Job Search Digest conducted our annual Private Equity Jobs Compensation Survey in the Fall of 2008 and received private equity compensation data directly from hundreds of private equity and venture capital partners and employees from firms, both large and small. Some of the participating firms include: Credit Suisse, Delta Partners Group, Intel Capital, Kaiser Permanente Ventures, Lehman Brothers, Soft Bank Capital and many others.
Although compensation held steady at that point, both PE and VC professionals did see trouble on the horizon. This has been borne out in the second half of 2008 by a significant drop off in deal volume and near disappearance of IPOs, along with difficulty in raising new funds.
In 2008, compensation for North American private equity professionals, including salary, bonus and carried interest, averaged $426,500, versus $408,000 at venture capital firms. Managing general partners, senior partners and partners at buyout firms posted median compensation including salary, bonus and carried interest distributions of $1.3 million, versus $956,500 at venture capital firms.
In the Job Search Digest survey, we found that private equity earnings vary by title, with the highest earnings by the CFO, Partner or Principal, Managing Director and Vice President. Compensation takes a significant leap when moving from Analyst to Senior Analyst, and likewise, Associate to Senior Associate.
The bigger the private equity firm, the better the compensation, depending on the fund’s performance. Funds in the mid range ($100 to $500 million) raise the bar when it comes to compensation. However, performance can pay off well for a junior employee at a smaller fund. This suggests that it may be a good career move to start off at a small fund and make the jump to a larger firm when moving up to Senior Analyst or Senior Associate level.
Next time, we’ll look at an interesting trend regarding MBAs and private equity compensation, and why PE professionals may fare better than their venture capital peers in the current downturn.
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