Posts Tagged ‘Compensation’

Response to Comment from Blog

Tuesday, June 3rd, 2008

“In my job search I’m seeing quite a few “Private Equity Investor Relations Associate/Analyst” listings. Is there a clearly defined career path for these roles? Do the infrastructure roles enjoy the same “carry” opportunities as the investment side?”

Comment posted by Gary P. in response to an earlier blog posting. 

The career path for an Investor Relations professional is not very well defined within the Private Equity space; and this role can actually lead to many different roles including Director of Marketing, Chief Operations Officer, and Managing Partner.  To reach these higher level positions typically requires that the professional must join another firm where their rolodex will be extremely valuable, although this is not always the case.

An Investors Relations professional’s greatest value is their rolodex and their ability to raise assets using their rolodex.  As a more junior Investor Relations professional one learns “how the game of raising assets” is played. 

As you learn these skills, you will have constant interaction with both present clients and potential clients, including Investment Consultants; your network and rolodex will be constantly growing.  It is extremely important at that point to learn how to manage your rolodex effectively in order for you to provide a high level of service which will enable you to take your rolodex with you to another firm.

During the interview process both you and your rolodex will be interviewed. It is very important for you to truly understand your rolodex and both its strengths and weaknesses.  For instance do not interview with Real Estate strategy fund if your relationships focus on equity investments.   Many professionals will say understanding one’s rolodex sets apart a good Investor Relations/Marketing professional from a bad one. 

A good Investor Relations/Marketing professional understands how their entire firm operates and in many cases these professionals possess the keys to the assets i.e. client relationships and this is why they can become Chief Operating Officers or Managing Partners. 

Although most junior Investor Relations professionals do not receive a defined part of the “carry” they do receive a performance driven bonus usually based on a couple of stats including assets raised, assets kept, and the fund’s overall performance.  As an Investor Relations professional becomes more senior and starts to handle more marketing and operational duties within the firm they almost always have a defined percentage of the “carry.”

In regards to Infrastructure roles as a whole, these positions typically do not receive a defined part of the “carry” until they are more senior within the firm, such as Director of Marketing, CFO, COO, or Partner.  The lower level roles do receive a performance driven bonus which comes from the funds fee pool but they rarely are offered a defined percentage of the carry. The bonus is usually calculated by a combination of qualities including fund’s performance and employee’s performance.  The bonuses paid to more junior professionals are usually paid on a yearly basis and sometimes a small bonus is paid at the completion of a capital transaction.