Principal Comp MM fund

Based on the most helpful WSO content, here’s what you can expect for Principal-level compensation at a MM PE fund, especially in NYC:

1. Total Compensation: Principal-level roles in private equity typically see an average total compensation of $676K as of September 2023. This includes base salary, bonus, and carry.

2. Carry: Carry can be a significant portion of compensation at this level. For example, in some cases, carry payouts over multiple funds can range from $5-6M over 7-8 years, depending on fund performance and structure.

3. Negotiation Tips:

   • Base + Bonus: Ensure you’re competitive with the NYC market, where compensation tends to be higher than other cities.
   • Carry Structure: Ask about the vesting schedule, governance, and whether carry is tied to a GP agreement. Some funds may have no vesting schedule, which could impact your long-term earnings.
   • Market Check: For a $5B fund, you’re likely looking at the higher end of MM compensation, so aim for a package that reflects the fund’s size and your NYC location.

4. Comparison to Other Roles: For context, Vice Presidents in NYC MM/UMM funds typically earn $363K all-in, while Directors/MDs average $599K. As a Principal, you should be positioned above these levels.

Make sure to clarify the fund’s expectations for carry, promotion trajectory, and any other intangibles that could impact your decision. Good luck!

Sources: PE Comp Question - VP / Principal Level, Best NYC UMM/MM Funds, Your thoughts on William Blair & Company?, Leave banking to start a PE fund?, Best MM PE in NYC / SF?