Insights by Altus Partners
Private Equity Growth Equity Compensation Report Investment professionals
2023
Table of Contents
CONTENTS
02. Introduction
03. Message from Altus Partners
04. Methodology
05 - 08. Market Sentiment
09 - 26. Compensation Results Analyst Associate Vice President Director Partner
27 - 29. Conclusions
30. Altus Partners Overview
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
01
INTRODUCTION
The 2022 - 2023 Altus Partners Private Equity - Growth Equity Compensation report provides essential insights into the current compensation expectations and talent overview within Private Equity. This data is invaluable to firms seeking to attract top talent while managing their hiring budgets for the upcoming financial year. We are excited to bring you further insights in 2023. The 2022- 2023 Private Equity compensation report demonstrates increased compensation expectations among candidates. International Banks and Consulting firms have compounded this situation with aggressive remuneration packages to counter regulatory changes, challenging funds to match these expectations across almost all corporate gradings. Over half of the surveyed candidates felt underpaid, indicating less enhanced employee engagement schemes. This trend is partly driven by a cost of living crisis in many areas, which calls for salaries to be seriously readdressed. Our research shows that candidates are typically seeking 20-30% increases in their base salaries to maintain similar purchasing power as before. Carry continues to be the most attractive benefit on offer. However, beyond attractive compensation, excellent company culture, good deal flow, and successful leadership distinguish a competitive organisation. For funds to overcome these challenges, they must offer a comprehensive package that includes competitive compensation and benefits. Additionally, successful funds can stand out with unique selling points such as a diverse team, an excellent track record, and a strong position on ESG and Sustainability. Ultimately, these elements make up the foundation of a successful fund that will be able to attract the best talent in 2023. We thank everyone involved – individuals and funds – for participating in this 2023 Private Equity Compensation Survey. We look forward to seeing how things evolve in the coming year as the industry adjusts to changing market conditions.
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
02
MESSAGE FROM OUR FOUNDER The global economic landscape of 2023 has presented several challenges, but the market has started the year on a strong note. Funds that have fundraised in the past two years remain committed to hiring plans, and the most successful hiring will be seen amongst funds that hold compelling compensation structures and diverse workforces.
While funds face pressure to pay more than their peers, there is sometimes a disconnect between what candidates expect and receive. For funds, it is essential to remain mindful of this dynamic and ensure that they are providing a fair compensation package while also meeting the needs of their organisation. 2023 is another competitive year for hiring as funds seek to recruit the best talent available, aligning with investment and organisational objectives. It is encouraging that many funds focus on increasing diversity within their investment teams. This was the number one trend when hiring in 2022, and it is pleasing to see that the focus remains strong in 2023. The positive results of such initiatives can often be seen quickly and will continue to have a long-term impact across the entire industry.
"
The Private Equity space continues to evolve and with package benchmarks changing quicker than ever, clients need the latest data to ensure talent isn't lost to competitors.
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
03
METHODOLOGY The Altus Partners Private Equity - Growth Equity Compensation report has been collated by collecting data from our network of clients, candidates and the Altus Partners Salary Survey (carried out in February 2023). The compensation information sought was specific to base salaries, short-term incentives (bonuses), and longterm incentives (carry allocations). These independent data sets were collected through securely designed online tools, ensuring anonymity to all participants. Ethical considerations were awarded to those who shared personal information by ensuring confidentiality.
Data Sources
01
Fund Data
02
Candidate Data
03
Survey
We collected data directly from 102 Private Equity funds regarding base salary, bonus and equity components of compensation. In addition, the survey also gathered data on additional benefits such as healthcare and other fringe benefits. The survey results were then separated by strategy and fund size.
The data collected was a comprehensive overview of 892 candidates' remuneration packages. It provided insight into the compensation structures that various firms have employed in the past 3 months. The results were further broken down by fund size and investment strategy, indicating trends across different market segments.
An analysis of 320 survey candidate responses revealed current compensation based on experience and level. The results were separated by fund strategy and AUM.
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
04
SURVEY RESULTS Q: Do you feel your current compensation is: 320 participants (candidates) responded to the following question: Do you feel your current compensation is: Below Market Rate, At Market Rate, or Above Market Rate?
