PE Associate Salary still >> IB Associate Salary??
New 1st yr analyst here. Long time lurker, first time poster.
With HH emails coming in, I can’t be the only one torn over whether or not to recruit for PE. I like the people at my firm, am in a great group, and wouldn’t mind staying in IB altho the idea of investing appeals to me. But like a lot of people on this forum, comp is also an important consideration to me.
So my question boils down to - are PE associate salaries still significantly higher than IB associate salaries (esp at EBs) given recent salary bumps in IB?? Any insight appreciated!
As far as I'm aware, PE is a short term pay cut compared to banking with the potential of a huge long term pay increase. You get paid less as an associate in PE compared to banking. However, if you move up the ranks to principal, VP, partner etc. and start getting carry, that's when you start beating out IB comp. Heard it can be tough to do though. Also usually need an MBA to move past associate level in PE whereas not required in banking. Feel free to correct me if I'm wrong on any of these
Accurate on the short term vs long-term pay front, plus 2021 comp is hardly a good benchmark given record deal flow.
Would say these days most PE firms are no longer requiring MBA to move up, and HHs/firms are always pretty open about where the firm stands on that in recruiting if that's a dealbreaker for you
Pe salaries have been less than IB for a long time, especially if comping to boutiques and top MM banks
I would caution against extrapolating from 2021 IBD comp. It’s a cyclical industry and last year was the peak — with the slowdown in deal activity and slack in the hiring market I’d expect comp to go down materially at all levels in banking. PE is way more sticky given committed capital / fee streams.
We already saw a lot of analyst get shafted this year on bonuses so don't be surprised if things stay stagnant for a while.
I am already rethinking returning full time bc doing this job for 155k all in is just not it at all if bonuses stagnate
Good point. PE f’’sho not cyclical at all. Fundraising not cyclical and returns not cyclical.
but yes 21 banking comp was high point
Dude pe firms make money in two streams. Management fees are fixed minimum commitment 10 year contracts with Aaa counterparties. That’s what your bonus and base comes from that as sticky as it gets. Carry had and always will be lumpy. Fundraising is in 4 year cycles. That’s why structurally outside of carry PE is a highly stable industry.
Associate 1 is at $320-350k in NY, £200-£240k in London in most cases to my understanding.
Lol this is MF comp only bro. UMM not paying AS1 in NYC at $350k
False - at a non-NY/non-SF UMM and offer was for right in that ballpark, friends at other UMMs have similar. UMM is very comparable to MF at this point
I love how people ignore how much harder it is to make Principal in PE vs VP/Director in IB
This.
Banking cumulative post tax income is likely going to be higher than PE equivalents until you are like 35.
MF PE/ some UMM PE comp might be in line with banking but this is an extremely small portion of the PE world. Consider the likelihood of an MBA, giving up carry when switching funds and chance of your fund not performing well in this new cycle and the case for staying in banking is strong for short - mid career earnings.
Can’t stress enough how short sighted it is to compare banking pay last year to PE pay long term.
PE is relatively consistent (in the short term) since you’re getting paid of management fees. Obviously long term headwinds can hurt this, but it’s not like one bad year means you get killed on comp.
Historically, 300-350k (current UMM/MF range) for a banking associate would’ve been insane. That changed last year obviously, but check back in 6 months and I bet the associate bonus thread is looking just like the analyst one is now with a lot of disappointment
theres old threads pre 2008 where IB associates were making like 500-600k all in lol
I checked old resources and there is no thread with clear summary of Associate 0/1 salaries in IB in London. Unfortunately the traditional Arkesden Compensation Report seems delayed this year.
As many of us I believe are currently evaluating the possibility to move to the buyside, why don't we start gathering data in this thread to help users?
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