2011

Dow Jones Private Equity Analyst-

Global Reach. Glocap Compensation Study
Relentless Focus. LANDON M. SPITALNIK
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Dow Jones Private Equity Analyst-Glocap Compensation Study

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2 | Dow Jones Private Equity Analyst-Glocap Compensation Study

Table of Contents
Publisher’s Note 3

Executive Summary 4

I. Firm-Wide Compensation
Firm-Wide Compensation Survey Methodology 7
Firm-Wide Survey Participants 8
The Slow Road Back: Private Equity Hiring And Compensation Stabilize 9
Appendix Of Exhibits 16

II. Compensation Overview

Methodology 19
How To Read The Compensation Charts In This Report 23
2010/11 Compensation Overview By Asset Class And Assets Under Management 24

Analysts.................................................................................................. 25
Associates.............................................................................................. 31
Senior Associates.................................................................................. 37
Vice Presidents...................................................................................... 43
Principals............................................................................................... 49
Partners.................................................................................................. 55
CFOs...................................................................................................... 61
Controllers............................................................................................. 69
Accountants........................................................................................... 75
Fund Marketing/Investor Relations....................................................... 79
Administrative/Executive Assistants...................................................... 81

III. Sponsored Article

Estate Planning For Private Equity Fund Managers 84
By Ivan Taback and Jay D. Waxenberg, Partners at Proskauer Rose LLP
 Dow Jones Private Equity Analyst-Glocap Compensation Study | 3

Publisher’s Note
This year’s compensation study marks an exciting new chapter in the analysis of private equity
compensation and hiring trends.
Executive search firm Glocap Search LLC and news and information provider Dow Jones & Co. have, for
the past 10 years, published separate private equity compensation reports. Each of our reports relied upon
our respective strengths in the marketplace: Dow Jones provided compensation trends and analysis based
upon its surveying reach into the private equity, venture capital and fund-of-funds communities; Glocap
offered its own detailed look at compensation and hiring trends that included a forward-looking view of
compensation on the strength of the thousands of actual placements the firm has worked on.
While both the Dow Jones and Glocap reports have been very successful, we both believed that we could
provide a better view into compensation trends by marrying Dow Jones’ and Glocap’s respective
methodologies for gathering, viewing and analyzing data. By combining our two approaches, we believe
we have produced the most comprehensive, accurate and timely look at private equity compensation the
marketplace has seen.
The new, combined report is separated into two distinct sections. The first section on Firm-Wide
Compensation Practices has analysis and insight on compensation and hiring based on feedback to a
comprehensive survey sent to private equity, venture capital and fund-of-funds managers. To ensure that
the survey focused on the most relevant and pressing topics, we convened a panel of industry executives
to help us design questions that were timely and pertinent. This survey did not ask for detailed
compensation data, but focused more on qualitative issues confronting the industry, as well as firm-wide
practices. The analysis from this survey begins on page 7.
The second section, the Compensation Overview, provides detailed compensation data on professionals at
private equity, venture capital and funds of funds. The data in this section was provided exclusively by
Glocap and is not based on survey data. Rather, it is based on multiple sources, including actual
placement data from searches executed by Glocap, candidate data maintained in the course of searches,
input from Glocap recruiters and interviews and discussions with fund professionals. All told, it amounts to
thousands of data points that have been analyzed.
We believe this approach offers two significant advantages to deriving compensation data solely through
surveying: First, self-reported compensation information has an inherent selection bias and risks being
skewed by the volume and detail of data a firm is willing to provide. Second, and perhaps more important
in today’s environment, surveys rely on information from the prior year’s compensation information,
which means that survey data related to specific positions is already a year old. Position-by-position
compensation analysis begins on page 19 of the report.
The timing for this new strategy could not be better, as private equity and venture capital groups continue
to face challenging times – both in terms of fund-raising and deal flow – and while questions of salary,
bonus and access to carried interest points weigh heavily on the minds of senior fund executives and
human resources professionals, as well as the candidates they seek to attract.
We are hopeful that by combining the best aspects of our past reports and the respective strengths of
Glocap and Dow Jones, we are providing you with an indispensable tool to benchmark compensation
and assist you in developing your organization.

