How do Sovereign Wealth Funds manage to attract talent if they don't pay carry?
SWFs don't pay carry, I hear their base salaries are not much higher than other funds. Do they have higher end of year bonuses?
Mar 18, 2023Mar 18, 2023
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Comments (11)
Lifestyle is better
Can't imagine it's too much better, at least enough to compensate for the lack of carry.
Materially better in my opinion - pull around 50-65 hours a week at my SWF versus the 75+ my friends at megafunds pull. But again comp is less so there's no free lunch
Lifestyle, culture, more stable job, more likely to get promoted, no stress of fundraising
Everyone I know who does SWF is in the office 40 hours a week, with actual work hours of 25.
Lmao. Sounds the dream
Some of the swfs seem to close tons of deals a month with not large teams. How can they work so little? Do they just lob in 10 page investment memos for billion dollar minority deals?
Because these funds invest like pension funds.
They have disgusting amount of money and they have to allocate some of it to non-passive investments or they would be out of a job lol.
So they convince their LP type capital that active investing can creat some alpha. They meet with marketing guys from a bunch of alternative type places, take their memos and diligence, format into their templates and allocate money.
If they out perform they win. If they can defend that their alternative investments move against the market or are not correlated, they also win.
If they under perform, they say they were misled and will be lowering their alternative allocations to something else. No one cares because their silent investor pool is basically the government who never do anything lol.
If you care about just clipping coupons for your career and coasting, it's a damn sweet gig.
If you're trying to retire early and make life changing money, it's not for you. But overall, I think it's such a great job. No idea how to break in once your above the associate level.
Some funds have a carry-like LTIP. But in general you would making less than comparable PEs.
The selling points as mentioned above are better lifestyle while still working on large transactions and making decent $$
What does this LTIP look like? Is it based on deal / portfolio performance?
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