Private Equity Compensation Rises in 2007-2008

Good news for those seeking jobs in private equity. Salaries and bonuses for private equity professionals in North America continued to rise through 2007 and into 2008, according to the latest edition of the Private Equity Analyst-Holt Compensation Study, which appeared in Private Equity Analyst, a newsletter published by Dow Jones & Co. The survey shows salaries rose 5.3% to $200,000. When you include bonuses and carried interest, compensation packages climbed a total of 27.3% to $401,000 from $315,000. These figures reflect salaries as of April 1, 2008 and bonuses reflect performance in 2007. Figures cover investment and administrative personnel at independent and institutional buyout, venture capital and mezzanine firms. Median compensation for managing general partners, senior partners and partners, including salary, bonus and carried interest, was listed at $1.3 million, up 18%. While the median compensation at venture capital firms was $956,000, up 37%. Whether compensation will continue at these robust levels through the remainder of 2008 is an open question, however. The credit crunch and economic downturn in the U.S. have already impacted hiring at many firms. Observers also note that while salaries may not decline, economic conditions will likely affect bonus pools.