Robert Dunn
Director, Product Management
Dow Jones Private Markets

Brian Korb
Senior Partner
Glocap Search LLC
4 | Dow Jones Private Equity Analyst-Glocap Compensation Study

Executive Summary
Compensation at private equity and venture capital firms
seems to be taking a cue from the broader economy.
On the one hand, cautious optimism that deal flow is
picking up is leading firms to increase hiring for more junior
positions and to provide small upticks in salary and bonus
for select groups of dealmakers that firms view as essential.
On the other, the fresh memory of the boom and bust that
private equity went through over the last five years is
keeping compensation for the majority of professionals in
check, with still less certainty of increases in the near-term.
This uneasy balance follows 2009, a year that saw some of
the first declines in compensation the private equity industry
has ever seen, and that also saw the majority of firms go
through a talent rationalization process in which some funds
got leaner and overall compensation was reined in.
General Observations
While this year’s modest increases are in stark contrast to last
year’s compensation declines – averaging 3% to 6% across
most titles and as much as 10% declines for some positions –
compensation in private equity is still down from the peak it
hit in 2008, with most professionals seeing compensation
remain steady, and certain fund types and titles receiving
modest increases (see Compensation Overview For Private
Equity And Venture Capital Funds table).
paying up to recruit these professionals in 2008, there’s
now less of a gulf between compensation for junior
professionals at mega-funds and their counterparts at
large and mid-market firms.
– Compensation for senior associates (generally recruited
following business school) has held reasonably steady
this year and is as close to the peak compensation levels
seen in 2008 as any title.
– There’s been a noticeable increase in recruiting at
venture firms that target a specific industry, although
compensation has held steady at last year’s levels.
Market Impact
Compensation in any industry tends to move in lockstep
with the overall health of the industry, and in the case of
private equity the relationship is particularly pronounced,
due to its dependence on fund management fees and
carried interest distributions from exited deals to support
staff compensation.
Private equity groups are battling through a moribund period
for fund-raising (see U.S. Fund-Raising table), as LPs question
committing more capital to firms that haven’t managed to
invest prior commitments. An inability to raise new funds
makes bringing new partners on board more difficult and
also limits management fee income for the firm.

Other trends seen this year in compensation and recruiting
include:
– On the hiring front, uncertainty still reigns and firms are
focusing their attention on recruiting more junior
personnel across the board. While mega-funds were
While general partners have been doing their best to put
money to work, the $900 billion raised in the years between
2006 and 2009 is making for a tough slog. And the clock is
ticking, as most funds require that the general partner invest
their capital in the first five years of a fund’s life – adding still
more uncertainty.

Compensation Overview For Private Equity And Venture Capital Funds (By Position)
Private Equity Funds ($)
2009 2010/11 Change
Title Avg. Base Avg. Bonus Avg. Total Avg. Base Avg. Bonus Avg. Total from ‘09
Associate 98k 103k 201k 99k 104k 203k 1%
Senior Associate 151k 160k 311k 151k 162k 313k 1%
Vice President 188k 236k 424k 188k 242k 430k 1%
Principal 232k 330k 562k 232k 335k 567k 1%
Partner 500k 975k 1475k 490k 1005k 1495k 1%

Venture Capital Funds ($)

2009 2010/11 Change
Title Avg. Base Avg. Bonus Avg. Total Avg. Base Avg. Bonus Avg. Total from ‘09
Associate 107k 56k 163k 107k 55k 162k -1%
Senior Associate 135k 72k 207k 135k 68k 203k -2%
Vice President 179k 112k 291k 181k 110k 291k 0%
Principal 193k 117k 310k 195k 115k 310k 0%
Partner 442k 320k 762k 445k 310k 755k -1%
Source: Glocap
 Dow Jones Private Equity Analyst-Glocap Compensation Study | 5

US Fund-Raising, 2005-1H 2010

Based on Multiple Closings, Amount Raised ($M)
2005 2006 2007 2008 2009 1H 2010
Buyouts/Corporate Finance $123,580.73 $196,536.05 $257,554.30 $202,464.89 $55,176.93 $21,460.71
Venture Capital $28,615.72 $30,965.57 $39,810.07 $29,104.39 $13,528.42 $8,127.09
Mezzanine $6,555.98 $20,986.40 $8,339.60 $42,355.98 $3,363.32 $4,403.76
Secondary & Other $6,338.00 $8,503.70 $7,925.00 $6,487.60 $13,243.50 $8,466.46
Funds Of Funds $19,753.49 $25,226.00 $35,679.25 $26,161.62 $9,867.14 $3,764.00
Grand Total $184,843.93 $282,217.72 $349,308.22 $306,574.48 $95,179.31 $46,222.02
Source: Dow Jones & Co.

