Apart from the fact that it’s part of Lloyds Banking Group, which is effectively part of the British government, Lloyds Development Capital (LDC) has several things going for it.

Not only has it generated an internal rate of return of 30% since 2003, but as the Telegraph points out today, it pays its employees on a deal by deal basis.

Given that LDC is Lloyds’ private equity arm, this makes it look rather appealing.

Co-invest is better than carried interest

Most private equity companies pay their employees carried interest based on the performance of an entire fund, meaning that a few good investments can be soured by several bad ones. LDC, by comparison, “pays out on individual deals, which means even if nine make a loss, directors profit if a tenth makes money,” points out the Telegraph.

Private equity recruiters say such arrangements are, in fact, rather common at captive funds run by banks.

“Technically, private equity investments made by banks don’t come from a dedicated fund and they don’t have outside investors,” says Gail McManus at Private Equity Recruitment. “As a result, they don’t pay carried interest, but run co-invest schemes which pay out when an individual deal is exited.”

David Howell, chief executive of recruitment firm EM Group, says deal-by-deal payments are more common in early stage start-up funds, but that they’re unheard of at the major international private equity houses. .

There are no exits anyway

In the current circumstances, however, no one’s getting paid – regardless of whether they’re rewarded on a deal-by-deal basis, or for the performance of the fund as a whole.

This is because it’s still hard to exit existing investments, and it doesn’t appear to be getting any easier.

Despite promising moments such as Bridgepoint’s successful sale of Pets at Home for 1bn in January and 3i’s sale of a Nordic healthcare provider €850m, many funds are still locked into investments made during the past few years.

Tumultuous markets mean many private equity backed IPOs have been pulled since the start of the year.

“There are a lot of people who haven’t received any carried interest for a few years,” says Howell. “Payments are generally related to exits,” says McManus. “There haven’t been many exits, so there haven’t been many payments – neither of carry, nor co-invest.”