Hi all,
Been offered a lower MM PE role at GBP 70k base / 25% bonus. I have 7 years big 4 experience.
Other roles in the space I’m interviewing for have base 80-85k and bonuses of up to 100%.
Can anyone offer any insights as to whether this is market or if I’m being lowballed? I plan to negotiate
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Based on the most helpful WSO content, compensation in the private equity space, especially for lower middle market (LMM) firms, can vary significantly based on several factors including the size of the fund, the firm's location, and the candidate's experience. Here's a breakdown to help you assess your offer:
Base Salary: For a lower MM PE role, a base salary of $70k seems to be on the lower end, especially considering your 7 years of experience in big 4 advisory. The context provided indicates that for MM PE roles, the base salary can range significantly. For instance, a pre-MBA associate position in a state with no income tax and a fund size of ~$500m was offered $160k cash comp. Although this is not directly comparable due to differences in fund size and location, it suggests that base salaries can indeed be higher than what you've been offered.
Bonus Structure: A 25% bonus potential also appears to be on the lower end when compared to other roles you're interviewing for, which offer bonuses of up to 100%. The bonus component is a significant part of total compensation in PE, reflecting the performance of both the individual and the firm. It's worth noting that bonuses can vary widely and are often tied to the fund's performance, which might explain some of the variability.
Negotiation: Given the discrepancy between the offer you've received and other roles you're considering, it seems reasonable to negotiate. When doing so, it's important to consider not just the compensation but also the learning opportunities, culture, and potential for career advancement. If the culture at the new place is a strong positive, it might be worth trading off some immediate compensation for longer-term benefits.
Market Trends: The context suggests that compensation in PE can be highly variable. For someone with your level of experience, especially coming from a big 4 advisory background, aiming for a higher base and bonus would not be unreasonable. It's also beneficial to consider the total compensation package, including any long-term incentives or profit-sharing opportunities that might not be as immediately visible as base salary and bonus.
In conclusion, while the offer might seem low compared to market standards for similar roles, it's essential to weigh all factors, including the work environment, growth opportunities, and how much you value the firm's culture. Negotiation is a reasonable next step, armed with data on market compensation and a clear understanding of your value proposition.
Sources: PE Associate Offer - Comp Too Low?, Is this associate compensation competitive?, Ask CompBanker, Compensation Reports (Mid-Level), Am I being underpaid?
This is a horrible offer. LMM Associate all-in comp should range from high 100s to mid 200s depending on location and the firm's trajectory. I'm not sure this is even worth negotiating - they are off market comp by 50%.
Thank you, this is in UK if that changes things?
Holy moly for 7yrs exp and an ASO role that is highway robbery. Lowball doesn't even begin to cover it.
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