What is Your Firm's Carry / Fee Structure?

Starting this thread to gain some market insights. My firm has been around for 12yrs but started operating as a PE fund 4 years ago. We've launched 3 funds over the past 4 years and with total equity checks of about $1.6B (inclusive of forecasted commitments in current fund). Should have $2.5B+ AUM at YE.

In our first fund, the GP (CEO, founder) kept 80% of carry and distributed the remaining 20% among the team. In fund II and fund III, the GP kept 70% of carry. On top of that, since we're not quite fee neutral yet from an opex standpoint, the GP is using management fees to fund the business as well as his GP commitments. Any excess is distributed to his personal accounts until needed for operations. We should be fee positive beginning later this year and I hope some of the management fee excess will be distributed to the firm as well.

I was wondering if I could get some insights from the community on how their firm distributes fees / carry. Is my firm near market? Seems pretty far off to me... Thanks!

Comments (10)

Jan 13, 2022 - 6:27pm

Surprised he was able to attract good high-level talent while hoarding that much of the carry pool. If you listen to interviews with founders of investment funds, they'll bring it up as a frequent point of regret or big win (higher split). 

There are a few good preqin reports floating around on fee structures for vanilla buyout BTW. Some are a little dated but you might be able to source newer versions through a friend.

  • Senior VP in IB-M&A
Jan 13, 2022 - 7:44pm

3 funds in 4 years? Are these actual funds or is it an independent sponsor model?

At my previous shop the founder kept 95% of the carry - he was a total fkn prick.

  • Senior VP in IB-M&A
Jan 13, 2022 - 8:59pm

Dolor voluptatem aliquam laudantium velit error vel dolor. Asperiores dolorem autem rem nisi ipsa iste cupiditate reiciendis. Quia est quos voluptatibus maxime perspiciatis ut tempora.

Start Discussion

Total Avg Compensation

January 2022 Private Equity

  • Principal (8) $676
  • Director/MD (18) $575
  • Vice President (73) $365
  • 3rd+ Year Associate (72) $271
  • 2nd Year Associate (147) $255
  • 1st Year Associate (297) $220
  • 3rd+ Year Analyst (26) $159
  • 2nd Year Analyst (66) $134
  • 1st Year Analyst (194) $119
  • Intern/Summer Associate (21) $67
  • Intern/Summer Analyst (227) $59