PE Associate Comp Negotiation
Hi all,
I was wondering if any of you have ever negotiated your comp upwards for Private Equity Associate 1 roles - I know it is probably super uncommon but I’m interested in hearing if it is just difficult or close to impossible; in investment banking, the compensation is so standardized that you have basically no power to negotiate. I am looking to recruit for PE in a ~T2/T3 city which traditionally comps a bit lower based on COL and am wondering if there is room to budge on salary/bonus.
Any help would be awesome. Thanks!
lol no
Was assuming this
However, there are a couple very small funds in my city - likely targeting the larger funds but was wondering if any of the less sought after firms would maybe be more flexible
Guess the big thing is that PE is so competitive that they could lower the comp and people would still accept the offer
You can try asking for like 10k more, but they may tell you to kick rocks. Especially if you have a personal reason for wanting to be in that city and they know there's not many funds there.
In a lower COL city you're not going to get anywhere near the numbers you see for MFs in NYC. And don't forget they are managing comp for an entire team and don't want to set a precedent with you and then bring future ASO1s in below you, or have you making close to or more than more senior ASOs.
Totally - was more leaning towards thinking about negotiating for an extra ~$10-25k if the comp is lower than expected. The “setting a precedent” part is definitely the big factor here.
Not expecting MF comp as I know that does not exist in my target city. High end is probably $290-310 for ASO1 with a majority probably sitting a bit lower at ~$250ish. Just wanted to see if anyone had tried negotiating - if I interview for a firm that I really like but they pay less than ~$250 or so, it will be tough for me to leave my IB gig given it would be just 1yr until ASO1 (3yr analyst program) which would be $360k guaranteed.
You never know if you don't ask. For everyone's feedback in this thread, you may have an edge case where you get lucky. If you have rapport with the hiring team / new fund at this point, it may be worth trying to negotiate - share the banking numbers as a data point in a polite manner. At the end of the day, if they don't budge, you may want to get another year of banking done.
After my first stint in PE, I spent a couple of years in corp dev. I was making $250k all in at a traditional 9-5 in a T1 city (I think LA is T1, anyways). I went back into PE at the ASO level again and was moving to a T3 city in the middle of nowhere which somehow had T1.5-T.2 living costs in certain areas (can't add color here, just trust me lol). They were offering me 225k all in. I tried to get them to $300k as I was comparing the role to other ASO roles on the west coast which were at the $300k-ish level with carry. They only got me to $250k, and told me the CIO would absolutely refuse to go higher as at the ASO level during his career he didn't make that much. Ended up working twice as much for the same compensation as my corp dev opportunity lol. Worth it though, grateful for the experience and relationships.
My point here is, in sub-optimal geographies PE firms at the junior level may not budge beyond the $10-$25k range on compensation. You can always try and negotiate carried interest earlier in the fund and help to build long-term alignment.
Generally no. Can maybe squeeze out an extra $10-15k if you have another offer that’s higher but be willing to be told to pound sand. If you’re relocating you can definitely ask for them to cover moving costs ($5-15k is reasonable) if they aren’t already.
Assumed so. Thanks!
I've honestly rarely heard anyone been succesful at (at least in my inner circle) negotiating anything meanginful at the associate (or even VP) level given how much competition there is.
Most relaistic scenario is that you can probably ask for $10k relocation bonus and most would give you in cash. I was able to 'haggle' $15k through that even though they wouldn't budge on salary/signing bonus
Unless you're joining a first time fund and/or sole associate at the firm, pretty much no.
Even if it's possible otherwise, it's not worth the social capital that you're expending IMO to get an extra $10-20k (pocket change over a career). Better off keeping your head down, crushing the role, and clipping an outsized bonus that you earned, than asking for more upfront when there are plenty of analysts clamoring for each associate seat.
Relo / sign on is where you'll likely be able to get them to move.
Thanks!
I negotiated my senior associate comp at a new fund, and successfully negotiated a pay raise above what others at my level were getting at the associate level at my prior established fund.
I think It’s a much easier position if you can use comp studies to point to them paying below market. Idk that size of funds you’re targeting, but for a $500mm-$1bn fund in a tier 2 or 3 city, ~240-275 feels about market, so would orient your expectations accordingly.
Thanks for the intel - I think pointing to market studies is a great idea.
My expectations aren’t super high, just don’t want to have to choose to not be at one of the funds in my city that would be a better culture fit over comp.
Not meaningfully. Though I have seen a peer of mine lean in too hard on trying to negotiate and they got their offer pulled with the fund going with their alternate candidate. They then weren't able to find another investing role.
Focus on getting in the right seat that will be the right choice for your career. Marginal increase in AS1 comp will be a rounding error.
I negotiated a sign on bonus that was in the range of $100k arguing it'll go to my MBA debt + I was missing out on half year of bonus from my consulting gig I'd be leaving (would only have been $20k but hey...). That is the only thing you can really negotiate imho.
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