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Economically they are unable to pay market for like for like YoE on direct investment teams. Average blended fee rate is sub-20% and they pay carry as ordinary income in addition to targeting 40% carry to investment professionals which is lower than peers. They have dragged out their titling so their “VP equivalent” might be closer to market on at the investment leader level but their target timing for that is 5-8 years post starting as an associate post banking so closer to being a principal. They start MBAs as associates with ~4 years for top performers to hit investment leaders.
That being said if you are considering a seat there you either are looking to move to Denver, moving up market, or getting pushed down market so it’s not the worst place to land and may be best option but it’s not anyone’s first choice at the mid-level.
Thanks for the info, very helpful.
Will you say fund and direct investments professionals are paid the same?
Investment Leader I believe should be around $500k total cash with apparently an additional $500k/yr paid in carry. Curious how variable this carry and bonus structure is or if reasonable to expect to this comp generally
That is generally in line with my understanding of TC for direct private equity professionals though cash may be a bit heavy in down years like last year. Real estate and infrastructure will lag that number and debt will lag significantly. Also a portion of that "cash" comp number is deferred 3 years (1/3, 1/3, 1/3) in PGHN stock.
That "carry" number however needs to be handicapped downwards to make it like-for-like with other firms given its ordinary income vs. capital gains. Back of the envelope math on an extra 17% of tax in New York City implies PG carry is worth ~74 - 75c on the net post tax dollar compared to typical fund carry. Said a different way, for every 500k of carry in the sub-$1m tax bracket you will get around 340-350k in the industry standard capital gains carry regime compared to ~260k under PG's ordinary income carry regime.
Fund and direct investment professionals are paid differently with the primary difference being size of annual carry allocation though cash lags at points as well.
PE comp is highest in the firm. Not sure how much cash varies between focuses, but PE is where carry is usually highest. Denver is US headquarters and most likely where they will require you to be. Overlooks mountains. New York office is in a good spot, but harder to get into since the focus on Denver. Houston is strictly Infra and some client side.
Ah good to know, thanks man.
I may have mis-heard but someone mentioned that all carry is pooled together so everyone gets the same carry essentially even if PE generates the most carry. But obviously makes sense the focuses which generate the most carry get the most carry
Infra is also interesting, any idea how they are viewed within the firm and if carry is not a huge discount to PE?
Could be wrong on carry. But believe it is not 100% even across the board. Bonuses on PE are usually largest. Don’t know about comp on Infra side, but the top management focus and investment volume is growing
You get dollarized slugs of "carry" every year which is indexed to your investment type. Ie; you might get 70% PE carry and 30% "pooled" carry across all investment types as a % of your dollarized number. Its just that the number given to direct PE is higher than other investment types across the firm.
Senior people on non-investment teams get slugs of pooled carry across all investment types.
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