE analyst at a small family office in my tier 2 city. My comp is $80k base + $20k bonus, so $100k all in.
While it sounds low, I’ll be working 40-45 hour weeks so it sort of evens out.
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