Buyout firms have been trying to invest capital, albeit at a
slow pace. Thus far, they’ve managed to complete deals with
total transaction values of roughly $221 billion over the last
two-and-a-half years (see U.S. Private Equity Financing
table), and even with the larger equity checks LBO groups
are writing, at the current pace it will still take at least four
years to work through the funds raised through 2006 to 2009.
The danger here is that the slow investment pace coupled
with limited returns keep fund-raising from rebounding and
limits fee income and carry distributions, and could
ultimately call into question the future of some firms.
Capital overhang is less an issue for venture capital groups,
as venture fund sizes tend to be smaller and venture
investment has suffered less of a slowdown than the private
equity market has since 2008 (see U.S. Venture Capital
Financing table).
The bigger issue with venture firms is still the fallout from the
dot-com bubble, and the broad contraction of the industry
still taking place. While having fewer venture firms does not
likely have an immediate impact on compensation, it does
limit the number of available spots within the industry, as well
as competition among firms to recruit and retain personnel.
Private Equity
Large buyout/growth-equity firms have been the most
active in hiring this year and overall have increased
compensation the most this year. However, these increases
are only against the reductions witnessed in 2009, so even
professionals at large buyout/growth-equity groups still have
not made it back to the peak levels of compensation they
received in 2008.
Case in point, bonuses for principals at private equity firms
increased 2% this year on average, but this came on the heels
of an average decrease of 5% in total compensation for this
group last year.
There’s also been more hiring taking place at the junior
levels at buyout/growth-equity firms, although this has not
necessarily been reflected in an increase in compensation.
It seems that larger private equity firms view hiring of junior
executives as a hedge against the current market uncertainty.
Firms can bring junior staff on board more easily than senior
personnel to deal with the grunt work of deal-making, and
these hires are more easily shed should deal flow not pick up.

US Private Equity Financing, 2005-1H 2010 US Venture Capital Financing,

2005- 1H 2010
$500,000M $11,124 1,200
1,107 $40,000M 2,888 3,000
965 2,796
400,000 1,000
839 2,623
$31,790 2,538
$30,700
800 2,411 $29,292
30,000 2,500
300,000 642 $6,525
$461,157 $24,035
600 $22,119
200,000 402 20,000 2,000
400
$3,535 $280,749 $22,117 314
245
323 $11,843
100,000 $120,170 133 200
$12,988 10,000 1,500
161 181 $107,734 $10,214
0 110 $47,970 $20,093 0
1,311
2005 2006 2007 2008 2009 1H 2010 0 1,000
Buyout Financings ($M) Buyout Transactions 2005 2006 2007 2008 2009 1H ‘10

Expansion Financings ($M) Expansion Transactions
U.S. PE buyout financing refers to majority stake investments into privately-held companies
or into companies that become private as a result of the transaction. U.S. PE expansion
financings refers to minority stake investments, such as growth and recapitalization
transactions, into privately-held companies. Source: Dow Jones & Co.
Total Amount Invested ($M) Total Number of Financings
Venture capital includes all investments made by venture capitalists or venture capital-type
investors, i.e., those making equity investments in early-stage companies from a fund with
multiple limited partners. Source: Dow Jones & Co.
6 | Dow Jones Private Equity Analyst-Glocap Compensation Study

Compensation and recruitment at mid-market and smaller

firms is more challenged. The austerity measures adopted
Carry: Who Gets It?
Percent that get carry, 2010/11
by mid-market firms last year are still in place, and the
difficult fund-raising market is likely to have a bigger impact 100% 100% 98%
on these less diversified groups. While it’s doubtful that 100% 95%
small and mid-market private equity firms will see the sort 80 60%-75%
of firm shakeout the venture industry is working through,
there’s a higher percentage of mid-market firms suffering 60
through franchise uncertainty. This, in turn is forcing some 40
groups to keep hiring and compensation in check. 25-30%
20 15%
0 5%
Venture Capital

