Accelerated Promotions in PE?
How often do strong performers get early promotions in PE? In other words, a Senior Associate at a fund operating at or above the level of his VP / Principal peers would probably either want to move up quicker or find another shop. What are common ways funds incentivize employees in this case (particularly those with longer partner tracks)?
Very very rarely. PE (similar to IB) has very rigid timelines and you would have a hard time finding a shop laterally that would give you a wildly early promotion. Maybe if you severely downgraded shops, but a competitor won't cut more than a year or so off your promotion timeline, even if you are good. It would piss off their current people. It is also financially challenging to move shops given you often give up unvested carry (or at absolute best get a buyout for less than it would be if you stayed).
It's a lot different in something like HF or S&T where you can clearly be a superstar trader/stock picker with tangible value-add, and you see people move up quickly - lots of 35 year old MDs in those seats. A star ASO has little tangible value to show for it - sure, you modeled the investment really well, ran the deal in front of IC, or even if you sourced a great deal... those will get you a high ranking and better comp, but they are not going to move you years above your peers. Maybe you skip a year at some point but there is a reason you aren't seeing this happen.
Not sure this is really true. You're implying, somewhat, that PE firms have no differentiated compensation (in terms of $ or promotion) across any given class. However, there are plenty of people who make partner / move up the ladder quicker than others. I know of instances of this at my own firm (i.e. the youngest person to make partner or someone who got a quicker principal promotion) and have seen it elsewhere too.
I will say that the typical form of differentiation is getting the promotion vs. not getting the promotion.
OP here - both helpful insights. Double clicking on the point on comp, understand that there is a material jump in comp at each title so how does that play out when thinking about market comp across the street for firms with different promotion paths / title definitions?
For example: Fund A track is associate - principal - partner vs. Fund B is associate - senior associate - VP - Principal - Partner. Would imagine Fund A Principal in Y1 has a similar comp package to senior associate in Fund B, assuming similar fund sizes.
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