Private Credit Comp at Senior Level?
Hi all -
Had a quick question.
I’ve recently been approached by a small fund (think $200mm - $250mm), where the two founding principals are the only investment folks there. They’re speaking about bringing me in at a “senior level”, which I’ll take to mean as a Managing Director level with a path to partnership. The comp structure is base, bonus, and carried interest. What should my ask be (in a breakdown and total comp)?
My background: PE and HF for nearly a decade with a focus on special sits credit and equity.
Thanks in advance!
Based on the most helpful WSO content, here's what you need to know about compensation at the senior level in Private Credit:
Given your background and the size of the fund ($200mm - $250mm), you might consider the following breakdown for your ask:
Total compensation could therefore range from $750K to $1.6M+, heavily dependent on fund performance and the specifics of the carry arrangement.
Sources: PE Comp Question - VP / Principal Level, What is your compensation in Real Estate Finance?, Compensation Structure at the mid-management level in Corporate Development / Strategy / Finance, Q&A: Currently at a Credit Hedge Fund, The Truth Behind PE Compensation
Bump
Bump for the love of god can you people in private credit list out your comp for fucking once. And has 'carry' all been converted to stock upside in BDCs?
Bump
BUMP. You guys in private credit are not escaping this. I set a reminder on my phone. I know you all get off by 8PM so get to dropping the comps and the pros and cons. chop chop
CHOP CHOP
8pm? That’s when we’re at the 19th hole. More like 3pm.
Principal at MF PE shop in private credit -> 750k cash + 200K DAW + $50K stock (new daw granted each year)
How many years is your 'principal' after associate? Have seen some places that are straight asso-> principal and some with steps in between.
General comp progression and market rates would be amazing if you're able to provide input.
Also what is DAW
DAW = Dollars at work. If you have $200k DAW in a fund, you get the profits from the return that money generates (without being able to touch the principal).If the fund returns 50%, he gets $100k cash.
Is it standard in PC to grant DAW each year (vs. a fund-level DAW grant like in PE)?
I have gotten mine at the fund level. Based on pace of fundraising (many PC mangers invest out of multiple vehicles) this can result in annual grants (or potentially more frequent although that would be frenetic fundraising).
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