Private equity firms tend to attract top talent. Because of the vigorous due diligence process as well as the negotiation and deal-making skills required, compensation in private equity firms tends to be above average for finance professionals. At private equity firms focusing on corporate deals, compensation tends to be comparable to investment banking roles.
A recent private equity compensation report stated that the average yearly compensation for professionals in private equity or venture capital was $272,000 USD. This is not even including the anticipated yearly bonuses, which range from $43,000 to $94,000 USD depending on performance. Furthermore, the compensation for those holding senior positions such as Vice Presidents, Directors and Managing Directors ranges from $300,000 to as high as $10,000,000 a year. Currently a private equity analyst at the US based Blackstone Group L.P earns a salary from USD 50K – USD 200K, while a private equity analyst in London can gross a total pay ranging from GBP 20K – GBP 60K per annum. For comparison, a first year analyst at an investment bank earns between $70K – $150K USD while managing directors and partners can earn anywhere from $500K to $20MM. Other benefits and incentives usually offered at private equity firms include carried interest, severance packages, coverage of relocation expenses, training programs, investment in the companies which the firm has interests in and profit sharing plans.
Of course it bears mentioning that this level of compensation does not come easily. Those interested should definitely take the time to consider whether they are willing to put in the time and effort necessary to reap the rewards of a career in private equity.