At your firms, what's the standard split of the carry pool between 1) the investment team members directly managing said fund, and 2) the house (the management co, shareholders, etc)? E.g. if Heard it can vary widely, but curious what data points people have.
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Based on the context provided, carry is typically calculated at the fund level. The typical promote structure will have a preferred return followed by either one hurdle or multiple hurdles. The Firm/Partners usually receive 60-80% of the carry with the remaining 20-40% reserved for team members. However, it's important to note that these percentages can vary widely depending on the firm and the specific agreement in place.
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$15bn+ US fund.
Top 3 managers 10% each
CIO 7-8%
Partners 1-5%
Mid-level Remainder
No GP entity carry allocation as such.
800mm AUM.
House (3 partners) split 69% evenly, 31% split as follows:
5 yr vest, straight line, annual vest.
Wow interesting, is this common for funds of similar sizes?
No. It is rare that anyone under Sr. associate gets carry at smaller funds, let alone any ops people.
Agree that it is typically rare for American PE firms, but actually not uncommon for European PE firms (at least the mid-market ones) to give carry to Senior Analysts/Associates and above, and to ops and IR guys as well. Europeans tend to have to idea of "long term incentive alignment" for the whole firm. Have seen funds give out 1-2% for Associates.
European funds (to European based professionals) also don't pay as well as their American counterparts. But they typically are quite fair and actually grant carry that is vested. Some American funds have the funny business of having the right to buy back your vested carry at a certain valuation, or straight up fuck you over by branding you a bad leaver if they know you're leaving for a competitor.
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