Underpaying shops thread
Just curious, which funds are known as underpaying their associates?
I heard Partner Group is below market
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Definitely AKKR for its fund size.
Akkr is a full on growth shop right? They pay even below other growth equity shops?
They do both mid-market growth and buyout. I don't think they pay significantly below growth but might be below what you'd expect for buyout funds of similar size.
Define underpaying, is this like 200k or 300k, what’s appropriate range for fund size? Strategy?
Think 200k or below for any 3bn+ fund is below market
I've heard HIG's comp levels are below average. Anyone able to confirm?
Got a buddy who intended in the London office. He told me the same too
Interned*
Yes but the free equity coinvest brings it level or even higher given prior fund performance
Thanks for chiming in, Rick Rosen.
Lol saying free coinvest is literally getting an interest free loan from your employees and calling it “compensation”
Yes, I know people that work there. They really underpay for their fund size
..
Not sure about the associate level but their post-MBA VP comp (~$400k all in) is fairly standard considering fund size (maybe even above market) and number of investment professionals. Despite the $40Bn+ AUM, H.I.G. should really be comped to MM/LMM funds considering their flagship LBO fund is like $1.3Bn and they buy $10-$35MM EBITDA businesses. The Advantage fund complicates things and really should pay more to attract the type of talent they should be competing for but I'm sure internal comp dynamics are tough.
Based on their website, they have 400 professionals at just the private equity platform. How can they justify 400 people to support $1.3bn of AUM? Feel like most funds with ~$1bn of AUM have 10-50 people? Would you expect comp to be higher at one of those funds since they only have 50 mouths to feed? $400k for a post-MBA VP seems super low. I know middle market 2nd year IB associates that make more than $400k
Why do people still stick with them in this case?
culture
-------
following
Spectrum equity analysts, very low. People renege offer for other shops because of how low it is
Heard Spectrum is a shit place to work, but returns are good. Too bad you won't reap the benefits as a junior member of the team.
Carlyle? only $290k
Is that considered low?
Such an odd number to pick, like at least toss in the extra $10k for a 3-handle
Who is wealthy? One who is happy with their lot
Assuming most of the PE associates come from bulge bracket banks, it's not a guarantee that PE will definitely pay more than staying as an associate in banking, this is the ultimate takeaway. For starters, generally base salary for associates at bulge bracket banks is ~$150k (correct me if I'm wrong), and for many MM or UMM funds, actually even some MFs, the base comp is less than $150k. Like others said above, bigger funds on average pay ~$300k TC for the first year. Most associates in banking who were analysts before tend to be at the top of the associate class (a lot of MBAs who are pretty lost especially as a first or second year), therefore as an analyst-promote in banking, there's a decent chance you'll be at ~$300k, but the added plus is that you have someone doing the work for you, versus in PE you're starting right at the bottom again and trying to claw your way up the learning curve which we all know is a lot steeper and takes longer to climb than the one we all went through for banking. This is my general perspective from personal experience and talking to friends.
Key takeaway seems to be: probably less money + definitely harder / more work.
With some banks bumping up to 175 base as as0, it’s probably becoming very compelling to stay
wow even sr. assoc at my UMM firm don't get that much base...
pretty common to see base at UMM / MM shops that are under $125k btw, would encourage everyone to ask friends for some real statistics...PE is not the guaranteed promise land that everyone makes it out to be
Totally agree, the difference between banking and UMM/MM PE at the associate level used to be pretty even. Banks are clearly getting more aggressive as they lose more and more junior talent to PE and tech firms. I'd really encourage people to recruit for PE because of interest in investing, not chasing short term cash comp. I personally enjoy it and am happy with the move, but a piece of me does still miss IB... but it's a very, very small piece
Platinum is a notorious underpay. 1st yr associates are like 225. 2nd and 3rd year are 250 - 275k
What would market rate be for that? And do you have insights for Senior Associate / VP levels too?
Shoulda add GI Partners, TPG, Apax to the list
I've heard the opposite actually for GI Partners at the associate level. Heard they pay very well.
Yes GI pays well given their fund size is much smaller than TPG, Apax. GI is c. $260k from what I heard.
What are TPG / Apax paying associates?
Spectrum Equity massively underpays, pretty stingy since apparently fund returns are solid.
Yea Spectrum is terrible for that
Isnt Vista known to under pay?
Vista Public Strategies apparently is $220k all-in, which is peanuts for a L/S fund. Vista discount is real, at least on the public side.
To turn this around, which firms are known to pay very well? Other than the obvious Apollos and H&Fs. Any MM/UMM that pay above market?
This could be a decent topic for a separate thread I guess?
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