An ex-investment banker encourages some introspection. More

Which universities did private equity professionals at some of the largest firms attend?

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Hiring managers, attenzione. (And those of you with dusty resumes, take a gander). More

Not new info, but top private equity firms by AUM in table form.
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Part I is here, from their late March filing. Choice excerpts below from their 6/21 S-1 for the most part … More

Here’s the filing for those who haven’t scanned already. Couple excerpts on comp:

• “We have no severance arrangements with any of our professionals. Accordingly, unlike in the case of many public companies, the departure of an executive officer or other senior managing director would not trigger any contractual obligation on our part to make any special payments to the departing professional. Moreover, following this offering Mr. Schwarzman will receive no compensation other than a $350,000 salary (and will own a significant portion of the carried interest earned from our carry funds).”
• “Because we believe that the talents and dedication of all of our employees contribute to our success, we intend to make equity awards to all of our approximately 710 non-senior managing director employees at the time of this offering.”
• Carry Dollars Created (Total)
  • 2006: 2,179,471,000 (which means gains were ~ $10 BN)
  • 2005: 568,627,000
  • 2005: 686,100,000
• “Our 57 senior managing directors have an average of 22 years of relevant experience. This team is supported by approximately 335 other professionals with a variety of backgrounds in investment banking, leveraged finance, private equity, real estate and other disciplines.”
• “For most carry funds, the carried interest is subject to an annual preferred limited partner return ranging from 7.0% to 9.0%. If, as a result of diminished performance of later investments in a carry fund’s life, the carry fund does not achieve investment returns that (in most cases) exceed the preferred return threshold or (in all cases) the general partner receives in excess of 20% of the fund’s net profits over the life of the fund, we will be obligated to repay the amount by which the carried interest that was previously distributed to us exceeds amounts to which we are ultimately entitled … In the case of our proprietary hedge funds, performance fees (or similar incentive allocations) are equal to 20% of the applicable fund’s net capital appreciation per annum, subject to certain net loss carry-forward provisions (known as a ‘high water mark’). In the case of some of our funds of hedge funds, we receive incentive fees ranging from 5% to 10% of net appreciation per annum, subject to a high water mark and in some cases a preferred return.” More

• UK regulatory body FSA has published a discussion paper and is soliciting comments on regulation of private equity. Highest on their list of potential risks is market abuse and conflicts of interest. Send comments on the paper to Bloomberg)
• The DOJ is conducting an “informal inquiry” into PE and has sent letters to the Carlyle Group; Clayton, Dubilier & Rice; KKR, Silver Lake Partners and most recently, Merrill Lynch’s private equity arm (MarketWatch)

The WSJ profiles the top private equity firms by AUM, topped by the Carlyle Group with more than $44 BN in AUM, to Kirk Kerkorian-helmed Tracinda which doesn’t disclose assets (but by its placement in the list, is managing somewhere south of $6 BN).

Here’s the link to the handy print version which lists AUM, recent deals, sector specialties, etc. that you can study on your way to the interview.

We’ve got our grubby hands on a survey with 1st, 2nd and 3rd year base + bonus comp numbers for private equity associates. And we’re going to share some of it with you.

While there are figures for ~ 50 companies (8 are UK), we’re not going to just upload the spreadsheet because a) we have no idea if they are really accurate, and b) we’re afraid of getting sued or something.

Before you try to trip us up, here are some disclaimers: any figures in GBP were converted to USD. Discrepancies between total and base + bonus are due to rounding.

Yeehaw, here we go: averages/medians.

Base / bonus / total

• 1st year associate: (based on 48 data points)
  Average — $86k / $87k / $172
  Median — $80k / $80k / $160k
• 2nd year associate: (based on 15 data points)
  Average — $95k / $111k / $206k
  Median — $85k / $105k / $210k
• 3rd year associate: (based on 4 data points)
  Average — $98k / $159k / $256k
  Median — $98k / $160k / $263k

Sound about right? Contribute your numbers and we’ll add them into the mix.

Q: How does one get a job in P.E.? What’s the typical track? More