Private equity compensation changes 2018

Apollo Global Management co-founder Leon
Black.
Reuters

• Private equity is seeing the most active hiring market
  ever, as demand increases from new managers and existing firms,
  according to a new report. 
• Vice president-level candidates are receiving one to
  four new opportunities weekly.
• Compensation across levels is increasing, with managing
  partners seeing the biggest jump in base salary to
  $786,000.

It’s never been a better job market for private equity
professionals, with the sector seeing the most active hiring
market ever, according to a new report. 

In a survey of 630 North American investment professionals
released Tuesday, recruiting firm Heidrick & Struggles
found that more than half of respondents saw an increase in base
salary this year compared with 2017. More than three-quarters of
that group saw their base salary increase up to 20%. Managing
partners saw the biggest increase, with base compensation up
13.6%, to $768,000. 

Bonuses are rising, too: 77% of those surveyed said their bonus
increased from 2016 to 2017, with 90% reporting an increase of up
to 50%. 

As compensation ticks up, so are opportunities to move elsewhere.
Vice presidents reported receiving one to four new opportunities
weekly and said they’re becoming more selective about taking a
new job. 

Increasing compensation and opportunities come as US private
equity fundraising hits record highs. In 2017, the industry
raised $243 billion, up 5% over the prior year, according to data
provider Pitchbook. Dealflow is also at near-record levels, with
$594 billion of transactions in 2017, down just slightly from
2016’s record.

More institutional investors are adding private equity
capabilities, too. Foreign pensions and sovereign wealth funds,
including the Canada Pension Plan Investment Board and
Singaporean sovereign wealth fund Temasek, are hiring large
numbers of direct equity professionals. 

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