Much has been said about the typical Comp and Comp Progression at traditional Buyout PE shops. The Heidrick & Struggles report documents what PE professionals make at each step in their career. Generally, above a certain fund size (including carry) it is something like Associate ($400K), VP ($1M), Dir ($3M), MD ($9M), then sky is the limit for the senior MD's.
Growth Equity is much more opaque. There is some good information on WSO about analyst/associate compensation at the top firms, with associates making perhaps $200-$300K with additional upside on sourcing. And some have stated that MF Growth associates make equal compensation to their traditional buyout peers. What I would like to know is, how does this income scale over time, throughout the VP/Dir & MD levels? There is no "Heidrick & Struggles" Growth private equity report for earnings at more senior levels.
M&I states:
"In other words, expect 60-70-hour workweeks and compensation in the $200K – $300K range for Associates, eventually rising to the high-six-figure to low-seven-figure level at the top "
This smells like BS to me. MD's at traditional buyout make $9M+ and MD's at Growth Equity make $800K - $1200K ish? No way.
Can anyone please help provide clarity on the compensation along the growth equity career path?
Yeah, you only really “earn” your carry over the vesting period which is usually 4-6 years.
So you “earn” a total of base, bonus and unrealised carry (/vesting period) per year - once the vesting is over you’re not “earning” carry you’re just waiting for it to pay out; though typically you’ll receive a new carry grant before your old grant fully vests due to new funds being raised so you’re likely always “earning” carry. You then only receive the carry about 3-5 years into the fund’s life.
All said, an MF PE Partner would be “earning” a base of about $500k, bonus of about $500k-1.5m and unrealised yearly carry of about $4-6m for a total of $5-7m a year - w/ ~80% of that not being realised as cash flow until a few years later.
You thus have 2 values for income: target total comp for current year (base, bonus, unrealised carry) and realised cash flow for current year (current year base, current year bonus, realised carry from prior years, realised deferred comp - if applicable - from prior years).