What would one expect for compensation for a PE fund with latest fund size of $600-$800m? Just got an offer for a tier 1 City like NY/SF ($750m latest fund) and comp is $210m (105 base, 100% bonus target, no coinvest or carry). Is this more or less in line with market? I just really need to get out of banking and this fund checks all the boxes but just worried if they might be underpaying me as I know UMM/MF pay much higher
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Definitely light
What would you expect? should i negotiate?
that’s very light… should be at least $275k imo
275k for a 750m fund??
Yes
How many years out of undergrad are you and were you in IB before?
Im around $220 in a very low cost of living city. Similar fund size
In IB right now and im an associate at a pretty decent bank (Jefferies/DB/UBS) but I actually can't stand it anymore and been trying to recruit for the last few months but only landed this role... I'm likely going to take it but the comp is really worrying me. not that i need to be paid a crazy amount but im taking a decent pay cut from my role here in IB.
Would you be coming in as an experienced analyst or associate?
If associate, this is well below market
associate
I am an AN1 signed for a PE offer at a similar bank to Jeff/DB/UBS at a mid-tier group and that comp seems low, especially for an associate. I am getting well over that at a MM in the $1-2B fund range and would come in at a younger age and presumably with less experience. It is 100% an underpay.
What is your comp package?
It's light, yes, but you shouldn't be overly worried about comp if this is the only offer you got and it checks all the other boxes. Worst case, you do it for 2 years and go to B school or can hop to sr. associate role elsewhere.
Yeah I guess I'm just worried if they are paying me lower than the other current associates at the firm, but it'd be wierd if I asked them...
At least ask for more. Search Heidrick & Struggles PE Compensation Report. I think you will find some data points to support higher pay.
You will at the very least be told "no this is our firm offer", which you can then just concede. But you gotta at least try to get something more
Even 5 years ago this would be considered low.
Edit: Saw you already signed - better to learn this lesson early on in your career I guess!
Edit 2: The one thing that could change this for the better is if the 100% target is treated as for meeting expectations w/ decent upside to earn beyond that, or if that's really for doing a good job and there might only be like 5% variability for being a stellar performer.
https://www.heidrick.com/-/media/heidrickcom/publications-and-reports/n…
Yours seemed light. This is a good comp benchmark report.
This report says 220k for base+bonus for $1bn-$1.5bn fund? So mine is not far off it seems
You’re fine, don’t be disheartened. As cited above, the compensation report from Heidrick actually supports your comp levels (note Heidrick lumps together experienced associates as well as senior associates). While there are certainly funds out there that pay a lot more, there are also ones that will pay less. With the current state of the market you cannot exactly expect a bunch of other offers to come rolling in and this is a clear opportunity to transition out of banking to the buyside, which appears to be your goal. Long term the pay difference won’t matter. Look at this as an opportunity where 90% of the value comes in the form of experience and career building — you can transition to a higher paying role in a couple of years if you are unhappy.
Just a note on location: Funds are generating fees back on fund size and fees charged to portfolio companies. The fact that they are in major markets doesn’t enable them to generate more revenue and therefore have more cash on hand to pay the staff. In fact, overhead costs are substantially higher in NYC so the same sized funds located in less expensive markets will actually have more ability to pay. While this usually just results in senior management getting more or hiring more professionals rather than higher pay, the mere fact that a fund is in NYC doesn’t necessarily mean they will be able/willing to pay more.
Lastly, I advise you not to start this new role upset or frustrated with your situation. True or not, it is going to negatively affect your performance if you’re always thinking “my peers are getting paid a lot more to do the same stuff.”
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