Hey all, currently at a MF and was curious about how others' carry vesting is structured.
We have a 5 year vest period which is fine, but there's a full clawback of vested + unvested if you leave to a competitor within 12 months, which is a massive mismatch vs gardening leave.
Seems off market to me based off feedback I've gathered but would appreciate any other views.
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A general clawback linked to fund liquidation / closedown calculations would tie to what the LPA usually contains.
I agree, just an opinion, that is doesn’t make sense to clawback vested carry as I understood vesting was meant to reflect the time you have already invested with a fund.
Then what's the point of the vesting schedule if they can just take it all back?
Pretty much. It's a shift from compensation to retention which defeats the point of having it.
Weird. Unfortunately you probably don't have much leverage. Do they expect you to just not work for 12 months? Is it the same for senior investment professionals?
Yeah that's what they're expecting if you want to keep it. Not reasonable, but as you said, zero leverage.
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