Research from an executive search firm has highlighted the relationship between carried interest compensation and an investment professional’s years of private equity experience.
An executive that has managed $250 million to $499 million for less than three years earned on average $700,000 in carried interest last year, according to the 2018 North American Private Equity Investment Professional Compensation Survey from Heidrick & Struggles. This compares with $13.8 million for executives that had managed the same amount of assets for 16-20 years.
North American professionals who had managed more than $20 billion for less than three years earned just $1.6 million in carry last year, while those with 16-20 years under their belt earned $65 million.
There is also a modest correlation between AUM and carry earned. On average, executives who have managed $10 billion-$19.9 billion for seven to nine years earned $23.2 million in carry last year, while executives who managed $6 billion-$9.9 billion for the same period of time earned $12.6 million.
The report compiled compensation data from a survey of more than 630 investment professionals in North America.