PE Junior Comp is Light

I'm coming from a top BB IB. I have an offer for a MF PC role, and after seeing the Top BB IB bonuses, I'm contemplating on whether or not it's worth it to make the jump to PE/PC at this level. It seems that the value has been moved further up the stack to the VP level, only because there's carry there, on cash you're still getting beat. BB Assoc1 getting 400k+ while MF PE/PC  paying 300k (after raises) seems like robbery, and they have to be aware of this. Money is usually not the driving factor for me, but damn PE juniors comp are usually on par, but now they're really dragging their feet (maybe just because they can).

Comments (74)

  • Associate 3 in PE - LBOs
Jan 24, 2022 - 2:23pm

Whole heartedly agree - PE comp will be slower to move but I think it will have to move at some point to stay competitive.  It's one thing to swallow going from a BB to a MM/LMM fund with (hopefully) a better lifestyle but no way I would jump to a MF working the same/worse hours for materially lower comp and banking-esque culture and work

  • Associate 1 in PE - LBOs
Jan 24, 2022 - 8:36pm

Really need to dispel this myth about places like Apollo and WP. It's the same as banking in that there are bad periods, but it's not as bad as people make it out to be on WSO. Please don't use posts on WSO to decide your career move. Most are college kids or 1st year banking analysts regurgitating the one post they saw about how life is so bad at Apollo, WP, etc. 

  • Analyst 1 in HF - Event
Jan 24, 2022 - 2:48pm

Agree, it's not feasible for more work and more stress.HERES THE KICKER, so MANY shops are 2 and out. So what's the ficking point of getting slaughtered with a pay CUT if the idea is comp is weighted to the end of your career, if you're NOT getting a shot to stay on really?Yeah at that point in career KKR doesn't have the name brand of GS or Harvard to warrant that sacrifice like cmon (though pretty sure KKR specifically pays well though). At that point you need to shell out the $$$ cause that's what people fucking care about if they're making such a sacrifice.

  • Analyst 2 in IB - Gen
Jan 24, 2022 - 8:22pm

I agree, not worth it if it's a 2-n-out program, but I asked specifically about that, and luckily most PC roles at these funds are not 2-n-out. I'd disagree on name brand though, a KKR/Apollo/BX carry the same weight in an investing seat and most likely more weight than an IB analyst/associate role. However, KKR is one of the MFs paying 300k, so they need to step their shit up too.

  • Analyst 1 in IB - Gen
Jan 25, 2022 - 10:50am

In a similar boat. Joining a MF in PC and all in comp is directed to ~$300k year 1. Most frustrating is the disparity in base comp vs banking that only gets materially wider every year (175 -> 200 -> 225 in banking, which outpaces buy side bases by a wide margin [~75k by year 3]). After banking bonuses, starting to wonder if it was smart to walk away from that kind of money, especially since most MF PC roles aren't offering any meaningful carry or co-invest and not all are career track. Hoping they at least match IBD base comp soon, but im not holding my breath...

Jan 24, 2022 - 9:28pm
Smoke Frog, what's your opinion? Comment below:

I know, these kids are so deluded.

I'm sure pe firms will read this thread and immediately increase their comp.

Most Helpful
Jan 25, 2022 - 1:26am
Z1196, what's your opinion? Comment below:

This totally feels like the right time to double down on a violently cyclical industry versus moving to one whose revenue model is based on multi-decade contracts. After all, it Should be easy to maintain that bonus pool at '21 levels with no equity / spac fees in the mix. 

  • Analyst 2 in IB-M&A
Jan 26, 2022 - 4:11pm

This is the real kicker. People are taking this year's bonuses and extrapolating for the next 5-10 years. They are completely ignoring that the last 12-18 months have been a RECORD period for dealmaking and that we are unlikely to see this environment continue.

  • Associate 1 in IB - Gen
Jan 25, 2022 - 11:00am

Part of the "problem" is that PE firms (and years of associates prior) have espoused how much better PE is than banking. If that's the case, then they don't have to compete on comp to attract people. There are a plethora of posts on here about how the investor mindset is so much more prevalent than in IB, hours are better (some places), more control over your time etc. Obviously, they could raise comp to be at or above IB but I doubt they feel the need to do so since PE is a differentiated product vs. IB.

  • Analyst 2 in IB - Cov
Jan 25, 2022 - 11:30pm

This is the exact pitch I heard from the recruiter and the MM PE firm I received an offer from. They also tried to make the argument that although their associate pay is materially less than being an associate in IB, it is still a pay bump from being an A2, so should be viewed favorably. It is as if they aren't even pretending to compete against associate level comp…

Jan 26, 2022 - 8:52pm
DealTech, what's your opinion? Comment below:

I'm a decade out of IB - is an Associate 1 at a bank the equivalent of a 1st year Associate in PE (ie, are banks now promoting >50% of analysts to associates right after the 2 year program ends)? 