Despite significantly increasing compensation across the industry in the past few years, most employees still feel they earn below the market rate. Of all salaries awarded in 2023, 46.7% felt they were at market rate, and 50.7% were below market rate. This demonstrates an ongoing disparity between salary levels and expectations. The results could also indicate the rise in pressures associated with the cost of living. To ensure employees are paid fairly and competitively, reviewing salaries yearly and adjusting accordingly is essential. Companies must also provide pay standards reflecting each job role's current labour markets and allow for nimble adjustments to attract the right talent. Market competitive compensation is critical for employee satisfaction, retention, and motivation.
Above market rate 2.7%
At market rate 46.7%
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
Below market rate 50.7%
05
SURVEY RESULTS Q: If you were to move, how much of a % increase would you expect to receive in your total compensation? 320 participants (candidates) responded to the following question: If you were to move, how much of a % increase would you expect to receive in your total compensation? Nothing, Up to 10%, 10 – 20%, 20 – 30%, 30 – 50%, Above 50%. The results of this question have come as a surprise, especially with 65% of respondents expecting to receive a compensation increase of 20% or more. This significant rise is likely due to the current economic conditions, such as the rising cost of living, economic uncertainty, and increased competition. As the market conditions cool, there is an expectation that compensation expectations will follow suit and adjust accordingly. We anticipate this realignment to occur over the next few years, culminating at the end of 2024 and the start of 2025. Companies should plan for a transition period as salaries are readjusted to reflect the current conditions of the marketplace. It is important to note that compensation packages may look different from what they have in the past, so employers should be prepared to adapt accordingly. Nothing 5.6%
Up to 10% 4.2%
30 – 50% 23.6%
10 – 20% 18.1%
20 – 30% 44.4% PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
06
SURVEY RESULTS Q: What is the most attractive benefit to you when looking to move? 320 participants (candidates) responded to the question: What is the most attractive benefit to you when looking to move? Working flexibility, Pension, Flexible benefits taken as cash or in direct benefits, Carry, Bonus potential, Other Flexibility is increasingly becoming the norm in the industry, and with good reason. Not only does it benefit employees, but it also can lead to improved job satisfaction and productivity. However, while flexible working is a significant priority for many employees in the sector, carry allocation remains an essential source of motivation and reward, especially for those who acknowledge the value of longer-term rewards over short-term rewards. Unfortunately, we have found that transparency around carry has diminished over time. This can be particularly problematic at entry-level positions, where there may be little to no information about carry or other incentives that could help motivate employees at this stage. As such, there is undoubtedly an opportunity for companies to take a more proactive approach to offer employees access to carry schemes earlier in their careers. Flexible benefits taken as cash or in direct benefits 6.8% Bonus potential 14.9%
Working flexibility 29.7%
Other 4.1%
Carry 44.6% PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
07
SURVEY RESULTS Q: Do current market conditions make you either more or less likely to leave your current employer? 320 participants (candidates) responded to the question: Do current market conditions make you: More likely to leave your current employer? Less likely to leave your current employer? No Change? Survey results indicate that the current market conditions make 25% of respondents more likely to leave their employer and 34.72% less likely to leave. 40.28% reported that their intentions remained the same. This survey suggests that external economic factors can significantly impact employees' job stability and mobility decisions. Employers must be aware of these trends when developing strategies to recruit, develop, and retain talent in the current climate.
More likely to leave your current employer 25%
No Change 40.3%
Less likely to leave your current employer 34.7%
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
08
GROWTH EQUITY Compensation for Analyst-level or equivalent investment professionals. Definition: Professionals at the entry-level of the investment industry. An Analyst assists in managing and monitoring portfolio companies under the direction of senior team members, analysing companies and business plans, performing financial modelling, conducting due diligence, and assisting with service provider relationships.
Focus: Private Equity Region focus: Europe Denomination: £
Experience
Relevant experience levels: 2 years 3 years Experience (relevant experience) is based on post-graduate, relevant experience.
