Private Equity Salary (Top Funds) (2024)

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Overview

Private equity is a very lucrative career. As an asset class, private equity has enjoyed tremendous success over the past decade. Investors around the globe continue to pile their money into private equity firms. Dry powder (i.e., available cash that private equity firms can invest) hit a record high of $2.5 trillion in 2019. There is a lot of money to go around.

Private Equity Salary (Top Funds) (1)

Private equity firms buy companies. Then, they operate and try to improve those companies. Finally, they try to sell these companies at a profit. Private equity employees are compensated for making good investment decisions. The larger and more successful the investment, the more money there is to go around. Mega funds offer large salaries in part because they manage large quantities of money.

If you’d like to learn more about how to break into private equity, feel free to check out our Private Equity Recruiting Course.

The Private Equity Associate

The Private Equity Associate is typically the lowest-ranking employee at a private equity firm. The Associate is typically a mid to late 20’s person with a prior background in investment banking, consulting, or other deal-related financial services.

In this post, we’ll do a benchmarking exercise of Associate pay at mega funds. It’s the easiest to try and standardize Associate pay because:

  • There is the greatest volume of Associates (they are at the bottom of the pyramid), so we have a lot more data to work with.

  • Associates generally don’t receive carry (i.e. a portion of profits in the fund), so we can just calculate cash and bonus salary to get to a decent answer.

  • People get dodgier about their salary as they get older, so there’s less transparency.

In short, if you’re at a top mega fund, then you can expect to get paid between $350-$400k per year. These numbers reflect total compensation paid to private equity associates in 2022.

Private equity pay increased in 2022, largely driven by competition from other professions such as investment banking and big tech paying large salaries in 2021.

We note that similarly-aged hedge fund analysts on average make a similar amount to private equity associates, but there is a much wider variance across hedge fund salaries. Variance in salary is one of the key differences between private equity firms and hedge funds.

Methodology

We're going to start by ranking all of the private equity firms in the world based on their latest flagship fund size. The flagship fund typically refers to the main fund that a private equity firm is going to invest out of.

Flagship fund size tends to be correlated with what private equity firms pay their employees, as employee salaries are partially paid by the management fees on funds.

Note that this ends up being a list of the largest private equity funds and asset managers in the world. They manage the most amount of money and generally hire between 6-12 Associates globally every single year.

Next, we’re going to consult our reliable friend, the H1B Database, which compiles the base salaries of all U.S. employees under the common H1B visa. We lay out the lowest and highest figure we can find for the Associate position at each firm, exercising some judgment to ignore outliers.

Private Equity Salary (Top Funds) (2)

We then apply a bonus range of 150-200%, which is the approximate range paid to associates in 2022. This bonus range was derived from industry sources and cross-referencing other compensation studies.

We recommend examining the Heidrick & Struggles report if you are interested in looking at more data regarding private equity compensation.

Observations

  • Base Salary: Most top Private Equity Associates are going to make between $125k and $145k for their base salary. This is what goes into your bi-weekly paycheck.

  • Bonus: The bonus is a lot harder to standardize, but from my personal experience and that of my peers, the bonus range is typically around 150-200% of the base salary. This depends a lot on the fund performance, group performance, and your own performance. The bonus is a lump sum cash payment that is paid annually.

  • All-In Comp: When you combine the base salary and the bonus, you get your all-in compensation. I think this bonus % is a little bit on the conservative side and I would say an appropriate range is $350k to $400k all-in compensation as an Associate. A

  • Apollo Global Management: Apollo Global Management is frequently reputed to be the highest-paying firm on the street in terms of all-in compensation, paying their Associates upwards of $450k per year. They have an enormous fund and have an incredible track record of success. They also have a reputation of being pretty intense, but hey, this is private equity we’re talking about.

  • Annual Raise: The Private Equity Associate program typically lasts 2-3 years. This is more anecdotal, but each year, you can expect between a $25k to $50k raise. This amount will balloon when you get promoted.

Below is a summary chart from the Heidrick & Struggles report that looks at private equity compensation by role. We note that this data looks at 2021 compensation and is self-reported.

Private Equity Salary (Top Funds) (3)

There are two other factors in private equity that can materially drive how much money you make: carry and co-invest.

Carry

Private equity firms are paid based on how much profit they can generate from their investments. They are given a portion of this profit, which is known as “carry”. The thing is, most associates don’t get carry. At mega funds, it’s essentially unheard of, and even at sub $1B funds, fewer than 1/5 of people get carry.

I think this is partially because the Associate position is relatively high attrition, and it’s annoying to give Associates carry when they might leave in the next year or so. Private equity fund duration can be up to 10 years and carry payments aren’t going to be received evenly over the course of a couple of years, so it’s tough to divvy up.

Private equity firms also have no incentive to give their precious carry to the Associate. It’s not the market standard and Associates already get paid a very high amount for their age.

Co-Invest

Co-investing occurs when you can invest alongside the private equity firm into a deal or fund. This means that when the firm buys a company, you can throw in some money and get some equity in the business. If your fund does what a private equity firm is supposed to and returns 15-20%+ annually, then you might be able to grow your money quickly and safely by co-investing.

