Principal comp
What’s good comp for a 1st year principal at a umm and at an mf? 700-750 cash and 8-12m carry seem ok or light? Cash seems light?
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Do you mean as theoretical comp as a Year 1 Principal, assuming the fund gets deployed in one year (or said differently, DAW / carry bps stays constant throughout the deployment phase of the fund), or as an average annual comp on the first fund post promotion (say 3-4 years)?
For the former its very good comp, for the second its what I would expect(ish). Cash does not seem light in either case, no.
Year 1 with perhaps 5-8% raises so average comp over a 3-4 year period would be similar maybe 15% higher cash. Yes daw fixed for life of fund.
Im just seeing mega cap and umm vps making 600-675 so 725 for principal seems light. Shouldn’t it be 800+?
Any insights into Carry for VPs (comparing to the 8-10 for Principals)?
And just to confirm, VP = 3-4yrs PE experience and Principal = 6-7yrs PE experience?
What is a DAW?
Dollars at Work. Typically the amount you receive if the fund hits 2.0x MOIC
What kind of vest would a principal have here?
I would think montcler at least. Patagonia seems analyst level
Depends on fund size. This is a good resource on comp by level by fund size: https://www.heidrick.com/-/media/heidrickcom/publications-and-reports/2021-north-america-pe-compensation-survey.pdf
Importantly, you need to consider the firm's track record to appropriately value carry. I've seen multiple people join funds and receive big carry dollars/bps on paper but the funds never hit 2x MOIC so the cash never materialized. On the flip side, if you 3x a fund, the actual cash carry paid would double vs. traditional 2x MOIC assumption. This is how comp really ratchets up
Finally, many firms have additional kickers for closing deals, selling portcos, fundraising, etc. which can skew the numbers higher/lower depending on your performance and contribution to the firm
Thanks. Awesome answer.
Off topic but is there a 2021 HS report available? $s moved a lot end of last year
lmfao
??
U make way more at Moelis / CVP type bank.
Cash or also incl annualized discounted carry adj for superior tax treatment?
what about lazard and evercore?
I’m new here. But in what fucking world is 700k ‘light’. Also if principals are making that much (10mm carry) how much are the partners making?!
Also is this per year or per deal?
Lol this would be per fund so like per ~4 years. And 700k can be light if VPs are out here making 600-650k at large cap funds...
For large cap, I think it’s 600-700 for VP1 cash comp with carry and steps up to $1-2mm cash comp for Principals / Partners. Carry obviously differs a lot but that’s at least the cash portion do it.
Think that’s a bit rich. VP1 closer to 500-600, VP2/3 agree in 650-700 range.
Thanks, very helpful. Any insights on Carry at all?
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