Post-MBA VP Comp for MM PE Fund ($1bn+) in NYC

I have an offer at a middle-market private equity firm that is fairly new. They just closed on $1.2bn, trying to get an idea on compensation at the Post-MBA VP level. What are thoughts on $175k base, $175k bonus, 100bps carry?

 

Value the carry. Assume $1.2B goes for 2x to $2.4B. Of what you've earned ($1.2B) your firm gets 20% ($240mm). Of that $240mm, you get $2.4mm. Assuming a fund life of 5 years, that's $480k per year.

That's $830 ($175 + $175 + 380) total comp, which, based on my judgment after years of salivating over databases of VP comp, seems like on the higher end for a shop your size.

It's also more than what VPs at my shop make (UMM/MF).

 

Disagree with everyone else.. I'd treat carry like I'd treat a stock grant from a tech company: divide the carry over the number of years of vesting and add it to your compensation.

If you think about it, every year you vest your carry is effectively "earning" your carry - it might not actually hit your account until much later in the fund's life but by that point you've already earned all of it and should hopefully have another carry allocation in a new fund that you're "earning".

 

Cash comp seems low.... i have no data points for this but it just does. Likley not an apples to apples ocmparison but 1st year associates at EB's will pull more in cash than that??? 

Again , just a gut thought -- i could be off. 

 
Most Helpful

You can argue both ways that the comp is slightly above/below average, but the overall message is that the comp package is a good one and shouldn’t be viewed negatively when evaluating the offer. My personal belief is that you should be pleased with the offer and if you like the firm/people, you should accept and not look back.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 

feels like mid level comp is perpetually a mystery to people, we need more info out there. VP2 at a UMM fund (10b+). $800k cash, $7.5m DAW

 

Curious. What was your comp progression from ASO1 to VP2?

 

Listen, we are on an anonymous forum here - make of the info what you will...

Yes, the cash comp is salary + bonus (my salary is sub $350K). DAW on an implied 2x on the fund. It's not what I was granted at promotion to VP, I got a bump at end of VP1 given performance.

I'm definitely above market. Part of it is the fund, part of it is personal performance. most of my peers (VP1 - numbers spread out a lot more over the last couple of years) at large funds were somewhere in the 450-550k comp range; smaller funds were $400-500k. Carry all over the place - anywhere from $1.75-2.5m on the lower end, $8m on the high end. I'd say most concentrated between $2.5 - 4m

Comp progression: three years as associate, no carry, low 300s to mid 400s. VP1 at high 500s

 

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