A decade a ago:

1st Year PE Associate - 2 years post-grad

1st Year IB Associate - 3+ years post-grad (3 year analyst program or post-MBA)

  • 1
  • Analyst 2 in IB-M&A
Jan 26, 2022 - 4:15pm

lmao, MM PE in LDN still paying 80k base + 50-100% bonus

makes a big difference when your competition for buyside seats is Big 4 accountants getting paid GBP45k

US MF is obviously a different story though

  • Intern in RE - Comm
Jan 27, 2022 - 5:10am

Hahaha good point about the Big 4 accountants, should've clarified was referring to US MFs

  • Intern in IB - Cov
Jan 26, 2022 - 8:09am

Are people planning to go back to IB from PC?

  • Analyst 2 in IB - Cov
Jan 26, 2022 - 11:19am

Wondering what acceptable comp for an ASO 1 PE gig should be now? I'm actively in 2 off cycle processes for summer 2022 start and wonder what I should even attempt to try and leverage for.. current market is like 125-135k salary with 75-90% bonus implying ~215k - 260k TC right?  With IB associates coming in around 300k+ what should we be arguing for? I understand a discount to IB is to be expected, but how much of a discount has been the historical standard? 

Jan 26, 2022 - 4:51pm
chihayafull, what's your opinion? Comment below:

Based on data points from peers pre-COVID/IB comp raise:

MM PE was in the range of 220-275k, so call it ~250K average cash TC. Associate 1 cash pay at EBs was ~300K or more depending on shop. So the discount was something like ~15-20% cash discount for presumably a "better, more interesting job."

MFs may be raising pay, but MM landscape is really scattered and this slow moving, and I'm not sure how they'd feel if you came asking for $300k+

  • Analyst 2 in IB - Cov
Jan 26, 2022 - 5:15pm

Thanks for the insights, I would be more than happy with 240k-275k TC at a MM moving to a more interesting line of work and opportunity for differentiated skillset development, that's the trade-off that's always been here right? Guess I'm still 23 and the idea of making that type of money next year is hard to wrap my head around regardless of what "market" should be now. I mean every friend/contact I've talked to in PE has absolutely no regrets and the only one I've seen go back is because he didn't get the VP promote.    

  • Associate 1 in S&T - FI
Jan 27, 2022 - 9:08am

I'm at MM/LMM credit and have 250k cash comp with 100bps of carry.

Taking a hit on cash comp but this banking gravy train isn't going to last. And buyside comp potential I think outweighs sell side by a landslide.

Yeah it's a lot of $$ to keep on the table but I certainly don't even need 250k to eat. No family or kids to support so I'm fine with taking a short term cut.

  • Analyst 1 in IB-M&A
Jan 27, 2022 - 10:18am

100bps as a 1st year associate? That is awesome! Is this common in PC? Have never heard of a PE associate with 100bps

  • Associate 1 in S&T - FI
Jan 27, 2022 - 1:27pm

came on as a seasoned associate so this would be for 2nd year. Kinda unclear 

Jan 27, 2022 - 2:20pm
StrategyJunkie, what's your opinion? Comment below:

Completely agree here. Yes, maybe you're taking a hit on comp but $25-50k difference isn't going to materially change your life. What will be "life changing", is if your carry (which I understand you won't get until sr associate/VP level) hits. Again, that doesn't hit year 1 but it does start to vest so once you factor in annualized carry, the numbers are at the very least even. 

The much bigger thing to think about is what you like to do. Do you like banking (execution, pitching, sales, etc.) or PE (some of the banking aspects but also getting in bed with management teams over 3-7 years and trying to figure out how to grow a business). There are pro's and con's to each but they are different, especially at the senior levels which is what you're setting yourself up for when you leave banking and go to PE after your analyst years. 

Jan 27, 2022 - 10:58am
guyfromct, what's your opinion? Comment below:

A lot of these comments are incredibly short sighted. The question is do you want to be a banker or an investor. People who are going to make the most have an affinity for what they do. Remember a good banker is likely to make more than a middling PE guy and is more likely to have more tenure in the industry.

  • Associate 1 in S&T - FI
Jan 27, 2022 - 11:40am

I can echo this. Truthfully just a little tired of pumping deals out left and right on the sell side desk. Being an investor seems a bit more interesting to me. Plus nothin to say I can't jump to another bigger buyside shop in a few years and get better comp if I want. I'm an associate on the sell side now so if I don't move over soon, no buyside shop is going to pay me sell side VP money without investing experience.