Titles
Corporate titles vary per organisation, and these quantified grades do not account for variations such as early promotions and less hierarchical organisational structures. Similar industry titles include: Executive
Flash data
Market observation across fund sizes: Base salary low: £50,000 Base salary high: £90,000
Total comp low: £80,000 Total comp high: £160,000
Bonus low: £30,000 Bonus high: £70,000
Carry low: 0.00 Carry high: 0.7
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
09
INVESTMENT PROFFESIONAL Investment Analyst
40% 40/60 Female vs Male Participants
Candidates in the Private Equity market with 2-3 years of experience. This would include pre-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
150,000
100,000
50,000
0
Less than 100m
100 - 500m
500 - 1bn
1 - 10bn
10bn+
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
73,468
24,837
0
98,305
100 - 500m
76,230
27,903
0
104,133
500 - 1bn
80,667
36,807
0
117,474
1 - 10bn
82,457
48,972
0
131,429
10bn+
84,586
52,026
0
136,612
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
10
GROWTH EQUITY Compensation for Associate-level or equivalent investment professionals. Definition:
Professionals who have joined the industry typically post Investment Banking, Consulting, practice or upon graduation. Senior team members supervise Associates in analysing companies and business plans, financial modelling, due diligence, working with service providers, and assisting with portfolio company management (observer). Associates may oversee a junior, depending on experience. Focus: Private Equity Region focus: Europe Denomination: £
Experience
Relevant experience levels: 4 years 5 years 6 years Experience (relevant experience) is based on post-graduate, relevant experience.
Titles
Corporate titles vary per organisation, and these quantified grades do not account for variations such as early promotions and less hierarchical organisational structures. Similar industry titles include: Investment Manager Senior Associate
Flash data
Market observation across fund sizes: Base salary low: £70,000 Base salary high: £125,00
Total comp low: £85,000 Total comp high: £250,000
Bonus low: £15,000 Bonus high: £125,000
Carry low: 0.00 Carry high: 3.00
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
11
INVESTMENT PROFFESIONAL Investment Associate 1
38% 38/42 Female vs Male Participants
Candidates in the Private Equity market with four years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
0.75
0.71
0.897
0.97
1.07
100 - 500m
500 - 1bn
1 - 10bn
10bn+
200,000
150,000
100,000
50,000
0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
84,609
61,245
0.75
145,854
100 - 500m
88,047
65,634
0.71
153,681
500 - 1bn
97,829
73,917
0.897
171,746
1 - 10bn
99,619
85,361
0.97
184,980
10bn+
101,208
90,467
1.07
191,675
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
12
INVESTMENT PROFFESIONAL Investment Associate 2
35% 35/65 Female vs Male Participants
Candidates in the Private Equity market with five years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
0.82
0.89
0.981
1.06
1.17
100 - 500m
500 - 1bn
1 - 10bn
10bn+
250,000 200,000 150,000 100,000 50,000 0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
84,815
58,155
0.82
142.970
100 - 500m
89,341
63,199
0.89
152,540
500 - 1bn
98,818
72,302
0.981
171,120
1 - 10bn
103,699
80,255
1.06
183,954
10bn+
114,068
88,394
1.17
202,462
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
13
INVESTMENT PROFFESIONAL Investment Associate 3
33% 33/67 Female vs Male Participants
Candidates in the Private Equity market with six years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
1.07
1.16
0.897
1.39
1.53
100 - 500m
500 - 1bn
1 - 10bn
10bn+
250,000 200,000 150,000 100,000 50,000 0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
88,028
67,412
1.07
155,440
100 - 500m
92,234
70,856
1.16
163,090
500 - 1bn
102,323
78,606
1.283
180,929
1 - 10bn
108,323
86,017
1.39
194,340
10bn+
119,155
93,646
1.53
212,801
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
14
GROWTH EQUITY Compensation for VP-level or equivalent investment professionals. Definition:
A Vice President is an experienced executive who manages and leads deal teams at a company. In addition to identifying potential acquisitions, they may be expected to originate their investments. They may serve on the boards of portfolio companies as board members. Focus: Private Equity Region focus: Europe Denomination: £
Experience
Relevant experience levels: 7 years 8 years 9 years Experience (relevant experience) is based on post-graduate, relevant experience.
