State of PE BD in 2026
Curious to hear from some of the BD pros out there about how things are going? I am curious to know how difficult true proprietary sourcing has gotten these days, as I have been out of that side of the business for a while (working in a GTM role at a fintech).
Currently weighing a VP/Principal role at a MM fund. Kind of a JAMMBO...but returns have been very sold even in their 2020/2021 vintage fund.
Does anyone have any data points for comp at 1-2 bn funds?
Based on the most helpful WSO content, here’s what you need to know about the state of Private Equity Business Development (PE BD) and compensation insights:
Proprietary Sourcing Challenges: The rise of business development roles in PE has been notable, but true proprietary sourcing has become increasingly difficult. Many firms are competing for the same deals, and the market has become more saturated with intermediaries. This has pushed BD professionals to focus on building deeper relationships and leveraging unique networks to stand out.
Compensation Data for VP/Principal Roles:
MM Fund Considerations: If the fund you’re considering has delivered solid returns, particularly in challenging vintages like 2020/2021, it’s a strong indicator of their operational and investment discipline. This could make the VP/Principal role a compelling opportunity, especially if the fund has a clear strategy for growth and differentiation in sourcing.
If you’re weighing this role, it’s worth considering not just the comp but also the fund’s culture, sourcing strategy, and long-term growth trajectory. Let me know if you need further insights!
Sources: PE Outlook over the next decade, The rise of business development roles in the industry, Latest State of Oil & Gas Private Equity, Texas Business Outlook (Austin, Dallas, Houston)
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Principal/Director level BD guy here. My focus is intermediary coverage so this may not be a super helpful answer, but proprietary deals are, and have been, a total slog for years now. The smallest of companies receive several inbounds a week from the mass of undifferentiated buyside shops, LMM funds, search funds / fundless sponsors, LMM bankers, “AI-native” origination firms etc. Sure it can be done in some verticals, but you have to be sufficiently differentiated and have a unique angle to get any traction. The market has gotten incredibly efficient.
We closed a ~70mm ebitda proprietary deal last year, but it was incredibly idiosyncratic, stemming from a board relationship at an existing portco. I, as a BD guy, had zero hand in it. Still a big win all around but not something you can count on.
Got it....that's very helpful. My impression was that it's gotten very noisy for sellers...thank you for the feedback from in the market.
Sounds like the advice would be to tread cautiously & understand how the role will be evaluated if it's fully proprietary-focused. Feels like it could be a recipe for frustration. Looking at their portfolio, I think they cast a wide net.
Agreed, would recommend proceeding with caution. I’ve seen firms start a BD function from scratch with crazy unrealistic expectations and they end up letting the person go 3, 6, 12 months down the line. Not a spot you want to find yourself in.
If they have an existing team with a playbook and realistic expectations, that can certainly de-risk it a bit. I am also extremely skeptical around incentive structures that just prioritize volume and harassing the execution team (I.e., comp structures that largely pay you on IOIs/LOIs submitted on “your” deals).
Comp-wise, they're saying mid-3s for cash all in with + undisclosed carry at this stage. Does not sound like comp incentives are tied to volume...but to your point, not sure if evaluation of my performance will be tied to origination metrics like that.
Does comp feel 'market'? Non-Tier 1 mkt. 1-2bn AUM. Claims they will start raising a fund in the fall (which I have no idea on the BS-meter scale how true that is)
Comp sounds about right given geography and size. Carry is generally 50/50 though much more common now than say 5 years ago or so. Have also seen folks join without it initially and then get into the pool after 6-12mo of good performance. Maybe 1-2mm DAW would be appropriate here if on the table.
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