2023 PE Comp Expectations
Obviously IB bonuses way down, should the same be expected for PE or are people still anticipating bonuses 100+% of base? Obviously varies by firm/ a number of other factors but curious to hear if people are expecting large drop from 2021 & 2022 comp
Will be pushing for an increase on base. Fundraising went well in the last year or so and capital deployed so more management fees at work. Also dust has settled on comp for IB / law etc.
Does your firm only charge management fees on capital deployed?
I believe so, we have some co-invest too and not sure how that works. But, I know the lower bound if that makes sense.
Expectation: flat % bonus, increase in base.
It should not correlate with banking as different biz & revenue visibity.
What about PC/DL/Special Sits comp expectations?
My 2022 bonus was >100% of base as an ASO1 at a DL fund, base up the expected ~10%. Guided towards bonus of even higher % of base next year
As others pointed out, different business model so less impacted by deal activity. Even though deals were way down vs 2021 (especially in Q4), our net aum growth was better in 2022 due to lower run-off as no one was refinancing existing credits. I expect a similar slow 1H in 2023 with new deals really picking up in 2H. Believe we won't see a good market to refi deals at better terms until 1H 2024 tbh, so management fees will likely only increase YoY. Unfortunately in PC land most of 2023 will be working through liquidity issues and covenant trips at lower cash flow credits
is 100% bonus assumed for most PE funds? Or is this at the MF/UMM level only?
First full year bonus was about 100% of base so all in I’ll be mid-300s at a MF. Happy with it and feel that our team‘s comp wasn’t really impacted by what the banks are feeling. Also, I feel like this is where it pays to stay with a team and role you like and build something vs. hop every 2 years like the fashion over the past 5 years. But to each their own - comes down to doing what you like.
My friend at a different MF says she was happy with her bonus but they were really apologetic when they told her, idk lol weird dynamic there.
Was your bonus the exact same as the target in offer letter?
Minimum is what is in your contract. Issue is if you’re in a 2 and out program and don’t want to b school…
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