Hi,
I am currently a 2nd year analyst at a mid-tier BB.
I am looking at a Lower MM PE opportunity (NOT IN NYC) for a 2 year program - think $300mm - $400mm AUM across 2 funds. This is a younger firm with no real name recognition - I have been offered $90k base + $30k bonus.
I know that given it is outside NYC, that I could certainly expect less than the $200k all-in-comp that reputable MM PE shops will comp.
Despite that, I was expecting ~$150-160k all-in so the $120k offer seems really low.
I am seriously considering turning the opportunity down based on A) low comp B) no real opportunity to stay on post 2 year program 3) Not an attractive location / region (a bit of a drive outside a city) 4) no name recognition is not helpful for heading to B-School.
Thoughts?
protip: Your post would be infinitely better if you posted some alternatives for us to work with.
I don't have any offers currently - am in the middle of processes with Growth Equity, Secondaries, Family Offices and other MM PE opportunities in NYC / other attractive cities.
Might have an opportunity to do a 3rd year but not ideal.
Is this opportunity better than being unemployed this summer? Yes, obviously, but my question is around whether this is a low-ball offer. If it is, there are other investing roles that I can pursue that will give me great experience for B-School or staying in Finance beyond this and that will comp on a similar level.
Honestly 30k difference in the long run is nothing. I would take the offer and work my ass off! In few years you'll be caught up.
In what sense would I be caught up? I will have to go to B-School and not sure what I can really expect to get into. Wouldn't a lower MM no-name PE shop not really help with PE / HF recruiting?
Maybe I'm being a bit stubborn; just kind of a blow to receive less comp than I am in line to receive as an analyst.
Just remember a good job is better than no job. Also, most new grads would take half of your money and be happy.
This is a 2 year program with a low chance opportunity to stay on. No carry. The partners were let go from their investment firm during the recession and started this up. So nothing compelling there.
Based on this information I'd refuse the offer. If you're unlikely to stay on they have no reason to give you any discretionary bonus and it wouldn't set you up perfectly for MBA recruiting either. There's nothing wrong with dragging it our and/or negotiating the salary but if nothing changes I'd probably refuse even if there is no alternative offer on the table yet.
Would definitely keep looking based on this. If it were promotion-track and involved carry it'd obviously be a whole different story. Feel free to PM me the firm and I can see if I'm able to find anything about the partners' track record.
$120 all in is low for a ~$400m aum firm. You're on the ball with your original expected range. Are there lots of heads and admins or the vps over-paying themselves?
Do you have an idea of the quality of your experience there - would you get great experience despite it being a relatively new fund? And is there some sort of precedent for past analysts/associates going to good b-schools or being able to lateral into bigger/more renowned funds? If you can answer those questions it might be easier to give you a response. But dragging out the offer/being able to get as much time to decide as possible would help.
But generally speaking, I would value positive factors like work exp quality, b-school/lateral opps higher than pay, especially since it's not in NY (and I'm assuming is not in a very expensive city).
And the other question to ask is: even at this offer point, would you prefer status quo (mid tier BB, stay on as a 3rd year and make a go for PE again, assuming you can't land other offers in PE this year) or this current offer?
Compensation is definitely low. I wouldn't settle for anything less than $150k, unless it were an amazing opportunity. Try to negotiate it though. The partners may have no idea what market comp is for someone with your experience given they are small and relatively new to the game.
this is a clear pass unless your bank is going to fire you in june or something.
Agree. That is aweful. With that level of AUM, they should be able to pay you more in line with the market. I personally disagree with the above comments that comp does not matter. I think it says a lot about how a firm thinks about its junior employees.
Doesn't sound compelling at all. It would be an entirely different thing if this was an up-and-coming firm that is led by hungry rockstars and is expected to continue to grow. And if you had the opportunity to grow with the firm and eventually get carry. But since it's not, I'd pass.
I would tell them that their offer is not competitive from a comp perspective and move on. Sometimes, firms need to hear that and understand where the market is. You'll have plenty of other opps come up.
I'd pass on this, seems like they're really giving you nothing. If it was low comp but great opportunity(as in, you're on partner track, good low COL city, etc) then I would take it. If it was great comp but shitty opportunity, that could also be argued for.
The pay is extremely low by PE associate standards especially given you're coming from a traditional background, $400m AUM is enough to get close to paying market rate, no carry and no ability to advance after 2 years makes this a dead end job, and no name brand means the name itself won't help with other jobs/business school.
I'd politely decline and say that comp isn't competitive. Only elaborate if they ask and keep hustling to find something else.
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