PE offer with terrible pay
I’m an IBD associate 1 and I’ve been recruiting for PE probably since the day I started as an analyst, but I’ve had no luck at all. After 3 years of recruiting I’ve finally received my first PE offer at a $3bn fund but to my surprise it has absolutely terrible pay, like shockingly bad pay. They offer is for an Associate 1 position there with a pay package of $80k split like the below:
base: $70k
bonus: $10k
Considering my current associate total pay is above $250k it’s a huge pay cut. I asked about carried interest but they don’t offer this until more senior levels.
I don’t know what to do as it is a good fund where I would learn a lot and I’ve been recruiting for so long maybe this is the only offer I’ll ever get? It literally took me 3 years to finally get one but at the same time like what tf is this pay?!
I’m unsure why the pay is so low, could be due to low returns or due to the fact they have a lot of seniors/partners?
The low returns shouldn’t affect base or bonus as the fees are based on committed capital (invested post investment period). It could be that they hired more senior people like you mentioned.Sounds like you have been trying for a while. Have they provided an explanation for why the comp is so off market?If you can afford to take the pay cut then maybe you can lateral into another role once you are on the "inside".
Which PE firm is paying so atrociously below market, especially given its fund size? You should name drop and expose.
That’s insulting… independent sponsors, tiny family offices, and $80M funds in Cleveland pay better than that. Is this in the US? Would make more sense if international, or if it’s really an analyst position (though that’s still surprisingly low for an analyst at a $3bn fund)
Something is wrong with the fund if they're paying that low. Even a startup, independent sponsor type of fund, would have to pay more than that. I'm all for taking a paycut for the learning, but being so far away from market rates represents something is weird about the firm/position. They're either calling it an Associate role when it's really more of an Analyst role or they've outsourced hiring to someone who has no idea how the industry works. Anyone with even a general sense of how to hire in PE knows that a sub 100k offer isn't going to be competitive and is frankly insulting given that you went through the whole process with them, likely expecting an offer that is at least close to market.
I don't think there's any way you can take the offer without getting a really good understanding of why the pay is so low. Even then, I'd still turn it down. I'd go back to them and express excitement about the offer, but just say that the compensation seems below market based on what you've heard from the headhunters you're in contact with as well as Heidrick and Struggles and other reports you've seen and that you'd expect something in the ~$250k range based on the fund size for an A1. Unless they can get you to at least $150k+ or so and honestly, for a $3B fund, should be $200-250k or so, I'd pass and keep recruiting.
What's the market rate for a small 125 million fund (not tier 1/2 cities) for an analyst? Not many datapoints here.
There probably aren't good data points anywhere. I would imagine $70-85k base. Likely with no/low bonus after that, or if you're in a sourcing heavy role, bonus for deals you source. Assuming you have no investment experience and will be sourcing most of the time. If you're coming in from banking, perhaps a little more towards the $85k end of the spectrum. Non top tier city and only $125M AUM (assuming AUM and not most recent fund) and there just won't be that much money to pay folks.
Worked in this type of position - $70k base + $20k bonus. Very dependent on your ability to negotiate, any previous experience or other offers, etc. because it’s typically a one-off hire instead of a regular recruiting pipeline
You shouldn't even look at it. Keep looking for something and surely you will get a better opportunity
There is no way a "good" PE firm with a $3bn fund is offering $80K.
Sounds like K1
That's terrible, tell them to fuck off
almost the same thing happened to a friend of mine. for me it kinda seems like a new way to reject applicants lol
That’s atrociously low for a PE of that size and the market overall. Just echoing what everyone said. I would ask them as to why the comp is so low and then turn them down without blinking lmao.
What's the market rate for a small 125 million fund for an analyst? Not many datapoints here.
name and shame. is it k1?
That is a clown offer and you shouldn't accept it and make them very aware of why.
I have never heard of anywhere legit that pays remotely close to that level. Just tell them to pound sand. Pretty much all corp fin jobs pay more than that.
You should have slapped whoever verbally offered you that shitty offer.
It’s low because they clearly don’t give a shit about associates. They aren’t a 100M AUM firm that can’t afford to pay better. It’s a $3B shop that can afford to pay market and must know they are paying 1/3 market. It’s a clear fuck you to associates and is likely a solid indicator that there would be no effort to provide you a good learning experience.
Congrats on the first offer. I know it can be a grind, but this is not the offer to settle for. I’d focus on using this offer as leverage for other processes you’re in right now.
You’ve shown you can convert; you’ll get a better one.
What would be the market rate for a 100M fund?
That's just awful and says a lot about the culture. Keep recruiting
Turn it down, name and shame, and chew out your headhunter.
Counter at $275, then walk away
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