Most PE professionals enjoyed raises in 2019

The money that continued to pour into the coffers of PE shops last year translated into higher salaries and bonuses for most investment professionals who worked at them.

Fifty-six percent of investment professionals reported getting raises last year, while just 1 percent experienced cuts in salary, according to the Heidrick & Struggles North American Private Equity Investment Professional Compensation Survey, released last month. More than three-quarters (77 percent) reported getting a higher bonus for 2018 performance than they did for 2017 performance.

All told, 895 investment professionals working at North American private equity firms participated in an online survey conducted last year by executive recruitment firmHeidrick & Struggles. They were asked to provide data from 2017, 2018 and 2019. The survey includes investment professionals with the titles of associate/senior associates, vice presidents, principals, partners/managing directors and managing partners.

The raises awarded were often substantial. Well over half of investment professionals getting a raise last year received a bump-up of at least 11 percent. Specifically, 30 percent reported a raise of 11 percent to 20 percent; 21 percent reported a raise of 21 percent to 50 percent; and 5 percent reported a raise of more than 50 percent. Fewer than half (44 percent) received raises of 1 to 10 percent.

Similar story for bonus payouts. For those reporting a bigger 2018 bonus, 30 percent saw a 11 percent to 20 percent increase; 30 percent saw a 21 percent to 50 percent increase; and 14 percent saw a more than 50 percent increase. Just 26 percent saw a 1 percent to 10 percent increase.

Two other interesting tidbits from the study:

  • Most senior investment professionals have earned MBAs, but the degree is by no means ubiquitous. Of 186 partners/managing directors participating in the survey, 101 have MBAs, 22 have JDs or other postgraduate degrees, and 21 have earned the CPA or equivalent designation.
  • Almost all investment professionals enjoy co-investment rights. Typically this means they can co-invest alongside the fund rather than pick and choose individual deals. Many also say that their firms provide leverage on the dollars that they co-invest.

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