SWF Compensation Value Prop
I recently received an offer for the NY Office of a SWF. It's one of the more active investors and does co-invest, direct invest, and a bit of VC. I'm coming from an UMM/MF and lateralling in as a Sr. Associate with expectation of a VP promote after a year.
Cash comp is in line (+/- 5%) with existing role, but there's no carry until the Director / MD level. At my existing role, VP's are getting ~$2M in carry DAW over their tenure. Anyone know what, if anything, justifies the relative loss here? Does the SWF offer better relative cash comp for mid level folks, offer faster promotion rates, better job security, co-invest, other perks etc. It just seems like a large amount of relative cash to be leaving on the table. WLB seems to be better than standard UMM PE, but seems there are still full on sprints / port co mgmt work.
Based on the most helpful WSO content, here are some key points to consider regarding the compensation and value proposition of working at a Sovereign Wealth Fund (SWF):
Cash Compensation:
Carry:
Promotion Rates:
Job Security:
Work-Life Balance (WLB):
Other Perks:
In summary, while you might be leaving some cash on the table in terms of carry, the SWF could offer better job security, potentially faster promotions, and a more balanced lifestyle. These factors can be significant depending on your career goals and personal preferences.
Sources: Is this associate compensation competitive?, What are the key lessons from GS / MS layoffs?, Total compensation at Financial Technology Partners?, Where is the compensation in banking? Is it worth taking a pay cut for the long-term prospects?, Large hedge fund analyst compensation
It’s a SWF, I would assume the lower total comp package is because you aren’t burning the midnight oil so you get the benefit of lower stress and likely better job security
Likely higher rate of making it to director, cool perks, and (given higher rate of promotion) potentially higher or at least equal comp over the life of the career. Compare with someone at another UMM where either the carry is underwater or they don't make it to principal.
Ofc upside is less - your peer who crushes it at their MF will make more - but you're probably making in line over a career with like the 70th percentile (ie top 30%) of people across growth equity and buyout in T1 cities.
Also if you hate it after a year, given your large cap buyout experience, you can likely go back to straight PE assuming market goes back to normal.
Btw try negotiating - have heard of people negotiating their UMM/MF comp at SWFs and making more (20%+) cash comp than they were making before....which then obviously makes the value prop more reasonable.
Thanks for this response very helpful.
That framework makes sense. I’ve heard of pretty steady 12-18 month promotion cycles. Folks have made directors from Sr. associate in 3 years which is pretty fast.
I couldn’t negotiate much on base / bonus. But have been told there’s very high upside in the annual bonus number.
After getting booted from my last fund - I see the value in stability, but feels hard to totally justify that that against no carry and no coinvestment. Will give it a year as you suggest.
Give it a year and if you really don't like it, think the role is slow, don't feel like you're making enough then move. Keep an open dialogue with HHs so that they understand why you took the new job and, if you decide you want to move, give them very early heads up things aren't going so well - that way they will understand vs. think you're always a flight risk.
Off-topic so apologies but any guidance in how were you able to land the SWF role? In a similar position and looking to move to NYC and join a family office or SWF. Currently in PE
No problem - honestly I applied to an anonymous job post on LinkedIn and it worked out haha. For the most part you can use the standard headhunters. But I think family offices and SWFs often use some obscure folks.
Appreciate it, thank you! Similar experience as well. I have prior FO experience, currently doing PE but want to go back to either a FO or SWF in NYC. Let me know if you guys are hiring, ha.
Curious to know which SWF? Is it Temasek / Mubadala (ie active ones)?
What’s the comp range
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