Titles
Corporate titles vary per organisation, and these quantified grades do not account for variations such as early promotions and less hierarchical organisational structures. Similar industry titles include: Associate Director Senior Investment Manager Principal
Flash data
Market observation across fund sizes: Base salary low: £80,000 Base salary high: £250,000
Total comp low: £100,000 Total comp high: £550,000
Bonus low: £20,000 Bonus high: £300,000
Carry low: 0.00 Carry high: 5.00
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
15
INVESTMENT PROFFESIONAL Vice President 1
28% 28/72 Female vs Male Participants
Candidates in the Private Equity market with seven years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
3.73
3.79
3.87
1.94
1.04
100 - 500m
500 - 1bn
1 - 10bn
10bn+
300,000
200,000
100,000
0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
108,342
79,964
3.73
188,306
100 - 500m
115,493
84,959
3.79
200,452
500 - 1bn
127,519
92,913
3.87
220,432
1 - 10bn
134,184
100,114
1.94
234,298
10bn+
147,275
123,827
1.04
271,102
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
16
INVESTMENT PROFFESIONAL Vice President 2
24% 24/76 Female vs Male Participants
Candidates in the Private Equity market with eight years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
4.03
4.12
4.23
2.33
1.47
100 - 500m
500 - 1bn
1 - 10bn
10bn+
300,000
200,000
100,000
0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
110,317
83,172
4.03
193,489
100 - 500m
119,780
90,306
4.12
210,086
500 - 1bn
132,009
99,526
4.23
231,535
1 - 10bn
143,171
107,942
2.33
251,113
10bn+
157,342
118,625
1.47
275,967
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
17
INVESTMENT PROFFESIONAL
21%
Vice President 3
21/79 Female vs Male Participants
Candidates in the Private Equity market with nine years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
4.16
4.26
4.53
2.51
1.76
100 - 500m
500 - 1bn
1 - 10bn
10bn+
£300,000
£200,000
£100,000
£0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
114,416
92,095
4.16
206,511
100 - 500m
124,230
99,994
4.26
224,224
500 - 1bn
136,913
110,203
4.53
247,116
1 - 10bn
148,491
119,522
2.51
268,013
10bn+
163,188
131,352
1.76
294,540
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
18
GROWTH EQUITY Compensation for Director-level or equivalent investment professionals. Definition:
A Director is an experienced executive who manages and leads deal teams at a company. In addition to identifying potential acquisitions and they manage divisional budgets. They will serve as board members on the boards of typically 3-4 portfolio companies. Focus: Private Equity Region focus: Europe Denomination: £
Experience
Relevant experience levels: 10 years 11 years 12 years Experience (relevant experience) is based on post-graduate, relevant experience.
Titles
Corporate titles vary per organisation, and these quantified grades do not account for variations such as early promotions and less hierarchical organisational structures. Similar industry titles include: Senior Investment Principal Jnr Partner Associate Partner
Flash data
Market observation across fund sizes: Base salary low: £95,000 Base salary high: £300,000
Total comp low: £155,000 Total comp high: £550,000
Bonus low: £60,000 Bonus high: £250,000
Carry low: 0.50 Carry high: 8.00
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
19
INVESTMENT PROFFESIONAL
19%
Director 1
19/81 Female vs Male Participants
Candidates in the Private Equity markets with ten years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
6.07
6.16
5.283
2.90
2.53
100 - 500m
500 - 1bn
1 - 10bn
10bn+
£400,000
£300,000
£200,000
£100,000
£0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
115,932
105,311
6.07
221,243
100 - 500m
125,876
114,344
6.16
240,220
500 - 1bn
138,727
126,018
5.283
264,745
1 - 10bn
150,458
136,674
2.90
287,132
10bn+
165,350
150,202
2.53
315,552
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
20
INVESTMENT PROFFESIONAL Director 2
18% 18/82 Female vs Male Participants
Candidates in the Private Equity market with eleven years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
5.03
6.12
5.287
3.33
2.47
100 - 500m
500 - 1bn
1 - 10bn
10bn+
£400,000
£300,000
£200,000
£100,000
£0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
128,364
109,475
5.03
237,840
100 - 500m
139,375
118,866
6.12
258,241
500 - 1bn
153,604
131,001
5.287
284,605
1 - 10bn
166,593
142,079
3.33
308,672
10bn+
183,082
156,141
2.47
339,223
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
21
INVESTMENT PROFFESIONAL Director 3
26% 26/74 Female vs Male Participants
Candidates in the Private Equity market with twelve years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
6.04
6.13
5.24
4.34
2.77
100 - 500m
500 - 1bn
1 - 10bn
10bn+
£400,000
£300,000
£200,000
£100,000
£0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
137,965
117,815
6.04
255,780
100 - 500m
149,799
127,921
6.13
277,720
500 - 1bn
165,092
140,981
5.24
306,073
1 - 10bn
179,053
152,903
4.34
331,955
10bn+
196,775
168,036
2.77
364,811
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
22
GROWTH EQUITY Compensation for Partner-level or equivalent investment professionals. Definition:
Expert dealmakers and senior firm members responsible for sourcing and originating investments. In addition to interacting directly with management teams and negotiating with them, managing partners are (typically) part of the firm's investment committee. Focus: Private Equity Region focus: Europe Denomination: £
Experience
Relevant experience levels: 13+ years+ Experience (relevant experience) is based on post-graduate, relevant experience.
