Negotiating PE offer
Need some advice from the community. Was laid off a few months ago from MM PE firm and just landed a UMM/MF PE offer. $250K total comp for high COL city, a bit below what I've seen from friends, industry comp surveys etc. Was hoping for $275-300K...seeing a range of $275-325K for similar roles and experience. I landed on the buyside out of undergrad and have 3 YOE in PE, so more than the typical IB candidate I imagine.
What is my negotiating power here? Is it zero b/c of the layoff and no other offers? The only thing I have to pitch is I did 3 years of nearly the exact same thing in my previous role.
Exploding offer, am in final stages with a few other shops, will unlikely hear back from them before the deadline, also in lower COL cities, so maybe be similar total comp at the end of it anyways. I don't want my offer to get rescinded because I tried to negotiate, but I also don't want to get taken advantage of..this is my top choice.
Thanks for your help everyone..
Yeah for an UMM/MF that seems pretty low. Im at 250-260 TC as a first year associate at a LCOL 650mm fund lol, thought closer to ~300 was market for the fund you're looking at.
yeah :/ I mean they are aware of my situation so maybe that's why...idk if I should say something, I don't have any other offers.
given your situation I suppose you may not be in the best position of leverage, I would think a likely scenario that could pan out is eat the cut for your first 6 months or so then come back to the table, and renegotiate armed with some experience with the firm and data points of the comp of the other associates in your group.
What's career progression like in these sorts of funds?
As long as you aren't obnoxious about how you say it, I see no issue with asking to have a call with whatever person you've been interfacing with and telling them "I've reviewed the offer and I'm really excited at the prospect of working at Firm; however, I was a little surprised by the compensation number. Based on my experience, as well as where similar firms are, I would have expected compensation to be a little higher. Is there any room for negotiation?"
See what they say. Don't be a dick about it. If you are respectful, there is a 0% chance your offer gets pulled. if you are aggressive, there still a very low probability of them pulling your offer.
They will most likely either tell you to go fuck yourself and take the offer or leave it, but they might be open to negotiating a higher base (at the expense of a lower bonus to keep the all-in the same) or (less likely) they may be willing to bump you up a little bit. If they tell you can either say "ok no problem" and then sign or you can push them to walk you through how the comp scales since you think the comp is low.
Thoughtful and insightful response thank you
Great response. Saved this incase I’m ever in this situation.
The only thing you can really do is just be polite and ask isn’t it? I don’t even think I would want to work for a firm that would actually pull an offer from a candidate for discussing compensation within reason. That’s real toxic and everyone in this business knows damn well you only get what you deserve if you inevitably push for it.
$250k offer at a UMM/MF? That wild, all my friends at MF are ballpark $350k (+/- $25k)
For associate 1? That is what I assume I'll be
Maybe benchmark against people who work there? If the entire shop underpays you might as well not bother trying as you’ll spend a bullet for nothing
You have no current job and were fired from your old gig. You now have secured a job at a mega fund in PE, so likely a sterling name for your resume.
And in this tough recruiting environment, you want to try to negotiate an extra 25k a year?
Sounds logical.
This was my gut reaction as well. Appreciate the perspective
Smoke, you don't need the extra $25k - your parents/in-laws give you $25k every week...To other people, $25k is a meaningful amount of money.
Jk - I'm completely on Smoke's side here. OP, if you're as good/experienced as you suggest, the firm will bump you to market at year-end.
Hey, just cause I’m arrogant and a douche doesn’t mean I don’t give sound advice. Separate the man from the message!
Rare smoke frog W
Go back and renegotiate. $250k is low for an AS1 and someone with your experience. If they are recruiting someone for right now (immediate start) it's likely because they are short staffed and they need someone asap so they aren't going to rescind your offer and go back to the drawing table for another associate (could set them back another few months if they don't have a strong back up (esp. if they are not in NY)). You could even lie and say "while I am truly excited about this opportunity, I am expecting an offer with another firm end of this week and they quoted a comp of $275k (Note: Do not disclose the city or firm).
As others said, don't be an asshole about it but bring up valid points 1. based off your friends and other opportunities this is not market 2. you are in the final stages of a few other processes (this will scare them and want to close you).
Remember, it's not easy to get an offer. You need to pass a lot of bars and get a majority of the team to reach a consensus on your candidacy. They won't want to lose you that easily. Don't let them take advantage of you just because you got laid off.
Personally lean towards you have zero negotiating power given the layoff and $25k is a really silly amount of money to lose a MF offer over.
You will be a bit under market comp for 6 months or a year and then will be aligned to whatever the firm's default ASO2 salary is. I would think long term here, your earnings power will be far greater here than your other offers... take the offer and run.
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