PE bonus

I have a question about bonuses for PE analysts though (couldn't find it in the old posts). My fund just sold one of the portfolio companies and netted a 90% return. How much can I expect to get as bonus? Can I realistically expect a minimum of 1% of the gain to a maximum of 5% of the profit? The deal team size is very small (1MD, 1VP, 2 Analysts). Anyone can shed some light on how bonuses are distributed in PE firms? I haven't been around long enough to know how these things work so any comments would be more than welcome.

 

My fund doesn't distribute bonuses for portfolio companies sold. We do get a nominal bonus (~$20-25K for first/second years) when a deal closes - but this is not limited to the deal team, everyone at the fund gets this.

Aside from the co-invest, which really isn't a bonus, the vast majority of our bonus comes at year end when we get our performance review.

 
Best Response

I'm amazed that your compensation package wasn't explained to you well enough for you to know the answer to your question. I'm also amazed that, without being told you'd get a bonus/% cut from the sale, you'd think you might get anything. Getting a % cut of the fund's profits is called carry. If you have it, you know it. If you don't, you get your salary and your year-end bonus and that's it.

Now, it's not totally unusual for firms to pay their junior people spot bonuses of 10 or 20K here and there when there's a successful event, but never as a percentage of profits.

Do you really work at a PE firm?

 

yes i really do work for a pe firm. it's just that my contract doesn't include a carry in it, but this deal that we just closed is so successful that i think will warrant some profit sharing. the deal team size is small, which makes me think that a bonus would be on the way. the reason why i asked was because i want to see what other pe analysts are getting (% of profits) so to compare to what i think i'll get and eventually get.

 

MOST pre-mba PE professionals don't get carry (i.e. % of the profits). Carry usually starts post-MBA and grows as a percentage as you move up the ranks.

Also, you said your deal team is small. Does this deal team comprise the bulk of your firm?--because the carried interest from a deal doesn't just go to the deal team, it goes to the entire general partnership. And the GP's would have to decide if they wanted to share the wealth to give you anything.

It wouldn't be unusual for you to be rewarded with a token of appreciation for your involvement in the deal, but it would only be out of the pure goodness of the hearts of your firm's partners.

 

i see. thanks for your constructive comments ibleedexcel. greatly appreciated.

the deal team is small and comprise the bulk of my firm. i keep hearing that i'll get a 'big' bonus (probably a tease by the other seniors) so i'm tryiing to figure out what 'big' means.

i understand that what's big to one person may be small to another, so just trying to get a basis for comparisons.

 

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