Titles
Corporate titles vary per organisation, and these quantified grades do not account for variations such as early promotions and less hierarchical organisational structures. Similar industry titles include: Jnr Partner Managing Director Managing Partner
Flash data
Market observation across fund sizes: Base salary low: £175,000 Base salary high: £350,000
Total comp low: £255,000 Total comp high: £1,050,000
Bonus low: £80,000 Bonus high: £700,000
Carry low: 2.00 Carry high: 25.00
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
23
INVESTMENT PROFFESIONAL Jnr Partner
20% 20/80 Female vs Male Participants
Candidates in the Private Equity market with thirteen years to fifteen years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
7.012
8.16
5.283
4.39
3.53
100 - 500m
500 - 1bn
1 - 10bn
10bn+
£500,000 £400,000 £300,000 £200,000 £100,000 £0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
182,256
155,605
7.012
337,861
100 - 500m
197,889
168,952
7.16
366,841
500 - 1bn
218,092
186,201
5.283
404,293
1 - 10bn
236,534
201,947
4.39
438,481
10bn+
259,946
221,934
3.53
481,880
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
24
INVESTMENT PROFFESIONAL
11%
Mid-Level Partner
11/89 Female vs Male Participants
Candidates in the Private Equity market with fifteen years to twenty years of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
8.07
8.16
7.444
5.39
5.53
100 - 500m
500 - 1bn
1 - 10bn
10bn+
£600,000
£400,000
£200,000
£0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
234,077
159,433
8.07
393,509
100 - 500m
254,155
173,108
8.16
427,263
500 - 1bn
280,102
190,781
7.444
470,883
1 - 10bn
303,788
206,914
5.39
510,702
10bn+
333,856
227,393
5.53
561,249
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
25
INVESTMENT PROFFESIONAL Senior Partner
14% 14/86 Female vs Male Participants
Candidates in the Private Equity market with twenty years+ of relevant experience. This would include post-MBA individuals. Salaries are shown in £0 value. Carry is shown in the percentage points (2/20) model. Based on a single fund award.
Mean Carry Bps
10.70
9.16
8.283
7.39
7.53
100 - 500m
500 - 1bn
1 - 10bn
10bn+
£750,000
£500,000
£250,000
£0
Less than 100m
Fund AUM
Mean Base Salary
Mean Bonus
Mean Carry
Mean Total Compensation
Less than 100m
268,279
200,573
10.07
468,852
100 - 500m
291,291
217,778
9.16
509,069
500 - 1bn
321,029
240,011
8.283
561,040
1 - 10bn
348,176
260,307
7.39
608,483
10bn+
382,637
286,071
7.53
668,708
Carried Interest Calculator PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
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FINDINGS
1,314 participants contributed towards the Private Markets remuneration data for 2022 - 2023. Corporate levels grouped the participants (viz., Analyst, Associate, Director, Vice President, and Partner). Data were sorted according to base salary, bonuses, and carry allocations. This was sorted according to the main fund types within Private Equity (viz., Venture Capital, Growth Equity, and Large buyout funds).
