Carry at VP level
Anyone got any reference points for Carry quantum at VP / Principal level for UMM funds / MFs? Appreciate it is different for every fund but keen to get a directional sense
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Have two data points for you (both global UMM funds with $20Bn+ AUM)
- 20bps
- $3MM (quoted in dollars, backs into 30bps)
Is this for vp level? And do you have any idea on how it scales at the principal level at umm funds?
And thanks for sharing the data points
Based on HH discussions understand typical range for 1st yr VP would be anywhere between $1 - 4m. However, some claimed that range can be $10 - 25m (for MFs) - this seems pretty far off for a 30-35yr old guy and would imply a huge gap to MM or even UMM (like 2x - 3x more). Any experiences with either of these data points?
I imagine the BX/APO and tech (SL, Thoma Bravo etc) principals fit the $10-25m range, that's what the math works out to assuming 20-30bps or so on a few $15bn+ funds. Triple it for the partner level (?) but that'll be like a decade down the line to actually realize carry. Maybe you'll be 40-45...
Bump - any more insights into this?
Anywhere between 10-30 bps, depending on how top-heavy the firm is and how long it's been around.
So this doesn’t scale with fund size? Ie if you go for a fund that’s 5x larger, you earn 5x more? For sure there’s a scale effect, but would ‘t expect it to be 1:1?
If anything, you may get less on a percentage basis at larger shops because there are just so many mouths to feed. Say it's an investment team of 40 with 10 MDs... that's a lot of economics flowing to the top. But as a VP, you'll still expect to see a solid dollar amount at the end of the day because of the fund size. Go down market, and maybe your whole investment team is only 10 people with only a couple co-founders at the MD level. They'll take the bulk of the economics, sure, but you might get a larger percentage of the carry - but a larger percentage of a much smaller fund.
Thanks, got it. Ultimately, is it fair to assume that to some degree Carry (in percentage) is also somewhat backsolved into what it means in $$ for a certain seniority? Appreciate there is still a gap of [10-50%] between MF and (U)MM but at the end of the day if in a MF you’d earn 5x more, wouldn’t there be a natural brain drain in the MM space?
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