HPS Updated Comp
What are the numbers looking like for HPS post IB-related comp bumps? Any differences between the direct lending (Sr debt focused arm) versus Mezz Fund?
Anyone have any insight on how the comp accelerates as you climb up to VP? Have read varying opinions on other threads where 400-600 cash comp for MF PC firms should be expected but where does HPS fall on that scale? More importantly what does carry at the VP translate to on cash comp basis?
Heard that HPS tends to pay the most of any of the large private credit platforms including beating out the literal biggest players like BX, Ares, Sixth Street, etc. Tryna figure out if there's any truth behind that - may be given they tend to pursue the hairiest deals out of the lot
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Don't know HPS comp but just curious what #s you are hearing? Golub/Owl Rock/Antares type funds probably pay ~$310-$330 for aso 1 and $500 for sr aso/avp (first hand knowledge from one of them so might not be applicable to all). I'm guessing BX probably pay $350 for aso1? Is HPS paying more than that? Just curious what numbers you're hearing.
Edit: the sr. aso/AVP is not first year to clear confusion.
So heard that most MFs lean closer to $300 than $350 at a couple firms (Ares/Bain/SS), excluding sign-on at ASO1. I was assuming that given HPS is touted as being like the APO of PC (i.e. not least of which cuz they pursue hairier transactions but because they just tend to pay the highest in the industry at junior levels), they pay closer to $350 at ASO1. I know Antares varies comp by city with only NYC breaking $300 - tier 1b and 2a cities like Chicago and Atlanta have sub $300 comp.
Are you sure on the $500 comp for Sr ASO / AVP (probably not Antares so one of Golub or Owl Rock). That seems awfully high for firms that pay $300-$330ish at ASO1. That means total comp raise of almost 50% over 2-3 years. I'd guess that Sr ASO / AVP comp would be closer to $400K at other MFs. If the $500 figure is accurate, do you know how this scales when you hit VP?
Thanks!
No idea how it translates to VP. Close with a AVP/Sr.aso and that was the number he told me. When I was having my comp discussion, I was told 2021 being a good year probably added 10-20k to my bonus so around that 300k number as well. Applying the same %s the number my buddy gave me then we're looking at ~470k.
Re: HPS, I’ve actually never heard of that before! 350k makes sense though. They are a big player though I doubt yield translate directly to comp. Imo it’s more on the AUM and deal volume. AUM fees + more transaction fees = higher comps.
I should also note the AVP/sr. Aso data point I got is not from someone who got promoted recently from associate so a bit more than the 2-3 timeline.
I work at one of these shops and can confirm VP1 (i.e. post 3y as Associate) you can expect >=$500k. Again, MF PC comp should be generally in line with MF PE (bar few exceptions). Yield does not translate into comp as someone below mentioned, AUM and velocity of deployment are key in PC and can make comp very sweet.
What type of hours during normal times and during live deals are VPs typically working on the PC side?
Super helpful. Agree on the point re comp and AUM (actually my comment).
Lmao you must be high out of your mind to think post-IB private credit funds are paying you $400-600 out of the gate. Just cuz IB comp went up doesn’t mean the entire street drastically shifted. MF PE won’t even get you $600, PC is in a completely different zip code
This is coming from someone who used to work at a $45bn+ shop that did a ton of private credit
Dude read before replying. VP comp is said to be 400-600. You think VPs in PE or PC don't make that much on a cash basis?
Eh fair. I read it as post-IB like associate. VP definitely 400-600 for PC.
PE VPs can be even higher cash comp depending on the fund.
HPS can also pay higher if they really like you, and promote you faster to VP. Have a few very good buddies there and ones a 26 year old VP.
$45bn+ shop couldn't teach my boy to read first, come on now Mr. Research Analyst in HF - Other!