Bonus ranges at Analyst generally did not exceed the threshold of 100%. At Vice President and Director level, there were examples of this being one or two times base. At the Partner level, bonuses varied primarily due to asset-raising success. There were examples of no bonus being paid at all, though this is rare. Carry allocations are always subjective to funds, with undisclosed terms and conditions. It is, however, clear that carry allocations are awarded as early as the Associate level, with more sizeable distributions being extended to professionals at the higher end of the corporate levels. Total compensation proportionally increased with an increase in assets under management. Distinguished compensations were noted between small- and mid-cap, small- and largecap, and mid- and large-cap funds. However, differentiation in total compensation amongst funds within similar AUM ranges was marginal.
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
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CONCLUSIONS Does your current talent attraction strategy meet the evolving state of the talent market?
01
Talent Attraction With the benefit of engaging with a range of sellside and buy-side professionals who represent diversity in seniority and professional and personal circumstances, we have identified common motivations that drive movement to new organisations and considerations toward such. Commercial/ fund confidence ranks at the top of the list, where candidates who are moving either to or between buy-side firms are strictly assessing the fundraising activity of potential employers. A healthy history of fund-raising and investor returns are strong indicators, alongside the quality of portfolio companies and respective activity. Closely associated with this are the ESG and Sustainability agendas of funds, where candidates are encouraged by firms with an established strategy (or intention to develop this where it is absent) and commitment to building a dedicated team who will deliver on this strategy. A lighter consideration, albeit still significant for some candidates, includes learning and development pathways. This is critical to candidates demanding that organisations be conscious of the active role they should play in one’s professional advancement. Candidates assess this through well-defined L&D plans; involved leaders; and the volume, nature, and quality of investment activity. Working models are the next of such considerations, where professionals greatly favour organisations that adopt a hybrid working model. Whilst Investment professionals value the importance of collaboration and inperson engagement, the opportunity to have flexibility in this regard carries a lot of weight.
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
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CONCLUSIONS What are the key influencers set to drive hiring over the next year?
02
Anticipated hiring 2023 – 2024 Over the coming financial year, Private Market firms will continue to afford equitable talent acquisition to grow and develop diverse teams and adapt to the changing market needs. General Partners are increasingly under the microscope for diversified teams. Since diversity is not a one-size-fitsall approach, we want to see how organisations will further define what diversity means to them and how this will inform talent acquisition, retention, and development strategies. Considering EU regulations informing responsible investing principles and the United Nations’ SDGs, Limited Partners are raising their demands which means that ESG and Sustainability teams will be scaling up rapidly. Of all the investment strategies, it is said that co-investing will be distinguished as more buoyant with investment activity. As a result, we expect that co-investors will showcase most investment professional hires over the next year. Whilst there are encouraging talent acquisition expectations, the likelihood of fundraising facing a degree of headwinds and a lengthier due diligence process depicts instances where non-critical business hires will be approached less aggressively. These non-critical hires may be regarded as those who either do not contribute to the bottom line or could be more influential in the growth of an organisation.
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS
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CONCLUSIONS How can you stay competitive in an evolving hiring market?
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Staying ahead of the talent demand It is apparent that having a thoughtful talent acquisition strategy which is attentive to the evolution of the market is critical. In this case, not only compelling remuneration structures but also exclusive variables which allow organisations to stay ahead of competitors. Flexible working arrangements should be supported, especially where workforces are addressing gender imbalances. Skilling and upskilling should remain an ongoing part of talent retention and talent development. The most successful hiring strategies will however be seen in streamlined and efficient hiring processes. This ensures a greater probability of securing talent, especially those who hold unique skills and those who are the aspired employees of many.
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ALTUS PARTNERS
Altus Partners Investment Practice, is an award-winning, highly talented team of specialists within their strategies and market verticals. We have completed over 1,000 searches throughout Europe for global funds, mid-market investors, family offices, growth and venture capital investors. Practice Team Ed Chamberlain, Partner Private Equity Patrick Gee, Principal Infrastructure & Real Assets Sam Block, Senior Associate Private Equity Harvey Von Biel, Senior Associate Private Credit Gizelle Moodley, Senior Associate Impact Investing/ ESG and Sustainability Thomas Amos, Senior Associate Infrastructure & Real Assets
Altus Partners 90 High Holborn, Holborn, London, WC1V 6LJ (0) 203 137 3250
www.altus-partners.com info@altus-partners.com
PRIVATE EQUITY SALARY REPORT 2023 | ALTUS PARTNERS