Private equity is still the place to be for junior investment bankers. Salary, bonus and, most importantly, the big bucks you can earn through carried interest are all part of the buy-side's appeal. While competition is fierce, the recent explosion of new entrants into the U.S. market has opened up more seats. Three-quarters of private equity firms plan to increase the size of their workforce in 2019, up from 61% last year, according to research firm Preqin. The remaining 25% of respondents are assuming no headcount changes either way.
But just how much can you really earn in private equity? And which region tends to pay the best? For the charts below, we compiled base salary and total compensation averages for the U.S., Europe and Asia Pacific at all levels, with the discrepancies due to bonuses and carried interest. As you can see, the U.S. is clearly the place to be working when it comes to private equity. Total remuneration averages are higher at every rank in the U.S. with just one exception. Managing directors and partners in Europe report earning nearly $2.4 million in total remuneration, well above the $1.6 million and $892k, respectively, in the U.S. and APAC. However, the sample size at the MD level is always smaller, making those numbers more prone to yearly swings.
If U.S. private equity professionals are the winners, colleagues in Asia are on the short end of the stick, making well less at every rung. At the director and MD level, PE professionals in the U.S. earn roughly double that of their Asian counterparts. One reason may be how Asian firms are staffed. The median number of dealmaking employees dedicated to a PE fund is 17 in APAC; in the U.S. and Europe that number falls to eight. There are just more mouths to feed at Asian firms, it seems.
One other highlight to note: among the type of private equity funds (buyout, growth, real estate, venture capital etc.), real estate-focused firms tend to pay worse across the board, though things could certainly change a few years down the road. PE firms are currently doing a lot more buying than selling when it comes to real estate. Frankly, it may be a good time to try to get in on the ground floor.
How much will you earn working in private equity in the U.S.?
Private equity salaries in the U.S. range from $86k for analysts to $420k for MDs. Total remuneration for the year runs from $121k to $1.6 million.
How much will you earn working in private equity in Europe?
Private equity salaries in Europe range from $81k for analysts to $340k for MDs. Total remuneration for the year runs from $119k to $2.4 million.
How much will you earn working in private equity in Asia?
Private equity salaries in Asia range from $57k for analysts to $333k for MDs. Total remuneration for the year runs from $73k to $892k.