US buyout and growth equity funds with $5 billion or more in assets are paying senior associates an average salary of $435,000. This is a 4 percent increase from 2007, according to a report by executive search firm Glocap Search and information company Thomson Reuters.
At venture capital funds with $2 billion or more in assets, bonuses for associates rose 6 percent, due to competition with other private equity funds for junior candidates with deal and finance expertise, the report revealed.
Increasing direct investment activity from fund of funds firms drove competition for top talent, which in turn saw bonuses for vice presidents rise by 8 percent.
At buyout funds, average cash compensation at the principal level was $885,000, up 4 percent from 2007. Bonuses for principals also rose 6 percent, to an average of $607,000, said the report.
Compensation increased as the amount of capital under management grew, the report showed. Late stage private equity buyout funds pay the highest compensation levels, followed by venture capital firms and thirdly, fund of funds.
Combined with 2007, which saw record capital inflows, private equity funds have the resources to sustain compensation levels, and in many cases, increase them, according to the report.
“Compensation is up, but funds are taking a more conservative approach as they structure packages and consider promotions going forwards,” noted Brian Korb, senior partner at Glocap and head of its private equity practice.