Private Equity Compensation Soars in 2008

The 2008 edition of the Private Equity Analyst-Holt Compensation Study has been released and it was a damn fine year.

Salaries for North American private equity professionals (I’m going to try and find some figures for Europe) rose 5.3% to $200,000 from $190,000 year-over-year. When bonuses are included, compensation rose by 25% to $375,000 from $300,000. Throw in carried interest and total compensation packages rose by 27.3% to $401,000 from $315,000. All these lovely greenbacks add up to an even faster rate of growth than seen at the time of the last survey.

Buyout professionals posted compensation including carry distributions of $426,500, up 32.3%, and ahead of the $408,000 pulled in by venture professionals, a 16.6% increase. It’s important to note that there are more junior professionals in the buyout sample than in the venture sample, which drags the median among buyout firms down.

For those of us who will be graduating soon only 5% of those firms responding to the survey indicated that they’d cut staff, while far more said that they would continue to hire. Hot spots for private equity hiring include those firms in mezzanine, distressed debt, energy, infrastructure and those expanding internationally. Administrative positions such as investor relations professionals are very much in need as firms look to cope with recent increases in fund size.

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