Hey All-
I have been negotiating an offer with a Private Credit firm that focused on real estate to come on as a VP. They are currently in the process of raising another fund fund (>$500mm).
Question I have to you is, how much cash + carried interest compensation should I expect (and what should the break up be across cash and carry)?
Thanks!
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Hey there! Based on the most helpful WSO content, VPs in private equity firms typically do receive carried interest. If you were to take the carry and split it into a 100 point scale, you'd likely get 1% - 2%. It's also possible that it vests over time, such as over a 5-year period. Given the size of your fund, you might even be able to negotiate for more than that, especially if there aren't many VPs/Principals/MDs already there.
As for the cash compensation, there's a wide range. A Glocap report indicates that post-MBA level professionals can receive anywhere from $300K-$400K carry dollars at work, all the way up to $1.5mm carry dollars at work for a brand new post-MBA professional at a "small PE firm".
Remember, the variance is due to a number of factors, including the size of the fund, number of professionals at the fund, location, precedent, and the generosity of the partners. Since you've already worked at the firm, they know your work product versus taking a risk on a brand new hire. Most firms will pay up for that.
Hope this helps! And remember, don't be shy to negotiate. You've got this!
Sources: Vice President Fund Carry/Equity
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