The 2023 HOLT-MM&K North American PE and VC Compensation Report has just been published and is now available for purchase
October 17, 2023
Over 100 fund managers participated in the 2023 Holt-MM&K Private Equity and Venture Capital Compensation Survey for North America, providing data on over 3,500 incumbents. The 2023 Report covers 53 different investment and non-investment roles.
In the North American Report participating firms are classified by type of investment strategy and committed capital to all active funds. Altogether, this has created 16 sample groups:
- LBO/VC/Growth Capital – split into Large, Small / Mid-size and All Firms
- LBO / Growth Equity – split into Large, Small / Mid-size and All Firms
- Venture Capital – split into Large, Small / Mid-size and All Firms
- Institutional – split into Large, Small / Mid-size and All Firms
- Mezzanine/Debt/Infrastructure – All Firms
- Fund of Funds/Real Estate – All Firms
- Secondary/Co-Investment – All Firms
- All Firms (includes all investment types as described above).
Our report is split into two parts:
The first part (Sections 2 to 4) reports on firm-wide compensation practices, such as: fee structure, payroll costs, annual bonus plan, carried interest plan, co-Investment plans, GP commitment, employee benefits and other.
The second part (Section 5) includes our findings on the compensation packages on a job-by-job basis.
According to this year’s findings, a private equity firm spends on average 60% of its GP fees (revenue) on payroll. The median management fee is 1.3% of the most recent fund across all firms.
The large buyout firms tend to pay the highest remuneration; for example the average Total Cash (Base plus Bonus) for Senior Partner (second top investment professional level) is reported as $1,688,900 this year. Typically, large buyout firms tend to favour the variable part of pay package, while venture capital firms tend to focus on fixed pay.
The main focus this year was towards variable pay increases rather than the fixed portion of pay. Considering the level of increases, this most likely indicates an exceptionally good year rather than lack of certainty from the investment firms.
This year’s median Total Cash (Base plus Bonus) increase for partners was a record 30% – the highest in the last 10 years. The Total Cash increase for more junior investment roles was 25%.
Looking ahead, 46% of firms plan to increase bonuses for 2023 for investment professionals and 56% plan increased bonuses for administrative roles.
In terms of the staffing levels, the average private equity firm would have 8 investment partners and 3 non-investment partners. 22% of firms expect to increase the number of their senior and junior investment professionals and over 40% of firms expect to expand their support functions.
The North American survey report is available to be purchased by non-participants at a price of £3,800 (plus VAT). To obtain your copy of the North American Private Equity and Venture Capital Compensation Report, or to view the survey scope before deciding to purchase, please contact Margarita Skripina.
To view a Preview of the 2023 report, this is now available to download here.