Comp Decreasing?
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Wouldn’t surprise me if this is partly a public GP phenomenon. Once shareholders enter the picture, there’s often more pressure to standardize comp and protect margins, even if fund performance remains strong.
Yes industry matures what did you expecg
Well this is not the trend I see at other MFs… Private GPs always paid more, one can accept being $100k below those levels which would be ~$550k, but a decreasing comp to these levels is unheard of (I think). Also $475-500k ($75k of it in illiquid RSUs) for VP1 would be quite uncompetitive, would be similar or lower than a Brookfield
Pretty sure I know which fund this is. I worked there myself but recently left to another MF.
Had friends who worked in RE (original one). Situation with RE in this fund specifically is you have one of the acquisitions that have a very similar strategy and they were comped lower...now how can that be the case given we are all one company? Perk reduction linked to that as well.
This impacts RE. So far, did not impact other teams. Also note that from this year onwards there were other specific comp changes made.
Feel free to PM if you want to chat further.
Just name the fund.
It's definitely a mix of being public and having to standardize comp + decreases in performance increasing cost pressure. Going public for a MF is about making the GP owners rich, not creating a better environment for the median/entry-level IPs.
I've been saying this for a while now. PE, and particularly REPE, is dying. Real estate is a mature industry and has fully recovered from the GFC and covid. Funds are being consolidated left and right with upwards pressure on returns, but downwards pressure on comp. Unique strategies such as private credit and small bay industrial have been commoditized by emerging funds, leaving little room left for creativity. Why should your company pay you $550k-$600k when they can pay someone who just got laid off much less?
I'm in CRE lending and it's incredibly competitive for financing opportunities bc there is so much money out there which compresses margins and fees. This will lead to lower comp.
i’m very late stage with a MF right now after being in MM for a long time. would love to hear from you on this further and trade notes if you want to PM me.
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