When you're the guy who does the work
After the WeWork debacle and the apparent shortcomings of the'tech whispering team' of Vision Fund operationsprofessionals led by Gerry Lopez, you might be forgiven for wondering whether a career as a private equity operations guy is really worth the pain. A brief look at headhunter Heidrick & Struggles' new salary survey for PE fund operations people suggests that, yes, it probably is.
In your early career as an associate in an operations role with a private equity fund, Heidrick says you can expect to earn $269k a year in combined base and bonus in the U.S.. As a vice president (VP), you can expect $349k. This compares pretty favorably to Heidrick's figures for private equity investment professionals (the most recent of which date back to 2018)...
Heidrick & Struggles defines associates as the 'most junior, entry level' people in PE funds, who are mostly engaged with 'research and analysis'. Vice presidents in operations functions are a notch above and actually get exposure to the companies in the portfolio.
The real money in private equity operations jobs, however, goes to the operating partners and managing directors and most of their money comes in the form of carried interest when deals are exited at a profit. While salaries for operating partners hover between $323k and $571k and bonuses go from $117k to $801k, Heidrick found operating partners whose carried interest was $17m+ last year.
Operating professionals work with investee companies to improve their performance. By comparison,'investment professionals' at private equity fundsspend their time identifying companies for private equity funds to invest in and closing deals. As a rule of thumb, operating professionals are more likely to come from consulting firms, whileinvestment professionals are more likely to be ex-bankers.
The chart below shows average carried interest per deal for operating partners and how long you can expect to wait for it. WeWork excepted, there's still good money to be made as an operating professional in PE.
Carried interest for operating professionals:
Source: Heidrick & Struggles
Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)
Photo byChristopher BurnsonUnsplash
FAQs
The estimated total pay for a Private Equity Operations is $192,343 per year in the United States area, with an average salary of $121,128 per year.
How much do operating principals make in private equity? ›
On average, Principals at mid-sized-to-large firms in the U.S. earn in the $500K – $800K range in terms of base salary + year-end bonus. These numbers will be lower in other regions, such as Europe and Asia, and at smaller funds, such as a startup PE firm with $100 million under management.
What is an operating partner at a PE firm? ›
The operating partner essentially ensures the PE firm's goals are being met at the company. If there are any missing pieces in terms of team members, operational efficiency, or timeline clarity, the operating partner steps in to address the issues and make sure the company gets up to speed.
Is private equity a high paying job? ›
Private Equity Associate Salary + Bonus: Your salary + bonus will probably be in the $150K to $300K range, depending on the size of the firm and your performance. Some of the large funds may pay more than $300K, but we're using the 25th percentile to 75th percentile range as a reference here.
What is the highest salary in private equity? ›
Highest salary that a Private Equity Associate can earn is ₹45.0 Lakhs per year (₹3.8L per month). How does Private Equity Associate Salary in India change with experience? An Entry Level Private Equity Associate with less than three years of experience earns an average salary of ₹15.4 Lakhs per year.
Is private equity a stressful job? ›
but nowhere near as much as in management consulting. While the travel will be less, the work in private equity is very stressful and demanding, so the hours you actually spend working may be more stressful or mentally demanding.
How do I become a PE operating partner? ›
Operating partners specifically — At larger PE firms, these are usually seasoned executives who have a track record of turning around large public companies. At smaller middle-market PE firms and VCs, entrepreneurs who have started companies and had a successful exist are common.
How much does an MD at KKR make? ›
$572K (Median Total Pay)
The average Managing Director base salary at KKR is $297K per year. The average additional pay is $275K per year, which could include cash bonus, stock, commission, profit sharing or tips.
What is the salary of VP operations in private equity? ›
Private Equity Vice President Salary in California. $113,500 is the 25th percentile. Salaries below this are outliers. $187,500 is the 75th percentile.
How many hours do you work in private equity? ›
Private Equity Associate Lifestyle and Hours
At many smaller funds and middle-market funds, you can expect to work 60-70 hours per week, mostly on weekdays, with occasional weekend work when deals heat up.
Operating partners can pursue various career paths. They can become owners/operators, directors, or vice presidents. They can work in food and beverage, operations, finance, or management. They may also become program directors, area directors, construction managers, or regional operation managers.
How do PE partners make money? ›
Private equity owners make money by buying companies they think have value and can be improved. They improve the company or break it up and sell its parts, which can generate even more profits.
What is an operating model in private equity? ›
An operating model provides a framework to describe how the target business is run today and how it will change in the future. It is a snapshot of key organizational capabilities and how those capabilities are (or can be) organized to achieve strategic objectives.
Is working in private equity a good job? ›
A role in private equity is a very competitive yet rewarding career path. Getting started in a profession in private equity (PE) requires strong analytical and networking skills to jumpstart a career at a PE firm.
How much does KKR pay private equity operations? ›
$218K (Median Total Pay)
The average Private Equity Associate base salary at KKR is $146K per year.
Is KKR a good company to work for? ›
KKR has an employee rating of 3.8 out of 5 stars, based on 294 company reviews on Glassdoor which indicates that most employees have a good working experience there. The KKR employee rating is in line with the average (within 1 standard deviation) for employers within the Financial Services industry (3.7 stars).
