I dont have the statistics. But if a private equity employee contract has a $50k bonus per "carry"...
On average, how many "carries" does a Private equity employee get per YEAR?
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That’s not how carry works. Are you asking what the annualized value of each carry point is worth?
I thought a "carry" was when a Private Equity or Venture Capital Firm completes a huge financial deal and because the huge deal was completed, everyone gets a "carry" or bonus.
You still didnt answer my question, on average how many times does an employee get a "carry" per year?
I think you’re referring to shadow carry. That’s like a bonus for exiting an investment as I understand it. Carry traditionally vests over multi-year time frames.
He didn't answer your question because your question makes no sense. You have a fundamental misunderstanding of what carry is and how it works.
That's ok - allow us to explain.
Carry is essentially the fund employees' share of the profits from a deal. Usually this is 20% of the upside (assuming the upside exceeds ~8% annual return).
To illustrate, let's say you're a VP at a $1B fund and you are granted 100bps or 1% of the carry. Let's say the fund has a 3x return, so the $1B turns into $3B. First the initial $1B is paid back to investors so you have $2B of profit. Of that $2B of profit, 20% or $400M is allocated to the carry pool, of which you are entitled to 1%. So that means in this scenario you as the VP would earn $4M of carry. Importantly, that carry is not realized in one year. The lifetime of the fund might be ~8 years so that means you "earn" $500K of carry per year, but it's back-weighted by when investments are realized. This means in Years 1-5 you likely won't get any carry checks, but then in the later years when the investments are exited you'll get large carry checks (typically individual checks each time a deal is exited).
Also when I said "fund employees" eariler I meant VP and above. Associates and Analysts typically don't get carry.
Jesus Christ. You lost the internet.
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