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.
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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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