PE founder vs MF PE Partner
In regards to the compensation economics, which has better carried interest economics? The founder of a $1 bn private equity firm or a rockstar partner at a top 5 MF ($80+ bn in total AUM across the PE strategy)I would assume it’s a MF partner, no?
Founder 9 times out of 10. Owning the management company > a few checks of carry.
So much of the answer depends on performance and you’re probably more likely to have a 7/8x fund with a smaller fund. It’s just easier to turn $1B into $8B then it is to turn $25B into $200B (everything from exits being other private buyers at the smaller end to IPOs at the larger - which are harder to get your money out of, to smaller deals often being cheaper - but there is more competition for smaller companies as well… not as many people can do $12B deals). There are just a lot of variables to consider.
But say they both 3.0x a founder at a $1B fund probably gets 50% of the carry( $200M), a top partner on a $25B fund gets ~2.5% of the carry and that might be aggressive ($250M)
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