Associate / Senior Associate Carry
Wanted to get some references for what amount carry at Associate / Senior Associate level amounts to (for those that get to enjoy it). To the ones that have: what is your amount (and for what level)?
Looking at Heidrick & Struggles it suggests anywhere up to 1-2m so curious to see whether really every Associate that gets carry walks around with such an amount (which would essentially double your base comp)?
Bump - any experiences that can be shared?
Interested as well
Most larger funds don't give carry to below VPs - it's sort of the carrot to keep top performers around. For those that do give carry, the vesting period is generally longer than the associate stint, meaning most associates never actually see any of it
Thank, all clear - any indication of carry size (even if it never materialises)? Is this more 50-100k or more like 1m?
$100k-$200k for associates, to the extent they get any, some closer to $400k. $1M is more in line with the upper end of senior associates, I’d say that range is more like $600k-$1.2M (again, to the extent they get any… typically only at VP+)
May be a dumb question but curious how this works. So if you receive carry that vests in 6 years or whatever and you got the boot at 4 years, you wouldn’t see any of that money from carry?
You vest each year. The calculation is roughly total bps/# of years. If it is a 5 year vesting schedule, then each year you get 20%. If you quit lets say the 3rd year, you get 60%. However, each fund and each contract is different but there is situation where if they let you go without cause, you end up receiving the whole 100%. But the key difference between vesting and receiving payment is that some funds have American waterfall where others are European. In the European waterfall, you will not see a dime till the LP gets their money back plus 6-8% per year hurdle. In summary, if your fund has a European waterfall, you will not see a dime till year 7 or 8.
I got 125-150 bps on an 150-200M first-time fund. That’s likely on the higher end though… since we were a new firm they had to compensate for risk + the fact they couldn’t pay market cash salary
What's the market comp for an analyst/associate at a 100-150M first-time fund?
Not OP but was in similar position at first time fund that size - $140k-$175k was the range (non-NYC)
Thanks for sharing. To confirm does that mean that the partners/firm agreed that you get to take home about 1-2% of the carry generated (top-line metric so like revenue for the GP) by the fund as it generates and earns that carry (presumably upon exit and whatever other terms the fund has presumably over a 5-10 yr horizon)?
Yes
Interested in how carry for a multi-billion dollar fund that offers it for associates/senior associates is structured
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Sry, interested in the magnitude of it (both on an absolute basis and in relation to the cash comp component) and vesting schedule. Have reason to believe will be securing an offer w a carry component from a firm closing a new $3-5B fund, and not sure what to expect / what's market
I got 100k carry grant upon promoting to Senior Associate at an UMM firm. Should get 200k+ this year. 5 year vesting period for the grants.
Is it actually structured as $100k / $200k or is it structured as some % or # of bps that translates to $100k / $200k based on certain return assumptions? If it's not structured as a % or # of bps then I fail to see how you are actually aligned with the firm. Also is it cliff or pro rata vesting?
The way it works at my fund is that they size up the entire carry pool to a dollar figure based on return assumptions (roughly equal to fund size * hurdle rate * GP carry %). From there, your dollar amount of carry is converted into a percentage of the entire pool which is what you actually are assigned.
So, if the fund performs to spec then you get that dollar amount, but that figure can vary meaningfully.
Just to confirm, how does the carry grant work? Are those $100k the amount you expect to receive if the fund reached the typical 2x returns in 5yrs? Or is this the amount you're in for and if your fund returns 2x, those $100k carry grant actually flow as $200k in your bank account?
Interesting to see the numbers. Seem pretty good from what I've heard from friends elsewhere.
Can confirm the firm I am at and Brookfield both offered Carry at the beginning of the fourth year which translates to Sr Associate/Associate level. This is for the London offices - no idea how much that translates to though as yet to receive.
The numbers will be all over the place depending on fund size, AUM, location, etc, so it's hard to say what market comp is for this. As a general rule of thumb.
Associates - No Carry. It just doesn't make sense. The timeline of carry won't match up for an Associate who might be 2/3 years and out. At really small funds, they might give you a little bit as a token of "we all share in the economics". If you were negotiating, you'd be better off asking for phantom carry that pays out on a deal by deal basis, or the right to co-invest in deals.
Senior Associates - At large, established funds, it's still unlikely you'll get carry here. Large and established are tough to define, but I'd say any fund with more than a couple of billion in AUM and you're likely not getting much carry here. With that being said, smaller funds, you might be able to argue for more here, especially if you're a pretty Senior, Senior Associate and by that I mean post-MBA or an experienced lateral hire. If you were going to get carry at this level, I'd expect somewhere in the neighborhood of 50-150bps, again depending very much on fund size. The target carry dollars at work will likely be a mid-ish 6 figure amount, so you can use that to calibrate. Maybe evening getting close to 7 figures if you're basically given a VP carry package with the expectation that you'd get promoted pretty quickly after your senior associate stint.
VPs - This is where you'll start to receive carry, I wouldn't take a role without it. Again, it varies all over the place, but what I've generally seen is $1-3M in carry at work which usually translates into 100-300bps depending on fund size and fund staffing.
This is all what I've seen in the MM, can't speak for UMM/Megafunds.
How would carry scale at the principal and partner level at these funds in terms of dollars at work per fund?
Can't comment, just because it becomes too variable and I have no personal experience. Principal I'd assume another couple hundred basis points, Partner is impossible to tell, really depends on the firm dynamics. Some Managing partners might be very generous with the carry, others might keep a lionshare. Also depends on how many managing/founding partners there are vs how many promoted partners there are. You're always going to somewhat be at the mercy of the managing/founding partners. If you think of the share of the carry as being 100% total, I doubt that as promoted partner you're getting more than 10% or so. This is why you see a lot of folks some spinning out and starting up their own funds at the Principal/Junior Partner level.
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