When it comes to retaining talent, and bringing on new staffers, it’s necessary to know what the going market pay range is. That’s why each year pfm takes a look into the compensation levels of private fund professionals, specifically those who are responsible for managing the firm. And besides, who doesn’t want to know where they rank among their peers in terms of their pay packet?
With nonpublic data provided by compensation consultants J.Thelander and research firm PitchBook – who polled more than 70 private equity firms predominately in the US about their compensation packages – the following pages contain a snapshot of how much money (including base pay, bonus and carry) firms are paying their partners and staff. Of course, here at pfm we are interested in the pay of all alternatives managers, but as the largest industry – and thus data source – private equity serves as an excellent proxy for all private fund managers. And for the first time, the results don’t include venture capital compensation meaning an even more “apples to apples” comparison of the industry’s remuneration practices can be had.
It’s not just senior dealmakers who are given attention. Compensation stats are provided on a range of professionals, from the most junior pre-MBA associate, to the back office’s fund accountants as well as other support functions such as human resources managers.
One of the key findings of the data is that firm size is a major variable in determining an employee or partner’s pay. Average compensation figures are offered for various professions across all firm sizes, but pay averages are also broken down between firms with $1 billion or more in total assets under management and firms that manage less. Smaller firms generally have smaller budgets to work with, meaning less capacity to offer premium pay packages. Nonetheless, the data reveals compensation trends at smaller firms do not deviate too far from what large firms pay.
Subscribers who are interested in comparing and contrasting this year’s compensation survey with those of years past are invited to visit our archives on www.privatefundscfo.com where past survey data is stored. For more comprehensive compensation data around a particular private equity profession, readers are encouraged to email Jody Thelander at jt@jthelander.com. Enjoy the survey, which also includes an interesting look into fee models, GP commitments and some other indirect factors that may impact compensation at today’s private investment firms.
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