MM&K 2025 European Private Equity and Venture Capital Compensation Report

MM&K has published its 2025 European Private Equity and Venture Capital Compensation Report. Now in its 30th year, the study remains one of the most comprehensive sources of compensation and workforce data across the European private capital industry.

The 2025 Report draws on extensive participation from private equity and venture capital firms across Europe, providing detailed insights into remuneration structures, incentive design, carried interest, GP commitment practices and forward-looking workforce trends. As in previous years, the findings highlight both areas of stability and signs of evolution as firms respond to changing market conditions, governance expectations and talent dynamics.

Base salary trends

Base salary movements in 2025 reflect a measured and disciplined approach to fixed pay across the industry. For investment professionals, base salary increases ranged from 0% to 7%, with outcomes typically linked to seniority, performance and fund activity levels. Non-investment professionals experienced slightly more modest increases, with base salary growth generally falling between 0% and 6%. Overall, these findings suggest that firms continue to prioritise variable compensation and long-term incentives as the primary levers for reward, while maintaining tight control over fixed cost growth in a more selective hiring environment.

 Annual bonus discretion versus structure

The 2025 data indicates that entirely discretionary annual bonus arrangements remain relatively uncommon across the market. Only 7% of participating firms reported operating fully discretionary bonus plans for both investment and non-investment professionals. This represents a further decline compared to last year, when the equivalent figures stood at 8% and 9% respectively.

This continued downward trend suggests a gradual shift away from fully discretionary outcomes towards greater structure, transparency and consistency in bonus determination, particularly in an environment where retention, alignment and governance are under increased scrutiny.

Discretionary bonus arrangements remain most prevalent among Small and Mid-Market LBO and Growth Equity firms. In 2025, 25% of Small Market LBO firms reported operating entirely discretionary bonus plans, although this figure has also declined year on year.

GP commitment remains market standard

Consistent with prior years, GP commitment continues to be a core feature of fund alignment. It is now well-established practice for PE fund management firms and Partners to commit capital alongside third-party investors. The 2025 Report confirms that the typical GP commitment remains at approximately 1.5% of fund size.

This level continues to represent a pragmatic balance between meaningful alignment and affordability, particularly in the context of larger fund sizes and increasingly diversified partnership groups.

Looking ahead: staffing intentions for 2026

The Report also provides a forward-looking perspective on hiring intentions. Approximately 35% of firms indicated plans to increase the number of investment professionals in 2026. In parallel, around 25% of firms expect to expand their support and non-investment functions.

Together, these findings point to cautious but sustained growth across the sector, with firms investing not only in deal-making capability but also in the infrastructure required to support more complex, scaled and regulated operating environments.

Download a preview of the European report here

As the private equity and venture capital industry continues to evolve, the 2025 European Compensation Report highlights both stability in core practices and gradual shifts in incentive design, alignment mechanisms and workforce planning. MM&K remains committed to providing robust, data-driven insights  and advice to support firms with benchmarking, informed decision-making and long-term talent and compensation strategies.

The 2025 European Compensation Report is available to participants only. To find out how you could become a participant, or for information and independent advice, please contact Margarita Skripina

If you are interested in the N. American picture instead, please click here for a preview of the 2025 N. American Compensation Report.

Download a preview of the North American report here

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