Negotiating comp (London)
Received an Associate 1 offer to join LMM PE fund (80k base, 50% bonus). Is this fine to negotiate as materially below market comp?
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Perhaps… but Be honest with yourself, is the fund strong in the LMM? How has it performed relative to market & how big is it? Would you really expect them to meet market pay?
If it’s your only offer where else can you go. I know a chap from my uni who got MM PE offer rescinded after purely asking for a discussion on pay.
It’s a first fund raise, so performance TBC.
Well, no offence, but there’s your answer.
It’d be extremely rare for a fresh fund to be dishing out highly attractive comp.
Given it’s a first fund you could try and ask for some wiggle room, but it’s your own decision to weigh up their other opportunities & patience/tolerance for comp discussion prior to you having done a days work. Perhaps ask for a review to be written into your contract post 6 months of work.
That's market dude...
Welcome to London!
Yes in LMM
not other places…
Large cap pays Analysts like 80-90k + 100%. Associates look at ~200-250 and can even reach 300k total comp.
MM itself is also different & typically higher
Obviously somewhere with larger management fee will pay more cash comp. It’s not a like for like for comparison
No point in MM PE in London
Becuase all JAMMBO or something else?
Comp materially below IB with little chance of receiving meaningful carry which is getting even less likely going forward. Idk why you'd leave IB for it unless you love PE/hate IB or need better WLB.
I run a search firm, Melrose Partners. Typically there is very little room to negotiate at the junior level. Sadly LMM funds don't pay that well. The best negotiation tactic is to sit on the offer, give them a positive message ie 'love the firm, investment style, people etc'. But 'I need to think it over as the comp isn't what I was expecting'. If they can pay you more, they will. I would not advise asking for a specific figure. No one likes to be told what to do. If you want to mention figures then do this subtly e.g. 'my impression was this range because of the XYZ salary survey'. The Heidrick survey might help. If you're junior and have 1-2 years full time experience then you still have time to get into PE. Generally most funds hire woth 1 - 3 years full time experience. I suspect that's the same for you given the salary range. Hope this helps.
Given your experience, would you be willing to share cash comp bands in PE in London for different levels of seniority to anchor expectations?
The range to join as an Associate in PE is fairly big, but here here's a guide. For smaller funds it's around £150k total comp. The largest funds can pay around £350k total comp. Usually its 50/50 with bigger funds for base/bonus (or close to that). Smaller funds tend to have a higher base with bonus being 50-75%. Base and bonus depends on the firm. Generally, the larger the fund and the leaner the firm, the higher the pay. At the end of the day it's down to the firm. You may also get lower overall cash comp if the fund pays out carry on a deal by deal basis.
Very useful info. Would you also have some numbers for the levels after (VP, Principal, etc.)?
That's market for London LMM PE - heck even most MM's pay like £80-£90k base like LB, Bowmark etc afaik
Exactly - this is spot on
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