What does all in comp look like for MDs in the credit arms of MF? Places like Blackstone Credit/ Bain Capital Credit that have a blended investing approach between pure credit and mezzanine securities. Is comp similar to PE MDs? I know returns are generally lower in PC funds, but there is more AUM per investor , so not sure if those effects cancel out relative to pure LBO PE . Would really appreciate any data points/calculations.
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Interested would imagine a 15-20% haircut from the PE guys
AUM - $100B
Base - $300-$400k
Pure Cash Bonus - $500k-$1,000k
Carry/Profit Share - All over the place but has been pitched as a reasonable target is annual carry allocation equivalent to your base plus cash bonus. So if you are making $1mm a year cash then a million a year carry.
PM of the group can have several MDs reporting to them and make multiple of this
Curious why not just stay in banking, or do PE or L/S HF - comp delta seems huge?
$2mm PC vs $3-5mm banking (MD) vs $5mm+ for MF PE partner vs $1-10mm+ for HF partner?
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Learn moreAll viable considerations, it's a matter of preference and investing style, also some different risk profiles on longevity (L/S can blow up on you quick and you can be in no man's land fast). Once you get into multiple funds it can bet very lucrative, I was just giving perspective on carry.
In our shop, you aren't flying everywhere all the time. Many clients come to you, there is good deal flow and the lifestyle is very good considering you are in a MF equivalent. You can do more and really grind on origination if you want but you aren't running ragged like a sell-side MD from my perspective. People have been in their seats for quite sometime, many 10+ year guys.
Also, versus some of those options we are collecting cash for those bonuses, not RSUs and stock BS .
Chances are if you are good, you will end up leading a vertical and making multiples of what I listed.
You just laid out 4 wildly different career paths with different functions, responsibilities, and lifestyles. These are not fungible jobs with the only delta being comp. Not worth getting into but there is a long list of reasons why someone goes down one path vs another.
Thanks for providing some very useful information! How long does it typically take folks to get to the MD level, assuming they start as an associate and are very good?
Depends on abilities etc but one way to the think about it is about 4 years per role for Assoc, VP, Principal, then MD
Seeing all your helpful insights, curious if you've done a Q&A in the past? If you have, could you link it? Or if you haven't, would you care to start one? Will be going into a PC internship next summer and would like to get some further insight on the career.
I have not done a Q & A but have tried to provide answers here and there on threads. Glad it's been helpful for you, I may consider something more structured over the holidays.
Curious if you can comment on a few things.
(A). What is the comp progression like from Associate to Director at a firm of your size?
(B). I am currently an associate at a MM DL firm and was wondering how difficult is it for juniors like myself to make it to a MD/Partner role given that a lot of the seniors tend to stick around?
(C). What are your thoughts on the increase in capital markets roles at private equity firms? Have you ever considered moving over into that role? I've heard the job is more focus on the legal side and mostly spent negotiating the rights terms in credit agreements for new transactions and add-on's for your portco.
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