Private equity compensation

Outlook for new hires in private equity

5% of 2023 employees in the global private equity database were new hires, who commenced their roles on Sept. 1, 2022, or later.

The positions with the largest number of new hires are:

• Investment analyst
• Trainee fund accountant
• Junior financial accountant

Hiring efforts across the industry have focused on bringing in new entry-level talent in key financial and investment positions.

Junior investment team roles have attracted higher salary increases than those managing portfolios.

Key roles receiving the highest salary increases

There were considerable differences in salary increases in 2023 when considering analyst, manager and director/partners levels across major markets.

Pay elements and pay mix

When it comes to pay mix, base salary is the highest proportion of total compensation among junior roles. When carried interest is included, this then becomes a large proportion of the overall pay package for mid and senior roles.

Trends that will drive 2024 rewards decisions

1. 01

   Organizations face continued challenges presented by a tight labor market and inflationary pressures.

   Companies that focus on developing a more holistic view of their employee value proposition have found themselves better equipped to address these challenges.

2. 02

   Emerging roles in private equity are those outside of the traditional investment- and portfolio-focused roles.

   They include roles focused on fund accounting, business intelligence and data science. Strategy-focused roles are also emerging, along with those working within cyber security.

3. 03

   Firms increasingly need to understand pay in relation to skills and job content.

   Prevalent skills, such as financial due diligence, accounting, portfolio valuation, corporate strategy and regulatory compliance, are key to ensuring organizations are not exposed to undue risk. Our recent research indicates that emerging skills in diversity, equity and inclusion, analytics and data, corporate governance, and IT are key to the development of private equity organizations going forward.