Data Points for Promote / Points given at funds?
There are a lot of threads laying out cash comp but curious for data points for what others are getting for points / promote at the VP level or higher (call it 6 - 8 YOE on the low end up to principal level). I'm specifically curious about those at LP funds but probably still helpful for others if those in a GP discuss discuss as well.
Questions but not limited to:
- Fund, Operator or developer?
- Fund size if at a fund and what type (Core fund vs. value-add). Product type?
- How many points do you get and what is the expected value? How long until you expect it to pay out?
- How many investment professionals are on your team (basically, how many people is your fund / team's promote being split amongst)?
- What's your specific position and duties?
- If you're at a GP - do you only get points on deals you originated or do you get points on all of the deals your team does regardless if you were the one running that specific deal?
At my previous shop:
How many years were you at the manager/VP/Director level and what would you say the average of all those years shook out to be on a $ basis (just from the promote, not talking about your standard comp)?
Nice try, IRS
What was your vesting period? Is it from the time you joined the company or does it reset per deal?
There was no vesting period other than “you are a part of the company when the deal closes.” So if you joined in year 2 of a 3 year project that the company is doing, you typically wouldn’t get paid on that, but that’s not guaranteed either. They really liked handing out checks/sending wires and playing that benefactor role.
Out of curiosity why would you leave that shop? Grass sounds pretty green there.
Three reasons:
I'm a VP at a $500m - $1b fund that invests mostly LP equity. I cover all acquisitions for a few of our target markets (about 1/3 of our investments). I have support both above me (an MD of acquisitions to step in when needed) and a couple associates working mostly just with my deals. I have 9 YOE and get 3% of our fund promote. I've had this level for over 2 years and expecting to get a bump next year at my 10 YOE mark (and possibly promotion to SVP). Our fund is still being deployed so I don't think I'll see an outcome for 5+ years, but on our base case (we are a value-add fund), it should equate to around $2 - $4 million. We'll see...
Vesting period?
Discretionary Fund over $1b
VA Multifamily
2% - $3m - $4m on latest fund have promote in other funds totaling another $2m. Likely gets paid out over next 4-7 years.
Less than 20 people
I handle a region for the company
GP Fund - 1.5bn of opportunistic projects
3.5% of fund - base case uw in the 3-4mm range
Also have same carry in opco that distributes the fees
5 year vest w 15% tail
See you're Senior VP. How many YOE? 15+?
10
What does 15% tail mean?
Have to be there to get it
MF Owner/Operator/Developer
~$2bn GAV AUM. Currently raising a $500mm fund core+ acq and development blending to a fund level mid-teens target IRR.
6 people in the promote
VP 7 YOE 90% Acq. / 10% AM
1.5% of carry in all deals with a path to growing this to ~5%+. Rolling 4 year vest. The expected value of my share of fund promote is ~$1.2mm. ~$150k per deal capitalized outside of the fund.
VA Fund over $1.5B
2.5% - $5m - $6m in latest fund should be paid out over next 5 years. Previous funds worth $2m - $4m
12 people in the promote
10 YOE
Does this mean you are getting 2.5% of 5-6mm or your share is 5-6mm?
Seems like everyone’s carry is worth millions and millions. What I want to know… who here actually got paid?
Nobody probably got paid yet. Assume most are holding out hope that deals sell at the right dollar amount in the next 3-5 years
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