Mid Level Comp - Secondaries or Co-invest
What’s an accurate comp target for mid-level secondaries / co-invest role in a HCOL?
Executive recruiter hired by the firm looking to make an offer, threw out $190K salary and $45K bonus (total comp roughly $230-$250K when you include some other things). These are their expectations. I thought this sounded low, and want to negotiate, since this would be just barely an improvement on my current when adding in higher cost of living.
Position is in a non-NY HCOL city. VP position. Newer firm in the space, role is dedicated to the GP-led side.
Base seems ok but bonus seems very low? I would imagine proper GP-led shops pay 100%
Thanks! Too low bonus that I'm thinking I misheard it.
Seems light. At a large secondaries/co-invest platform in NYC I would expect somewhere in the range of $500k for a VP (depending on YOE). Given the location (assuming non-SF) + newer firm (does this mean smaller?), I would think $350k+. At the proposed cash comp range, I'd certainly expect to see some carry.
Thanks! $500K is on the higher end of what I've heard, so far, but makes sense. Around $300K was the number to my head, but $350K sounds better!
Ok so typical base at the VP level at a larger shop is $250k with a bonus up to 100%. If you're at a smaller shop then $190k and a 25-50% bonus seems market.
FWIW I just did a process for a director role at a very very large secondaries shop. Base was 400k, bonus was 400k.
At one of the larger shops with dedicated co-invest platforms/groups. VP pay is $500K cash with low-mid single digit $M carry allocated over the course of your VP years.
Any thoughts on HL and Adams Street's pay in the industry?
Both are bottom of the barrel in comp. HL used to be like Cambridge, pure play consultant, so comp sucks and their headquarters are in PA...Adams Street is more of a traditional FoF, and the secondaries fund only charges 1/10 so they don't pay well.
Seems solid cash comp! How realistic is the carry in the co-invest/secondary world? I imagine it takes even longer than normal buyouts?
I can’t speak for secondaries but for co-invest it has to be as realistic to somewhat better as the average PE firm given the point of the strategy is to invest in a bunch of PE deals and track the broader PE asset class, with the hope that you get a bit of alpha from choosing to invest in the better PE deals. You’re still looking at these deals the same way as a typical GP, with the added dynamic that you also care about the GP historical performance.
As for the time it takes to get paid from that carry, has to be very firm dependent. But imagine it could be slightly faster to basically the same given carry agreements have the usual vesting and hurdle dynamics. Only thing is that coinvest funds are deployed faster and raised on shorter cycles (usually every 2 years), so perhaps carry is realized a little quicker.
At VP level I would expect around 400k-500k cash plus carry. Associate levels in secondaries and co-invest are similar to MM PE all in cash comp. Where the divergence starts between this and buyout shops is when you get more senior given the lower economics charged.
Depends who you are comparing to. Secondaries is a very scalable business and the biggest players raising $10/15/20billion+ funds only have 40/50 people on the investment teams. Even with lower fees/carry of generally 1/10 or 1.5/12.5, the economics per investment professional is probably comparable to a lot of direct funds.
Very true, what is your take in general on co-invest/secondaries platforms as part of a FoF giving "half of the carry to the house". Not sure this happens in lead sponsor buyout firms.
Base seems right. I’d expect bonus to be more in the 50-100% range. Maybe they’re sandbagging since it’s a newer firm and they don’t have great clarity yet on mid-level comp. Any carry included?
Bonus is way too low, are you sure it's not just a signing bonus? Anecdotally heard Whitehorse pays analysts ~$200k CAD all in so ~$250k USD for VP is extreme low ball.
Once again, depends on the size of the firm - whitehorse is huge and can afford to pay that
Do you know how much white horse pays as you progress? How does it compare to CPP and Onex.
Just a guess but would imagine Whitehorse pay progression is better vs CPP secondaries since they're more sweaty. Onex is not secondaries and their pay is a different level vs other Canadian firms but whether they can continue to do so is in doubt right now.
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