The Review — 15/11/2016 at 10:30

Private equity salaries, bonuses and carried interest in the U.S., Europe and Asia

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The buy-side is still the place to be for junior investment bankers. Part of this is because private equity offers more career opportunities, but pay is increasing and the potential to earn big bucks through carried interest remains a big carrot for sell-side bankers as banks continue to hammer down costs.

But how much do you really earn? And if you want to make big money in private equity, where in the world should you base yourself? The figures below, provided to us by research firm Preqin, give you an idea of what to expect. The figures show salaries and total compensation – the discepancy being down to bonuses, and carried interest. When you’re senior in PE, carried interest is where the money is.

Carried interest is generally only a big deal once you reach the senior ranks in a private equity fund. In the U.S, however, ‘carry’ hits private equity professionals’ wallets before director level. Preqin’s figures suggest that even associates and senior associates in the states received an average of $60.9k and $200k respectively in carried interest. This isn’t bad, particularly when it’s added on to respective total cash compensation of $173k and $259.3k.

Wherever you are in the world, carried interest accounts for the lion’s share of pay when you reach the senior ranks. Managing directors in the US received an average of $3.3m in carry alone last year; chief executives of PE funds received $3.4m. Managing directors in Europe received an average of nearly $3m in carry and CEOs pulled in over $1.5m.

Total compensation for private equity professionals is higher in the US than anywhere else across all levels of seniority. Meanwhile, even though plenty of bankers want to move into private equity in Asia, the region lags all others when it comes to pay. Preqin’s figures suggest that the most you will earn on average in Asia is $2.2m – significantly below an equivalent role in Europe or the U.S. Preqin’s figures didn’t include carry at most levels in Asia due to insufficient data.

Finally, while more investment banks are cutting headcount, private equity firms are still hiring. 58% of firms surveyed by Preqin said they were hiring – 32% said they would keep headcount flat and just 10% said they would reduce employee numbers. The largest proportion of firms hiring (27%) said they intended to increase headcount by 6-10%.

 

 

 

 

 


Source : Paul Clarke, efinancialcareers.com

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