Is $200k all-in (+ some carry) low for a 1st year associate at a LMM PE fund?
Currently interviewing at a LMM PE fund ($500mm fund, $1.5bn AUM) that's all-in is $200k starting. It also has some carry, but it didn't sound super significant starting off (I'll get the concrete numbers if/when I get the offer letter). It's located in a cheap "tier 3" city that I have a connection to (I know that's a stupid label, but just think of a city a step lower and a lot more affordable than Boston / Chicago / LA ). I would be coming from a BB in NY. Would love to get thoughts on if this comp sounds low or in line with a lot of funds in the $500mm range.
Latest fund size and AUM?
I'm assuming that $200k number doesn't include carry at work? If it's $200k cash, that's a little light but not terrible in my opinion. If it's $200k and that includes something like $250k in carry annualized over 7 years, then it would be light.
If you can get base + bonus to $200k or so and then add carry for the most recent fund on top, that's not a terrible package for a tier 3 1st year Associate.
The things I'd vet are, what does the career progression look like? Could you stay for a while and not be 2 and outed? What does B school placement look like? How has the fund performed? Who are the LPs? What are the GPs, what is their background. And if possible do some back channel referencing on your own, either through linkedin or leverage recruiters.
In my opinion, people on WSO are used to inflated PE Associate numbers coming from the MF and UMM funds of the world. If you like the team, can be in a tier 3 city that you have ties to, and wouldn't mind spenidng more than 2 years in the city/at the firm, then 200k cash will allow you to likely live like a king, while having some carry upside. If things go south, I'd downside protect by making sure you're still making good cash to save for B school, the experience is good enough that you can lateral, or the firm/partners have a strong enough reputation to help you get into a good B school so you can pivot if needed.
TLDR, sounds like a good not great offer, but it's a small fund, so I don't know if you can expect that much more, especially given the geography.
What's a typical fund size range for LMM/MM/UMM/MF?
Agree. When I was a first year associate, my cash comp was in the low $200ish with a smaller AUM/fund size (tier 2 city). Didn't get carry until senior associate. I was fine with lower comp given location, team, upside and partner track without MBA.
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Yeah not sure what this guy is talking about with $400k salaries for 1st year associates, especially in the LMM
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1) This is absolutely not representative of the average LMM or MM fund. $400k cash comp as a first year associate is comparable with the top paying UMM / MF programs. I’m not going to say your shop doesn’t pay this, but I will categorically disagree that “most” are anywhere near that… $200k-$250k all-in is typically what these shops pay.
2) You hiring?
Heard Huron capital pays 150 all in. Fits with your criteria of ~500m fund in tier 3 city
$200k isn’t unreasonable for a fund that size in a tier 3 market. I think that’s where mine started first years
Yikes. Have met first years in IB that pull in more than that, myself included. Would dig into what your carry looks like, otherwise keep interviewing.
You seem socially awkward.
$200k is in line with funds of that size in similar markets. Any carry on top is a plus, and very atypical for associates
$200k as an associate at this size fund plus some carry is a very solid offer. Especially in a “tier 3” city.
same situation, thought it was pretty low, but then the hours when im not on a live deal are fantastic (50 hrs no weekends). Definitely worth the ~40k less total comp for the hours.
I think it sounds about right. Keep in mind if you're in a t3 city your net might be very close to someone making a lot more but living somewhere with aggressive tax issues to deal with + cost of living. $200k in t3 takes you a lot further than $200k in SF or NYC...
On the carry, usually quite a few gotchas to it, read over everything carefully and don't be afraid to ask questions. I know a lot of people who really didn't even understand what they were signing up for around the carry end of their comp. Get answers to Qs in writing just so you have something you can refer back to later. In LMM there is no real "standard" around how carry works. Don't be worried about appearing dumb when asking questions, as it is usually quite complex. It's a good sign to ask smart questions.
Maybe not relevant at all.
I made a move into German PE - small LMM Fund (think 250m AUM). Came from NYC PE (10 Bn AUM).
Took a good paycut, but living expenses much lower + much better WLB. I am 1st Yr Assoc - making c. 140-160k (Euro) + getting c. 1-2% Carry.
Just FYI.
That actually sounds like a decent comp package.. my 1st yr in tier 3 city was $175k with no carry. That was a while back, but even now, $200k+carry in a cheap city is a very compelling offer.. if you like the culture and WLB.
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