Comp expectations in small fund
Just wanted to do a sense check on comp expectations.
Work in a small hybrid firm where we invest our firm capital and advise some clients on deals. Did very well for ourselves this year, should do about 2-3x MOIC on our investments, should realise about 5-10m this year. Small firm, Investment team is only my boss and I.
Boss has said that he will share some of the profits with me but no numbers thrown yet. Base is relatively low think 40% below market, but had mentioned that bonus would be good if we do well.
How much would one expect given the situation? I’m hoping for 200-300k bonus here, would be happy if I get that.
Bump
Based on the most helpful WSO content, here are some insights on compensation expectations in a small fund:
Base Salary:
Bonus and Profit Sharing:
Comparable Scenarios:
Negotiation and Expectations:
In summary, while your base salary is lower, the bonus should be substantial given the firm's performance. It’s advisable to have a discussion with your boss to set clear expectations and understand the profit-sharing structure.
Sources: What is reasonable comp for an Associate at a Fundless Sponsor doing deals at $50m-$500m+ EV?, Is this associate compensation competitive?, What I've Learned About Hedge Fund Structure and Compensation, Unpredictability of PE is Killing Me, base/bonus 1st year analyst at HF
Cheap base means you’ll likely get a cheap bonus … why are you asking this thread? Can you not just talk to your boss?
Yeah I did so he said that I’ll get a great bonus, didn’t of course tell me an amount here or any formula. So was wondering what’s a normal expectations here.
Understand that normal team splits are 70% to the boss and 30% to the team. But of course probably not expecting that. What would an analyst expect here, a third of the the normal 30%? No LPs and all the capital is from him.
I'd just ask about carry. Smaller funds if what your boss saying is the truth the entirety of your comp upside will be in carry
Yeah but the thing is initial capital was all his. It’s a capital constrained strat that I doubt we can repeat next year. So I guess I should just ask for 10-20% of current year PnL?
Who cares? If your boss skimps on bonus then just leave for a bigger fund. No need to fret about something out of your control. Play your hand to the best of your abilities, so if he screws you over then leave which will impact him.
Fair point, control the controlables. Just wanted to have a benchmark to know if I was screwed over or not.
Ask yourself how valuable you actually are (be honest). How stingy is your boss with his OWN money. How much does he like you. You should be able to come up with a far more accurate # than anyone on here. Consider his incentives and how they will likely play out. If his money performed much better than average are you replaceable? He could just fuck you over on bonus and replace you to keep more $$$. If I were in his position, I didn’t love you, and you were replaceable I’d probably do that tbf. You’d just be too expensive to maintain the relationship.
That’s true, I’m probably hopping for a 200-300k bonus, would probably be super happy with that. Boss seems to be pretty generous so far so fingers crossed.
gl with that bonus bro as everyone else mentioned if he's not paying you what you're worth someone else will
You're already working there, right? What's done is done. You can't even jump to a different company cause they'll ask you for your comp expectations and you don't even know. You can keep pestering your boss again for a number, but you said you've already done that and he won't say.
Nothing you can do now except just hope for the best, wait till bonuses are announced. That's only another 6 months or so. You'll have your answer then.
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