Crazy Comp Stories- PE
Saw something like this under the HF forum and would be intrigued to see some wild PE numbers for some mental masterbation. Thx.
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That's not really how PE comp works bro
PE comp is inherently much more stable... you don’t get the upswings but you’re also much less likely to blow up and find yourself out of a job. You might get some “stories” where someone got 175% of base as a bonus instead of 125%, but otherwise the big wins are from people who have carry when the fund returns 5x or something, and they get it over 5-7 years.
Obviously still very lucrative, but far less of the “had an incredible year and made $1M at 27” and far more of the “built up carry in multiple funds over 15 years and accumulated a fortune over time”
Cortec's Yeti exit comes to mind. I don't remember the details off the top of my head, but I believe they turned a ~$60MM check into $3Bn at IPO. Rough math says that's ~$600MM in carry, which means a VP with 100bps would have gotten a $6MM payday. Not too shabby...
Would 100 bps of vested carry at VP level be normal? If so, what would the tenure of the VP be?
My understanding of carry is that significantly smaller portions are allocated to juniors (all the way up to junior MDs) with the GP members sitting on the vast majority.
Didn't a bunch of the mid-level guys quit / retire once that hit?
Have first hand knowledge (MD is good friends with him) that the principal at Thoma Bravo on the Ellie Mae deal personally made 8 figures off of it.
Leon Black is like a deca billionaire, Steve Schwarzman is that and than some maybe. Jon Gray didn’t even start his own firm and is a billionaire. David Rubenstein mainly did the fundraising for Carlyle as far as I know and is a billionaire. Plenty, plenty of money to be made in PE. I think Robert smith is also a billionaire from PE
LyondellBasell comes to mind, think that's often cited as one of the largest equity value gains in history
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