PE HUB Wire Highlights, 10.30.19

Compensation spikes across PE as fundraising nears record level, Ex-Lariat Partner re-activates independent sponsor shop

Happy Wednesday!

We have our Family Office Connect conference today here in NYC. If you’re heading over to Harvard Club today, look for LP reporters Justin Mitchell and Teddy Grant who will be listening in.

Comp: It’s all about the money today, Hubskis.

We have some interesting findings from our 2019-2020 Holt-MM&K-Buyouts PE/VC Compensation 2019-2020 Report compiled by Michael Holt and Joseph Weitemeyer.

As fundraising ramped up to near-record levels over the past few years, compensation has also spiked for many employees at North American private equity and venture capital firms between 2018 and 2019.

Buyouts and mezzanine firms are poised to raise more money than last year, according to Buyouts data. And with heavy fundraising, fees are generally between 1.5 percent and 2 percent of commitments. This means firms will have more money flowing in from management fees and therefore more money to pay employees. Check out my story here.

Particularly for senior professionals, compensation jumped dramatically, especially when carried interest starts flowing, according to the survey. More junior professionals only saw modest increases over the past several years, the survey found.

(Though to be fair, those junior professionals on average are still pulling in some amazing comp compared to some other professions … ahem …)