We’re a little late on this, but it remains worth pointing out that – for some – people, a career in private equity can be incredibly lucrative.
For the first time ever, Carlyle published details of its staff pay this week. They show that the three founding partners each received base pay of $275k, a bonus of $3.5m and $134m of carried interest.
As the Wall Street Journal points out, Carlyle’s founders appear to have done disproportionately well: the three of them shared 50% of the carried interest generated last year themselves, leaving their remaining 1,093 colleagues to split the rest.
Just because some people become inordinately wealthy working in private equity, doesn’t mean you will too, therefore.
Gail McManus, chief executive of private equity recruitment firm PER, says most PE funds will match banks’ salaries when they’re hiring at analyst or associate level. “Analyst and associate salaries in private equity range from £55-80k,” she says.
Bonuses will depend upon the size of the fund you’re joining. If the fund has less than £100m invested, your bonus is likely to be no more than 30% of your base salary. At funds with £500m+ under management, it could be more than 100%.
As Carlyle has reminded everyone, however, the real money is in the carried interest. And the carried interest is mostly reserved for people at the top of the pyramid.
“It’s quite common to get some carried interest after a couple of years, but it will only be a notional amount,” says McManus. “It’s quite usual to get it at VP level and above, but there are some large funds where you won’t get it until director level.”