Looking for data points to share with my partners on typical vesting and surrender schedules for carry.
Also interested in the value people assign to their carry, whether you look at it as an annualized figure or as the total value of what you currently hold, and at what title.
For example: Mine varies but general 3-4 years until vest and $1m worth of carry over the next 7 years (low).
We are a 5 year vest (20% per year). Comes into play if you leave before fully vested.
And what percentage of your annual comp is that when looking at the total value / 5 years?
I'm also in the 20% per year over 5 year boat. It's nice to have all of it vested before fund is finished. I have different levels of carry depending on the funds purpose as I spend more time in one fund over another. For the main fund I work in it's like 1/1/2, but that is a bit heavy vs market as we are fairly lean in that fund and I do a lot of the lifting, both light and heavy. The other is more like 1/1/.75 but I spend less time here. Counting on carry is silly, just think of it as giant upside.
We are 25% at fund close, 15% a year for 4 years, remainder at final fund distribution
By fund close, do you mean fund inception/execution?
Final close of commitments / start of investment period
We can’t fundraise for our next fund until we are 75% invested in our current fund. With a 3 year investment period, it incentivizes you to stay for that final investment year because you are vesting 15% in your current fund while you are fundraising for your next fund (and earning 25% in the next one). We have 1 year fundraises.
I value mine at 75% of 85% over 5 years. It puts me more into the 40%/35%/25% split in total comp, but I’m okay with more of my money in my base than in carry.
Does create a problem if I ever wanted to look elsewhere because every MD that I know has higher total comp than me, but a lower base.
20% per year w 20% tail (meaning last 20% never vests or gets realized until dissolution).
I value my carry as expected value / # years to gut check how it rounds out my total annual comp
And how much do you value it at annually as a percentage of annual comp?
I'm always testing if for the 1/1/1 metric (base/bonus/carry) at a minimum
Vests 1/7 each year for 7 years (yes, I know 5 years is typical),
With few exceptions, I don't think you can put a dollar figure on it, because (a) very hard to accurately project performance/exits in this environment; (b) if investments are held longer (very likely) than initially projected, then you get double whammy of less carry and time value of money discount and (c) these joinder agreements are heavily tilted to favor GP management, who will absolutely spread pain around in order to live to the next fund, if current performance is poor. And on that next fund, these same dynamics will play out again, so you're waiting for Godot.
So, as others have said, I treat my base + salary as all I have to live on, and the carry is a pleasant surprise lotto ticket that may or may not hit. Another point I'd add, while they can act as golden handcuffs to prevent you from moving, they also provide job security in that if the fund fires you, it all immediately vests, so they're more likely to keep you on.
100% day one. No vesting.
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