VP carry at small 200M fund
Recently had my carry comp discussion and honestly a bit disappointed. Not only by the carry points but also the general pool. Looking for advice to know if this is market. Background: smaller fund with 200M committed (not fully deployed) based out of Midwest with small team of 6. Any carry is first split 85/15 with 15% going to employee pool. The employee pool is then split 8.5/7.5 with 8.5 being allocated and 7.5 being unallocated for discretionary distribution. My carry points are 0.75 (1 =1%) of the entire Carry total. Therefor, (using simplified math so don't come at me) if the TOTAL carry ends up being 25M, I would see about $187k.
Am I getting hosed?
Comments ( 15 )
Pretty light. Can look for comp survey from one of the head hutners.
That seems incredibly light. Would expect double that at least
Seems very low...should be at least 2%. Check out this report for benchmarking
https://www.heidrick.com/-/media/heidrickcom/publications-and-reports/2022-north-american-private-equity-investment-professional-compensation-survey.pdf
Seems low but how are you getting $25m carry off a $200m fund? 2x return at 20% carry would be $40m, no? For VP, would expect 3x+ that amount. Is cash comp also low due to fund size?
Very light. I have 1% as associate 2 in London, larger size fund but still MM
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Learn moreDamn homie that's low, but you said it's a small fund based in the Midwest, so they probably know you don't have much leverage.
Insanely low. Should expect DAW that looks more like $500k for a fund that size, and potentially up to $1M
I'm confused by your comment about only 15% of the carry goes to the team. Where does the rest go? And why is so much of the team carry unallocated? That's weird.
85% goes to the managing partners I would assume.
That's extremely low and if the principals are snatching 85% of carry ... leave
You said it's a team of only six people? How many people are in the employee carry pool vs. the principals? Are there any people junior to you and do they receive any carry? How recently did the team expand? Is there more team growth likely or do you think that you could end up doubling your carry via the unallocated pool?
This does feel a bit light but not insanely so. I think the answer really depends on the answers to my questions above. If you're the most junior person on the team and the principals are just starting to dilute themselves, maybe they understand that they'll need to significantly dilute their carry in the future. Or maybe they don't care and are only in the business of their long-term needs and view you as an expendable resource. You'd know best qualitatively how things look.
Is this the firm's first fund / when was it raised? In any case, sounds like you're being cut short unless your WLB is amazing and this is more truly a lifestyle shop.
That seems very light to me. Carry dollars at work should be at least $1M in my opinion and ideally ~$2M. Maybe even more if you're coming from a bigger shop moving down-market and are taking a base/bonus cut.
If you're not from a traditional background, are very light on PE experience, etc, then maybe I could see a small carry package to start, but again, annualized over 10 years, $1M is only $100k/year on top of your base+bonus, which I'd imagine is pretty light given the management fees on a fund of that size.
To me, anything less than a million and you're getting hosed.
what do you mean "$1M carry dollars at work"?
Does that mean you need to have $1MM equivalent of the GP position in the fund, each fund has a different GP/LP split?
Also, most firms raise new funds and grow, is $1MM the starting point? and with each new fund you get another $1MM?
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