Given all the noise around increasing ibanking junior pay on the street, has there been any discussions / any expectations that the buyside will follow suit?
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Why will the buy-side follow suit? For most roles on the buy-side, you're already making much more money than in banking or are getting some sort of benefit over a banking role. Most people make the move for the learning opportunities because they want to have skin in the game, and ideally have better hours and/or more interesting work.
What are you on? Bankers make more all-in than most PE up until like VP/Principal and carry starts getting allocated. Even then, that shit takes time.
The PE analysts I knew were making much more in PE than in banking. I personally knew two analysts who were making 140-180k all in and when they moved to PE their earnings went up to 250-300k, with the additional benefit of doing less bitch work and working with nicer people.
This whole argument needs to die a fiery death. You will make less money moving from banking to PE until you're a VP and start seeing carry hits roll through. Universally. Maybe you get a pay bump from IB Analyst to PE Associate, but that is very unlikely if you're a top performing analyst. Also ignores the fact that you would likely be an A2A candidate and IB Associates have made more than PE for years now. You don't make this move for immediate compensation increases.
I think this conversation has a lot of general assumptions. For example, if you’re an Analyst at GS, you get paid terribly for two years so most PE firms that you’ll go (e.g., UMM / MF) will be a step up in comp (even if you factor in the fact that you become an AS0 at GS your third year). I’m generalizing here, but if you’re at GS, you likely won’t be exiting to some random no name MM PE firm that pays at the lower end of market. To sweeten the transition, GS pays Associates poorly as well.
It’a obviously a different story when you go to a place like Baird or Harris Williams that pays really well across the board (Analyst to Associate), but your exit options are pretty strictly LMM / MM PE. Let’s face it. If you’re in MM banking, you’re probably not getting that job at Apollo / Blackstone / KKR or even other UMM funds.
The EB to PE move is a lot more nuanced. I generally found that if you’re at a place like Evercore or PJT, the outcomes can vary a lot depending on the PE firm you exit to. So I would say at those firms, it might be far better from a compensation standpoint to become an Associate if your only other option is a LMM / MM PE fund.
I say all of this because the answer is very nuanced depending on someone’s specific circumstances. You can’t just generalize and say IB pays more than PE without adding in qualifiers. Half of the compensation data on WSO is wrong for PE firms given my experience.
Also there is no shortage of kids who will chase the preftjizz of buyside so frankly there is 0 reason for PE to up comp for juniors. PE associates are mostly 2 or 3 and out... why pay more? Do you think some kid is going to turn down a MF or UMM fund or even a decent PE fund because they are "only" paying $250k and they could stay in banking and make $300k
I don't quite agree with this argument...is it true? Yeah, likely. I know for a fact that there were plenty of similar comments around IB analysts' bases being increased a couple months ago...and look at how the Street has responded now. It's not always about what employers could potentially get away with, especially with talent being at a premium.
I think PE associate pay has to go up. There’s already been a trend in recent years of banking analysts realizing PE can have hours just as bad as banking and with more stressful work, so those who like their groups (or fear of the unknown) stayed on as A2As. As the pay difference increases the big PE funds will definitely worry about missing out on the best performers. At the end of the day everyone in this field is deeply economically motivated and short term compensation is a huge incentive.
Agreed. And it's not like paying your associates $300k instead of $250k is going to make a difference for a decently sized fund. Eventually PE associate pay will catch up, but given how much more fragmented the PE landscape is, funds might just be slower to move than banks.
Yes, many are now realizing that the lifestyle really isn't that much better, especially during your junior years. However, rest assured, there is absolutely no shortage of talent fighting for the limited seats in the space. Can easily get over 400 resumes just for an analyst role. Associate roles can easily bring in 50+ candidates that are all of very similar quality. The demand/supply relationship has not inverted by any means.
does lifestyle get better as you hit vp in buyside? Thinking of going to lmm, but during deals, my vp's are up till midnight regularly grinding
bumping this - any word out there how associate comp out there performed relative to last year?
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