Kinda loses the zing when you have to put the full anonymous title
Here are some actual data points on comp since there's a lot of noise here / wrong numbers (it also depends on which strategy you're in) and think it's relevant for industry. The pay is higher because generally there's minimal associates (probably highest in private investing honestly per AUM, I think all of their funds might have 3-4 max per fund?) and recently high turnover: 1. Associate - Base is $175,000, bonus is anywhere from $175,000 to $325,000 (skewed higher last year) 2. VP - Base is $200,000, no carry (able to coinvest but not sure if anyone really wants coinvest in PC), bonus is TBD but all in comp is north of $500,000 - $600,000
Who’s making 500k as associate? Is this on some sort of 3-4 year associate timeline?
Yep that’s right - have seen associate to vp jump in 3-4 years (sometimes 2.5 years)
Is it normal for VPs to receive no carry in PC or is this exclusive of HPS? I thought carry was quite common on the PE side (maybe wrong here) in which case there would be a substantial difference in total comp despite cash comp being pretty similar / possibly even higher for HPS. For example, assume PE VP gets 50bps in a $10B fund (UMM/MF PE firm for an apples-to-apples comparison w/ HPS) that delivers a 2.0x return. 20% of $10B profit = $2B of which 0.5% is $10MM vested over 7 years is ~$1.5MM. So total annual comp for a VP in PE would be closer to $1.5 carry + $0.5 cash = $2.0MM. Seems off that a VP in PE would be earning 4x as much as a VP in one of the largest/highest paying PC firms.
Yes, I heard they do get carry.
Out of curiosity, how does this carry calculation differ if one works at a FoF like AlpInvest, Lexington, HL, etc.?
They also hire associate titles out of MBA, so the higher end of the range is more comparable to VP / SA at other funds.
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Where have you heard this from? Any idea which group? I know some people joining them soon, so am curious
Heard carry can start at VP but not guaranteed and it’s not guaranteed at Director level either. With that said would assume most at director level are getting carry.
Heard that HPS does not give carry at the VP level because they bake carry into the bonus figures. imo I'd rather have a higher yearly cash bonus than wait 7 years for carry to be realised. The exception is funds where they have a mechanism to payout carry yearly.
I was with some of these gals last night and they ain't look like they make anywhere near that.
Can u elaborate
You guys are all WAY overestimating how much these GPs share their fee/carry pool with low-level employees. The straight waterfall math of AUM*return*carry*bps doesn’t work because these are very large GPs with external investors to feed (Dyal in case of HPS, public shareholders in case of BX/Ares). Your take rate is not determined by how much is available in the fee pool, but what is the prevailing market comp and what minimum it takes to keep you (if they like you). Only at the Partner level or running a directly attributable AUM pool level do you participate in firm economics like that.
Often, you get paid less at a $100B+ shop than you can at a high-performing, founder-led $10B shop at junior/mid levels. The math that someone was doing here that only 3-4 Associates work on these funds (definitively not true at any of these shops. Think more like BB Lev Fin Associate count) and therefore are entitled to a huge windfall by virtue of massive AUM, just doesn’t understand how decision makers think about your comp.
At VP, your expectation should be $400-600k at any of these shops regardless of AUM - in an extremely busy year and when job market is hot like 2021, you might get an unexpected $100-150K bump, which is nice but in no way should you assume this is recurring income for your personal finance. In case I'm not making myself clear enough, your comp as an Associate/VP has NO correlation with AUM beyond ~$10B (but slight correlation with AUM GROWTH, not absolute LEVEL). They look at the market comp for tier 1 large cap PC/buyside which various recruiters feed into the HR departments at these firms, and that’s what they pay. Yes you do get co-invest and token stock option (vests over multiple years) if you wanna count that.
Sorry to be a party-pooper. We're all fortunate to be even making this much for monkeying around in Excel and having commoditized skillsets, but some of these replies above are just delusional about Asso/VP's value at a mega cap PC shop and misleading. It's a revolving door and we're all just fixed cost until your name appears on the fund docs as a key man.
Source - former VP at one of these shops.
So true thank you
Although, what's with the huge dif between PC and PE then? Isn't it pretty much accepted that VPs in PE are making these 1MM carries, etc?
Bump, any real numbers?
Bump for updated numbers compared to MF
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