VP
r

al

e*

t*

FO

r
oc
e

le
ys
While the venture industry continues to contract, this

p
rtn

at

l
ci

ss

tro
C
al
ci
Pa

in

.A

An
so

on
contraction has yet to have a significant impact on

Pr

Sr

As

compensation (although firms that go out of business or
cease to recruit new staff are removed from the sample, so
the impact of the contraction is likely to be seen in overall
recruiting rather than average compensation).
C
*Includes co-investment opportunities. Data are estimates based on offers and acceptances
tracked by Glocap Search as well as recruiter knowledge of compensation trends.
Source: Glocap

Still, even in the midst of this contraction, executives with
specific skill sets are becoming more important at venture
firms, and recruiting has increased in these areas.
Specifically, senior and mid-level professionals with
experience in alternative energy, consumer Internet, cloud
computing and other hot areas for investment have been
getting more attention from venture firms.
Funds Of Funds
After a down year last year, compensation at fund-of-funds
managers has largely held steady with last year’s levels.
Going forward, the fund-of-funds space is likely to
bifurcate, with a few large managers continuing to grow
into more diversified institutions, and adopting an
organizational and compensation structure more akin to
large private equity groups.
This evolution in carry participation for non-partner
executives speaks to an effort by firms to incentivize the next
generation of partners to remain at the firm while
compensation has suffered (and carried interest is worth
little in a marketplace with relatively few exits taking place).
However, the broadening distribution in carry is somewhat
offset by firms indicating that the duration of the partner
track has extended.
A similar rationale appears to be in play with increased carry
participation this year for certain non-deal making positions,
including operating partners and chief financial and chief
operating officer roles. In these cases firms seem to recognize
the value that operational expertise and effective financial
management can bring in challenging times.

Geography
As in past years, compensation varies little based upon
where a firm is located in the U.S. In general, the talent
pool for private equity is small enough that firms need to
compensate based on the position they are recruiting for
with no consideration for relative cost of living.

Internationally, employees at global firms seeking to enter a

new marketplace – especially hot ones, such as China and
the Middle East – can expect to receive a higher base salaries
and bonuses than their domestic peers in these regions.

Carried Interest
One area of compensation that has seen significant
movement over the past several years, including this year,
is carried interest participation. Carry continues to move
downstream at firms to non-partner personnel and,
increasingly, non-deal making professionals.

While senior associates traditionally have received carry as

part of their compensation, associates and even in some
cases analysts are also being granted a small share of
carried interest on most recent funds (see Carry: Who Gets
It? table)
 Dow Jones Private Equity Analyst-Glocap Compensation Study | 7

Firm-Wide Compensation
Survey Methodology
We compiled the firm-wide compensation trends and In addition to categorizing similar firms together, we also
outlooks through surveying U.S.-based private equity firms, analyzed responses by grouping together firms based on
venture capital firms, fund-of-funds managers and total fund size. Using the fee-earning assets under
secondary firms. management at the end of 2009, firms were grouped into
the following fund sizes:
Our survey consisted of roughly 130 questions covering ten
sections: overall firm information; personnel information;
firm-wide fee, salary and bonus trends; carried interest Private Equity Firms
information; questions relating to co-investments, general – 23 small firms ($0-$300 million AUM)
partner contributions and other benefits; and structure and
compensation for investment professional, finance/ – 15 mid–size firms ($301 million-$1 billion AUM)
accounting/operations teams, marketing/investor relations – 17 large firms (+$1 billion AUM)
teams, operating partner/senior adviser/executive in
residence network and other teams (including compliance,
IT and human resources). Venture Capital Firms
– 30 small firms ($0-$300 million AUM)
The questions were vetted by a panel of finance and human
resources professionals working at private equity and – 37 large firms (+$300 million AUM)
venture capital firms prior to the survey being sent to
ensure that all questions were clear, relevant and pertinent Note that not all private equity and venture capital firms
to today’s marketplace. provided a value for their year-end 2009 assets under
management. These firms were excluded from the fund-size
Survey responses were gathered, reviewed and analyzed by data analysis.
Dow Jones Research, and all information contained in this
section is purely the result of our in-house research process. Fund-size breakdowns are not provided for fund-of-funds
managers and secondary firms due to the relatively small
This year’s study included responses from the breakout of sample size of these two groups.
firm types in the following section. In cases where firms
pursued a variety of strategies, firm-type designation was
assigned based on the firm’s primary investment focus and/
or strategy.

