Wanted to run something by the pack for updated insights.
Is it still standard for VPs to get fund carry/equity as a part of compensation? I had a recruiter reach out to me and compensation is only salary + bonus ($250k-$300k range all-in). Recently had a friend leave my firm for a well known PE with West Coast presence and his offer was lower but structured the same way. Has something changed? Is this now standard?
Curious to hear your insights.
Carry is still industry standard from what I've seen / experienced at the two PE shops I worked at.
1) Large middle market ($1.5B+ firm) - 80 bps for VP level 2) Lower middle market / niche sector focused fund - 200 bps for VP level
It all depends on fund size. One way of thinking about it is to "dollarize" the carry.
Assuming your fund doubles on a pre-fee basis, Market for VP carry is in the $1M to $3M range vesting over 5-7 years in the MM / MF space. Generally the smaller the fund, the smaller the dollars.
For example, if you're working at a $5B fund, market would be something in the 10bps to 30bps range--assuming a doubling of the fund and 20% carry, you would earn 10bps to 30bps of a $1B carry pool, or $1M to $3M in your initial grant.
You'd have to adjust to each fund's specifics given different hurdle rates, carry rates and GP ownership levels.
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