I recently received a job offer that would be a slight cut in pay. I currently make:
First-Year IB Associate Salary: $120,000 Bonus: 75-100% Other Benefits: Flexible expense report Other: Discussion of a promotion at the end of this year
I received the following offer from a PE fund: Base Salary: $100,000 Bonus: 50%-75% of base Carried Interest: 3-5% in the next fund (conservatively a $200M fund w/ fundraising 2 years) Other Benefits: 6% 401k match and 4.5% profit share (current employer doesn't have match but has a 3% profit share)
The hours would be much more predictable with a work life balance. Also, this is only the second fund and hasn't really been marketed. I would come in as the lead for this fund. It is an interesting dynamic where they haven't had an industry expert. The team is very laid back and we have a very good gel every time I sit down and meet with them.
Could someone help my sanity of taking the pay cut? I continue to revert back to taking less salary and how it will impact my monthly spending. However, I believe this offer will provide more upside and less stress over the long-term.
Really the only question that matters; was the previous vintage successful?
If previous fund was successful and they offer you carry in a follow on, you are crazy to not take it. Plus a greater profit share incentive?
If this is a semi legit shop I think this is an easy answer.
Previous funds have been successful (two funds prior to this one0. They really raised the funds through relationships and didn't market the fund completely and raised ~$225M. The fund is not a traditional LBO fund. The mandate is on infrastructure. Previous fund performance is ~1.5x and 10-13% net IRR.
This is a pretty reputable shop. They have a number of other funds that are more traditional LBO, but are smaller in size.
I don't work directly in a PE shop, so take my advice with a grain of salt. But this seems like a great deal.
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