Firm-Type Breakdown
– 64 institutional and independent private equity firms,
including:
• 37 buyout firms
• 20 firms focused on growth-type investments
• Four mezzanine firms
• Three restructuring/distressed-debt firms.
– 81 institutional and independent venture capital firms,
consisting of 18 health care-focused VCs, 21 VCs with a
main focus on information technology, 40 VC generalists
(investing in several industries) and two corporate
venture capital firm.
– 12 fund-of-funds managers and five secondary firms
participated in the survey. They are classified together in a
separate category to distinguish from PE/VC firms their
compensation structure and different type of investments.

Please note that these sample sizes may not always match
the data in this report because some respondents did not
answer every question.
Associates Dow Jones Private Equity Analyst-Glocap Compensation Study | 36

Funds Of Funds
Associates At Small Associates At Mid-Sized Associates At Large Associates At Large FoFs/
Funds Of Funds Funds Of Funds Funds Of Funds Hybrid-Co-Inv. Funds
($0-$300 Million in Assets) ($300-$750 Million in Assets) ($750 Million-$2 Billion in Assets) ($2 Billion+ in Assets)

$180k $180k $180k $180k

163k 166k 162k 165k

142k 145k 141k 141k

135 135 127k 129k 126k 126k 135 135
67k 69k 66k 67k
112k 113k 110k 110k 54k 56k 54k 54k
47k 49k 47k 46k
90 38k 39k 37k 36k 90 90 90

45 45 45 88k 89k 87k 87k 45 96k 97k 96k 98k

74k 74k 73k 74k 80k 80k 79k 80k

0 0 0 0
2007 2008 2009 2010/11 2007 2008 2009 2010/11 2007 2008 2009 2010/11 2007 2008 2009 2010/11
Avg. Base Avg. Bonus Avg. Base Avg. Bonus Avg. Base Avg. Bonus Avg. Base Avg. Bonus

Source: Glocap Source: Glocap Source: Glocap Source: Glocap

Base Salary ($) Base Salary ($) Base Salary ($) Base Salary ($)
’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg
Mean 74k 74k 73k 74k 1% Mean 80k 80k 79k 80k 1% Mean 88k 89k 87k 87k - Mean 96k 97k 96k 98k 2%
75th % 80k 81k 79k 79k 75th % 86k 88k 88k 88k 75th % 93k 94k 93k 95k 75th % 108k 109k 109k 109k
Median 72k 71k 70k 70k Median 78k 77k 75k 76k Median 87k 86k 84k 85k Median 91k 91k 91k 92k
25th % 67k 65k 64k 65k 25th % 73k 72k 70k 71k 25th % 75k 74k 74k 74k 25th % 74k 76k 78k 81k

Bonus ($) Bonus ($) Bonus ($) Bonus ($)

’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg
Mean 38k 39k 37k 36k -3% Mean 47k 49k 47k 46k -2% Mean 54k 56k 54k 54k - Mean 67k 69k 66k 67k 2%
75th % 48k 50k 46k 45k 75th % 60k 62k 57k 56k 75th % 66k 68k 65k 65k 75th % 75k 76k 74k 75k
Median 36k 37k 33k 32k Median 46k 45k 44k 44k Median 51k 52k 50k 49k Median 57k 57k 53k 54k
25th % 27k 28k 25k 23k 25th % 33k 34k 30k 30k 25th % 40k 42k 40k 40k 25th % 46k 48k 45k 45k

Total Cash Compensation ($) Total Cash Compensation ($) Total Cash Compensation ($) Total Cash Compensation ($)
’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg ’07 ’08 ’09 ‘10/11 Chg
Mean 112k 113k 110k 110k - Mean 127k 129k 126k 126k - Mean 142k 145k 141k 141k - Mean 163k 166k 162k 165k 2%
75th % 115k 119k 117k 116k 75th % 131k 135k 132k 131k 75th % 146k 150k 148k 149k 75th % 168k 171k 168k 169k
Median 106k 106k 103k 103k Median 115k 116k 114k 115k Median 137k 138k 136k 137k Median 146k 148k 146k 148k
25th % 97k 96k 92k 91k 25th % 109k 109k 103k 104k 25th % 124k 125k 124k 124k 25th % 124k 128k 127k 130k

Data in these charts do not include compensation from carried interest. See page 13 for a discussion on carry.