Currently an A1 at a BB IB. I received a 2026 associate offer to join an LMM PE firm in NYC. I like the firm a lot, but comp seems low relative to what I could get elsewhere. Is there any room to negotiate base comp? I am not sure if it’s worth asking and if it would send a bad message.
For what it’s worth, I went to HYPSM and work at a top GS/MS/JPM group where most analysts exit to “better” PE firms
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Based on the most helpful WSO content, negotiating compensation in this scenario is possible, but it requires a strategic approach. Here are some key points to consider:
Assess the Offer in Context: If the LMM PE firm has a fund size or AUM that aligns with the lower end of the market, compensation might naturally be lower compared to larger funds. However, if the firm offers strong intangibles (e.g., culture, learning opportunities, promotion trajectory), this could offset the lower cash comp.
Room for Negotiation: Many WSO threads suggest that PE comp isn't rigid, especially at smaller firms. If you believe the firm really wants you, you can push for a higher base or bonus. However, be prepared for the possibility that they may not have the flexibility to adjust cash comp significantly.
Alternative Negotiation Points: If increasing base comp isn't feasible, consider negotiating for other benefits like carry, co-investment opportunities, or even a signing bonus. These can add significant value over time.
Approach with Caution: When negotiating, ensure your tone is professional and collaborative. Avoid coming across as overly aggressive or entitled, as this could send the wrong message. If you decide to negotiate, it’s often better to do so over the phone or in person rather than email, as it allows for a more nuanced discussion.
Market Comparisons: For NYC, first-year associate comp in LMM PE typically ranges from ~$200k-$275k total, depending on fund size and firm prestige. If your offer is significantly below this range, you have a stronger case to negotiate.
Be Ready to Walk: As one WSO thread highlights, you should be prepared to walk away if the firm isn’t willing to meet your expectations. However, weigh this against how much you value the role and the firm’s long-term potential.
If you decide to negotiate, frame it as a discussion about aligning expectations rather than a demand. For example, you could say, “I’m very excited about the opportunity and the firm, but I wanted to discuss whether there’s flexibility in the base comp to better align with market levels for NYC PE associates.”
Good luck!
Sources: Is this associate compensation competitive?, PE associate comp, My Path - MBA Banking Associate to PE, Q&A: 3rd Year PE Associate ($10bn+ AUM, MBO/LBO, equity, mezz, distressed debt), 5 ways a career on WS is not what it used to be
Bump - gotta make a decision soon. Would appreciate any input
Don't know why you had to mention where you went to school and what bank(s) you worked for, as if the Partner is gonna suck you off for that. Jokes aside, the answer is no. That's like negotiating your IB Analyst base. The best you could've done was tell the headhunter your comp expectations during the process, but even then that's more of a filter than anything (e.g., if you told them $300K and this firm is paying $200K, the HH would tell you this process is well below your expectations before you got in too deep).
If the comp is a deal-breaker, then you can try to negotiate but be prepared to reject the offer. If you reject it, I would suggest you tell your headhunter something different as to why you're rejecting it, and reach out to other HH's in case this current one cools off on you.
For what it's worth, it probably wouldn't really affect you as you're 1.5 years out, but I do imagine whoever you're talking to you will be slightly annoyed for a small period before forgetting.
Thanks for the input. Agree that bank / undergrad doesn’t matter much, but just wanted to provide context in case it was helpful, particularly as typical associates at this firm tend to come from smaller banks and non-targets
I was in a similar position coming from banking. I negotiated a target bonus increase from $125k to $175k for my first year (2021 start). However, I had a competing offer which I leveraged.
What do you bring to the table / leverage do you have versus the LMM PE firm? Pretty much nothing. I'm sure it can't hurt to ask but when you think about the upside (best case $5-10k base bump but will probably just take it out of your bonus) vs downside (worst case offer rescinded) and everything in between don't see this playing out well for you
Makes sense. I was just curious what norms were. Thank you for the perspective
depends on how low comp is. what is it?
130k base, 100% bonus target
Jesus man. I was expecting $200K all-in. That’s market/pretty good, you’ll get laughed at if you ask for a pay raise.
Suggest you step outside your “HYPS GS/MS/JPM” bubble and get some perspective.
130/130 is definitely upper range for a LMM fund. Around how large was their latest raise?
Negotiating comp to start is rough. Better to wait until you have at least a year of PE exp otherwise it's the old axiom of beggars can't be choosers from their POV (not that you're a beggar). The other option is getting an offer elsewhere and using it as leverage, but it sounds like this is the only offer you have currently?
If you really like the fund and the people, comp should be somewhat less of a factor to worry about this early in the game. Especially based on your other comment where it sounds like it's ~$260k all-in in which case that's not terrible by any means.
Seems like that’s the consensus - I definitely don’t have much leverage. And at the end of the day, marginal differences in comp aren’t a make or break issue, but I do send a lot of $$ back home, so it doesn’t hurt. Thank you for the reply!
From my perspective, that is market comp for Associate 1
Is $110k base and $70k bonus for a LMM way under market? Heard of people getting less than 100% of their bonus too.
110K base? isn't that AN1 at a BB? that seems under market
You shouldn't take an offer you aren't happy with. Maybe just keep recruiting? Fwiw, I had an offer from an UMM PE fund that was punching above my groups weight and did 2 years there and really regret it. Had bad experience, was treated poorly and I don't really respect the people I work with. Was considering declining it bc some reverse DD I did came back negative and was in other processes I wish I saw through
Quia quaerat voluptatum fuga ea impedit. Ab distinctio recusandae et. Similique repudiandae distinctio harum quo inventore molestiae tenetur.
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