For someone who joins a private Equity Firm (similar caliber to kkr or Vista or Bain Capital) what does the salary progression look like? And how many years does it take to move through each level nowadays? Does it differ for those with mba? Thank you
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Hey Associate 2 in IB - Gen, what a lonely thread. I'm here since nobody responded ...so maybe one of these discussions will help:
More suggestions...
I hope those threads give you a bit more insight.
Thanks
The Heidrick & Struggles report (easy to find on Google) has good data on all-in comp (including carry value) by level. A typical progression path might be something like:
Associate/Senior Associate: 3-5 years, or 2-3 years associate + 2 years MBA
VP: 3-5 years
Principal: 4-5 years
Progression from MD to Partner isn't as structured so I'm not going to give timelines there.
What exactly is the difference between MD and partner? The heidricks report seems to treat these positions as equals.
Generally it's just a larger % of the carry pool and a bit more seniority (a Partner might be on investment committee but an MD isn't, for example). Although some firms don't have two separate levels.
Partners will have ownership in the mgmt company, MDs will not
Analyst: 180-200k
Associate: 300-350k
VP: 425k+ and additional carry
Those cash comp figures are a bit low for Associate / VP at a MF. Would expect something more like:
Associate - $300-450k
VP - $500k+ and carry
These numbers are underwhelming… if you’re at a Centerview type place and can make close to $1M at a VP-equivalent level why would you ever go to PE, especially where progression is more competitive. Do carry amounts really make up for gap in cash comp?
Centerview isn’t exactly huge. There’s only so many of those spots.
It’s all about the senior partner carry potential, which will outweigh what an MD banker can get any day. If you’re not willing to stick it out until then, banking will give you more near term comp. The other benefit of carry is that it is taxed at the LT capital gains rate as opposed to as ordinary income. That’s an extra 15% juice, though that may change moving forward based on regulation
A 40 year old partner there who spent his whole career there probably made MD at 33, partner at 37. If a CVP MD there makes $2-4mm, and partners make $5mm+ -- translates to a net worth of $20-30mm by age 40. Stick around another decade and you'll probably push $100mm as senior partner, but also the benefit is that all of it is realized (maybe some deferred actually), unlike PE where 90% of your net worth is your quoted carry figure sitting in a spread sheet. Also seems hard like you have to make the choice: do you want to be an agent or principal in life. From comp and general risk perspective, I guess CVP wins/is safer, but it lacks the thrill of investing I guess. Question: would you guys take a career @ CVP over a top HF?
Ask yourself how many senior bankers (even at CVP) you know have cracked $100M in net worth. And then take a look at the PE world and the answer will be a lot more. There’s just more value creation that comes from being a top tier investor than there is as a top tier market maker. However, not a knock at all on CVP as it is a great seat.
Ultimately, find what you like and you’ll make the most money there. The people making significant dollars live, breathe and crush their jobs. You can’t do that without picking the right path for yourself. If you are salesy and very much like the client services dynamic, banking is your best bet. If you like pure analytics, maybe HF is the best bet. If you like deal making and longer term thesis development, then go the PE route. If you pick the wrong route, odds are you’ll either burn out early or won’t be as good at it as people who picked the path that fits their personality style and skillset.
if i was at CVP I wouldn't leave for anything sans MF PE. Even then, you'd have to hesitate just a little because the CVP comp package is that good.
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