Pe MM associate comp
Does anyone have insight into average associate comp at a mm fund? I have heard of funds (latest ~$1b) paying first years $100k salary and $100k bonus. Is this normal? Does comp increase in your second year and by how much? Are bonuses guaranteed?
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Think it really depends on the city and number of funds in that city... I've heard of several offers in Tier 2 cities (Nashville, Atlanta and Austin) similar to that of a healthy first year IB analyst or a 2nd year IB analyst for funds that have $1B fund sizes. Has anyone heard of pre-MBA associates being allowed to co-invest in deals during their tenure up to a specified amount? What would this look like and is it a good way to be comp'd?
I work in one of the above markets. Can confirm that $200-240k all-in is standard for ~$2B+ funds. Just went through the co-invest process myself. DM me any questions.
Co-invest is fairly common, often fee free / carry free (or tax advantaged somehow). My firm offers it, and a lot of my other buddies at other firms have co-invest options too.
Thought MM PE comp was higher than that? Between 200k-250k all in? Check out the Heidrick & Struggles Compensation Report to confirm
I would say $100k base + $100k bonus is pretty standard for PE shops that have a ~$1bn latest fund, at least in cities outside of NYC and SF. For NYC and SF, it may be funds that are in the ~$750mm to ~$1bn range simply due to the increased COL. My future shop will be this comp level. The latest fund is ~$1bn, outside of NYC. Most of industry contacts have told me similar comp for MM funds.
Quite frankly, it does seem slightly below the comp reports that are released by sources such as GoBuyside and Heidrick & Struggles, but given the incredibly uncertainly with the pandemic, I don't think many will complain.
In terms of size distinction for recently raised PE funds, would $1b-$5b fall into the MM range? Or does this start to reach the UMM range?
`~$3bn is the start of UMM
I think it depends who you ask. I know bellcast defines it as 5bn-10bn from their recruiting guide
This sounds directionally accurate, yes. $100k, plus another 100-150% as a first year. I think co-invest is pretty rare in these scenarios too, but someone can correct me if I am wrong.
Yeah, 200-250 is a normal range for PE I would say, with 200 solid comp for non-T1 cities and what I'd classify as low in a T1 city. 250 is considered on the higher end of the range (or was when I was recruiting). 2 comp packages I got were 100 base + 150 target bonus and 135 base + 100 target bonus, both in T1 cities.
Would T1 cities include Chicago/Houston?
IMO this was really from the perspective of COL, so most relevant to SF / LA / NY given how expensive it is to live in those places. Maybe Boston might qualify? Chicago I'd put in this like weird middle area where some places will match pay on the coasts (probably for like talent attraction / retention reasons), but others will lowball by justifying via being in the Midwest and lower COL.
But a place like Denver for example, I don't think you should be expecting 250, if anything closer to the 200 range.
Too true what NuclearPenguins is saying. Partners Group USA is based in Denver and pay's their analyst program 75k base, and associates are making between 150 - 200 all in... That said COL is probably 3/4 or 4/5 what it is in NYC/SF.
For Denver, have also heard 180-200 for first year associates at places like Excellere and Mountaingate
Analyst program is 95k base btw. Other numbers are accurate +/- 10k.
What is the ramp in comp like vs. UMM/MF (just talking about base and cash bonus, recognizing that there are differences in when you get carry and MBA required or not)?
100k+100k+some other comp (co-invest, discretionary bonuses, etc.) – let's call it ~225k in total value – is pretty standard for reputable MMs in non-NY/SF/etc. cities.
100k base, 150k bonus is standard for reputable MM in NY / SF / etc. cities? Or still low?
That seems about right. I've gotten the sense that comp range is much wider (even at similar firm size) for big cities.
See my comment above - certainly not low, if anything on higher end of range.
Some data points from my recruiting cycle:
Current UMM PE (Tier 1 city outside of NYC): $280 - $300 all-in Hedge Fund Offer (Tier 2 city): $100 base / $100 target bonus Hedge Fund Offer 2 (NYC): $125 base / $125 - $175 bonus target bonus
Confirming non-nyc umm
Is this for first year PE associate and hedge fund analyst?
Hedge fund ($3bn AUM, NYC): $125 base / $100 target bonus - is this below average?
In-line with PE.
How much does comp increase in the second year? Is it relatively constant?
Really curious about this as well. My offer letter did not include anything regarding a raise, but I would assume it will be a possibility? Would love to hear what others have experienced or seen.
Really hard to generalize. My firm gave associates a $5k salary bump (effectively $10k with target bonus) every year, but I had a buddy at another firm that got $25k a year. I’ve even heard of places that hold your salary flat but increase your target bonus every year.
Just got an offer for family office for $110 base / $85 target bonus in NY - what do you guys think?
what tier city?
How big of a family office? ~$200 all in isn’t terrible if it’s a smallish office and you have a good lifestyle but if it’s an MSD type place that competes with UMM funds, I’d want at least $250
Really depends on the family office. How much AUM and how much being deployed every year? Also what type of deals are they doing?
Received an offer from a MM firm (last fund size $2-$3bn) in a Tier 1 city with 125k base, and was told over the phone by principal that target bonus is 125k. Offer letter doesn’t mention target bonus at all, should I be worried at all?
Nah I wouldn’t worry about it
Do people think the current economic environment will have a negative impact on associate comp? Or is the comp (bass + bonus) pretty stable since private equity firms fees on their funds doesn’t vary year to year?
Prob won't see any increases but I highly doubt there's too much of an impact. Base + target bonus won't change because they're paid out of fees, but at the margin you may see fewer people getting above-target bonuses because there isn't as much carry generated from exits (speaking from my fund at least where associates would get an extra bump come bonus season if it was a good carry year)
Special Sits MM Fund - Midwest - Year 1 Comp is 80k Base, 20k Relocation, 100 Bonus. Confirmed with a second year that Base in Year 2 is 100k. No co-invest until VP.
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