Jan 27, 2022 - 1:28pm
frenchstudent, what's your opinion? Comment below:

Have a balanced life, folks. Go to a shop that pays you decent, respects you, your opinion, your health and your life. Sleep enough, go to the gym and don't work weekends too often. The incremental £€$ is not worth it. You're making many multiples of your age group's comp in any case.

Mar 25, 2022 - 3:46am
frenchstudent, what's your opinion? Comment below:

What is beta about keeping fit, having good times with your friends and still earnings good money? You want to earn 100k more and be a miserable, pasty, skinny fat slob all in the name of "prestige"?

  • Associate 1 in CB
Mar 21, 2022 - 12:39am

Do people think the $400k for Asso 1 is here to stay for IB? Last year was a great year with shit tons of deals. Bankers got comped for the good performance. PE/PC gets the steady stream of AUM fees so the pay should be more steady and slower to bump for sure but I'm guessing banking pay will come down next year given the slow deal flow. On top of pay, PC hours are better generally so that's something to consider as well.

Mar 24, 2022 - 7:12am
TheEmperor, what's your opinion? Comment below:

It seems to me like the delta between LMM and MF is only increasing.

PE junior comp was light for MM pre-pandemic, and it seems like MF/UMM firms are the only ones trying to keep pace with increased base + bonus in IB

MF > EB > UMM > BB > MM and below

  • Associate 3 in PE - LBOs
Mar 24, 2022 - 9:01am

Would largely agree - recently received a LMM VP offer and was shocked at how little the comp packages for <$1bn funds have moved over the past 5 years.  I get that the MF/UMM world comes with longer hours, but even corp. dev comp has moved up accordingly and in some cases, is better than LMM PE.  And sure, you can hang your hat on greater stability, etc. but let's not kid ourselves that PE is also a highly cyclical industry.

  • Intern in IB - Cov
Mar 25, 2022 - 7:13am

MF comp is higher than EB comp? And UMM comp is higher than BB comp? Where are you seeing this

  • Analyst 1 in IB-M&A
Mar 24, 2022 - 12:28pm

Received a few different lmm pe offers for associate roles, all T2 and T3 cities:

100 base, 100 bonus

100 base, ~125 bonus (110-150 range), and coinvest

100 base, 80 bonus

  • Prospect in IB-M&A
Mar 24, 2022 - 2:32pm

Any insight on what hours/career progression look like at those firms? Assume its worth the paycut to an extent if in a LCOL and potential to go VP and above with manageable hours where carry leads to material comp bump?

  • Associate 3 in PE - LBOs
Mar 24, 2022 - 4:28pm

It's really going to vary - I have buddies at sub-$400mm funds pulling +70 hours pretty consistently while others are more in the ~50-60 range (sometimes dipping to 40 during slow periods).  Biggest two factors for career progression are MBA requirement and deployment/fundraising pace (partners are not going to be aggressively adding headcount / opening up the carry pool unless it means the carry dollars are getting larger).  

Mar 26, 2022 - 1:23pm
carbutt, what's your opinion? Comment below:

- The 100 base/bonus shop is in a lcol city and hours are about 50-60/wk with opportunity to move up

- 100 base and higher bonus shop is in a LCOL city, and more grindy and more variable in hours, can get up to 80-100 during the last week of a deal closing but has some weeks where you're doing 20 hours. Call it 60-70 average. And definitely huge support in moving up internally, 2 year program to senior associate vs 3yr at the above

- 100 base 80 bonus is medium cost of living city, 65/70 hrs a week, pretty old school minded partners and promotion from within is possible but still b school very much encouraged

Mar 26, 2022 - 9:01am
TheBuellerBanker, what's your opinion? Comment below:

Man if bank management could see this they'd shit their pants in happiness. The whole schtick of raising salaries astronomically high was to stoke doubt the way you have for people who are on the fence for going to the buyside. 

PE associates will likely not see much bump in the near term imo. PE firms recognize that the role is totally different and have no real onus to match on pay since people will always want to move out of banking into the buyside. Sure they might raise if they realize that the banking salaries are retaining top talent and causing some brain drain for them but I think those who actually want to be on the investing side will still take the roles if offered. Plus PE comes with the idea that your comp will be exponentially higher as you progress and begin to earn carry. And let's also not forget, even as it stands, you'll be paid well in PE, it's just that banking is ridiculously higher compared to most funds (excl MFs or some UMMs)

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  • Analyst 2 in IB - Gen
Apr 3, 2022 - 10:16am

After seeing what others are getting at UMMs and MFs now. The MF role I recently joined makes me feel underpaid. I'm not gonna hop ship and look for an exit or anything, this is a dream job for me, but still don't like feeling underpaid especially when this is historically one of the highest paying shops on the street.

Apr 21, 2022 - 4:47am
TheBuellerBanker, what's your opinion? Comment below:

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  • Analyst 2 in IB - Gen
Apr 3, 2022 - 10:09am

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