Thinking About Getting Into Private Equity? Hear What Glocap Says About Hiring Trends and Salaries in PE
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It's a given that the finance industry is not the easiest place to find a job at the moment. For our next MBA Podcaster story, we're investigating what kinds of salaries those few MBA grads lucky enough to land a job in investment banking, consulting, or private equity can command. How is the recession affecting MBA grads' salaries in these sectors?
Last week I talked with Brian Korb, a Partner at Glocap Search, a recruiting firm focused mainly on alternative assets. Korb heads up Glocap's Private Equity practice. Glocap recently published the 2009 Private Equity Compensation Report, which provides data on base salaries and bonuses paid to professionals at later-stage private equity firms (buyout/growth equity funds), early-stage venture capital firms and private equity funds.
"What drives compensation is the caliber and pedigree of the candidate you're going after, and what you can afford to pay," Korb said. So where is compensation going? Up until this year, it had been a very hot market, Korb said, but once the market's growth slowed down, compensation's growth slowed too. So compensation growth in private equity, anyway, is flat. But compensation hasn't necessarily shrunk, either.
Korb said what's changed, overall, is the variance in compensation for the top performers vs. the good and mid-level performers. Top performers, quite simply, can still get the high salaries and even bonuses, but bonuses are flat or shrinking for less-than-stellar job performances at a fund or firm.
"Ultimately, there's less hiring," Korb said. Compensation offers are going out to fewer people. But he said those grads who do get the top jobs are still getting the salaries in private equity, and the shrinking pool of bonuses is going to top performers in any given firm.
In investment banking, bonuses are down by 25 to 50%, Korb said, but if there are bonuses to be had, the top-tier performers are the ones who will be taking them. There's a silver lining to TARP restrictions on bonuses, too, Korb said: Some banks are raising base compensation to make up for restricted bonuses, Korb said.
The other thing happening is salaries are increasing more slowly, Korb said. "The annual raises and salary bumps have flattened out, " he said.
So how does an MBA grad land a job in private equity in this economy? Korb said his clients have always strongly preferred, if not required, a candidate to have private equity experience before business school. Korb advises this year's MBA grads, even those who have that previous experience not to rest on their laurels. Successful candidates will have to be able to prove in concrete terms that they can add value to a fund. Korb said his clients tell him, "We're always interested in someone who can bring a lot of value."
Check back with us soon for the full show on finance salaries for MBA grads.
Last week I talked with Brian Korb, a Partner at Glocap Search, a recruiting firm focused mainly on alternative assets. Korb heads up Glocap's Private Equity practice. Glocap recently published the 2009 Private Equity Compensation Report, which provides data on base salaries and bonuses paid to professionals at later-stage private equity firms (buyout/growth equity funds), early-stage venture capital firms and private equity funds.
"What drives compensation is the caliber and pedigree of the candidate you're going after, and what you can afford to pay," Korb said. So where is compensation going? Up until this year, it had been a very hot market, Korb said, but once the market's growth slowed down, compensation's growth slowed too. So compensation growth in private equity, anyway, is flat. But compensation hasn't necessarily shrunk, either.
Korb said what's changed, overall, is the variance in compensation for the top performers vs. the good and mid-level performers. Top performers, quite simply, can still get the high salaries and even bonuses, but bonuses are flat or shrinking for less-than-stellar job performances at a fund or firm.
"Ultimately, there's less hiring," Korb said. Compensation offers are going out to fewer people. But he said those grads who do get the top jobs are still getting the salaries in private equity, and the shrinking pool of bonuses is going to top performers in any given firm.
In investment banking, bonuses are down by 25 to 50%, Korb said, but if there are bonuses to be had, the top-tier performers are the ones who will be taking them. There's a silver lining to TARP restrictions on bonuses, too, Korb said: Some banks are raising base compensation to make up for restricted bonuses, Korb said.
The other thing happening is salaries are increasing more slowly, Korb said. "The annual raises and salary bumps have flattened out, " he said.
So how does an MBA grad land a job in private equity in this economy? Korb said his clients have always strongly preferred, if not required, a candidate to have private equity experience before business school. Korb advises this year's MBA grads, even those who have that previous experience not to rest on their laurels. Successful candidates will have to be able to prove in concrete terms that they can add value to a fund. Korb said his clients tell him, "We're always interested in someone who can bring a lot of value."
Check back with us soon for the full show on finance salaries for MBA grads.
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