The ability to co-invest is theoretically pretty cool because a lot of mid-20s people aren’t going to have access to attractive alternative investments. Note that less than half of all funds even allow co-invest.

One important consideration is that co-investing will have the illiquidity issues that private equity as an asset class has. If you have a large payment coming up (e.g., business school, buying a house, etc.), it might be hard to have a lot of money tied up in a private market investment that you can’t sell out of.

Conclusion

All things considered, you’re going to make $350k to $400k at a top private equity fund as an Associate.

Private Equity Salary (Top Funds) (2024)

FAQs

Private Equity Salary (Top Funds)? ›

In short, if you're at a top mega fund, then you can expect to get paid between $350-$400k per year. These numbers reflect total compensation paid to private equity associates in 2022.

What are top salaries in private equity? ›

Private Equity Managing Director Salary + Bonus: Compensation here is highly variable, but a reasonable range is $700K to $2 million, with slightly less than half from the base salary. “Senior Partners” will earn more if the firm makes the distinction.

What are the salaries at private equity fund of funds? ›

Private Equity Salary, Bonus, and Carried Interest Levels: The Full Guide
Position TitleTypical Age RangeBase Salary + Bonus (USD)
Associate24-28$150-$300K
Senior Associate26-32$250-$400K
Vice President (VP)30-35$350-$500K
Director or Principal33-39$500-$800K
2 more rows

How much does a VP at a private equity firm earn? ›

Private Equity Vice President Salary in California
Annual SalaryWeekly Pay
Top Earners$241,298$4,640
75th Percentile$187,500$3,605
Average$143,004$2,750
25th Percentile$113,500$2,182

How much do the top private equity earners make? ›

Salaries + Bonuses at private equity funds in the USA by fund size, 2023
Fund Size
Rank< $500m$40bn+
Principal$490k$920k
Partner/Managing Director$550k$1325k
Managing Partner$550k$1763k
2 more rows
Nov 16, 2023

What is the average salary of a CEO private equity? ›

How much does a Private Equity Ceo make? As of Apr 16, 2024, the average annual pay for a Private Equity Ceo in the United States is $82,146 a year. Just in case you need a simple salary calculator, that works out to be approximately $39.49 an hour. This is the equivalent of $1,579/week or $6,845/month.

How much do KKR directors make? ›

The average Director base salary at KKR is $187K per year.

How much does a principal make at KKR? ›

How much does a Principal make at KKR in the United States? Average KKR Principal yearly pay in the United States is approximately $248,270, which is 137% above the national average.

How much do KKR PE associates make? ›

$218K (Median Total Pay)

The estimated total pay range for a Private Equity Associate at KKR is $169K–$285K per year, which includes base salary and additional pay.

How much do private equity associates make at KKR? ›

$172K (Median Total Pay)

The estimated total pay range for a Associate at KKR is $145K–$208K per year, which includes base salary and additional pay.

How much does a VP of private equity make in NYC? ›

The estimated total pay for a Vice President, Private Equity is $304,795 per year in the New York City, NY area, with an average salary of $176,028 per year.

How much does a CFO of a private equity firm make? ›

Cfo Private Equity Salary
Annual SalaryMonthly Pay
Top Earners$257,500$21,458
75th Percentile$182,500$15,208
Average$151,302$12,608
25th Percentile$101,500$8,458

How many hours do private equity VP work? ›

At many smaller funds and middle-market funds, you can expect to work 60-70 hours per week, mostly on weekdays, with occasional weekend work when deals heat up.

Is private equity a prestigious career? ›

Working at a Private Equity Firm

The private equity business attracts some of the best in corporate America, including top performers from Fortune 500 companies and elite management consulting firms.

Is private equity a stressful job? ›

but nowhere near as much as in management consulting. While the travel will be less, the work in private equity is very stressful and demanding, so the hours you actually spend working may be more stressful or mentally demanding.

How much does the average person in private equity make? ›

What Is the Average Private Equity Firms Salary by State
StateAnnual SalaryMonthly Pay
California$89,038$7,419
Maryland$88,832$7,402
Tennessee$88,240$7,353
Utah$87,969$7,330
46 more rows

How much does a Principal make at KKR? ›

How much does a Principal make at KKR in California? Average KKR Principal yearly pay in California is approximately $248,270, which is 137% above the national average.

Does private equity pay better than consulting? ›

PRIVATE EQUITY WINS. Compensation. The package is often designed to attract investment bankers, who are better paid than strategy consultants. As a consequence, you should expect a significant increase in your total compensation package, up to 100% in some cases.

How to negotiate salary in private equity? ›

How to negotiate equity in 9 steps
  1. Research the company. ...
  2. Review the company's financial potential. ...
  3. Research similar companies. ...
  4. Read the offer carefully. ...
  5. Evaluate the terms of the offer. ...
  6. Address your needs and the company's needs. ...
  7. Speak with the employer during negotiations.
  8. Keep your negotiations focused.
Feb 13, 2024

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