2022 North American Private Equity Investment Professional Compensation Survey

Welcome to our 2022 North American Private Equity Investment Professional Compensation Survey. Together with our survey of private equity operating professionals (published earlier this year), this report provides a comprehensive picture of the compensation that North American private equity executives are currently receiving.

For this report, Heidrick & Struggles compiled compensation data from a survey of 939 investment professionals in North America.

We hope you enjoy reading the survey, which remains the only one of its kind. As always, suggestions are welcome, so please feel free to contact us—or your Heidrick & Struggles representative—with questions and comments.

Executive Summary

This year’s survey includes a review of trends in private equity markets, hiring, and compensation after half a year of intense market volatility. The past 12 months have continued to be extremely active: In the first half of 2022, US PE firms completed approximately 4,000 deals, with a cumulative value of just over $400 billion.¹

As of the end of Q2 2022, US PE firms have raised $176 billion across 191 funds in what is possibly the most crowded fundraising market in history.² This is only slightly off the $179.6 billion raised at this time last year.³

Investment professional hiring trends

• 2022 is shaping up to be materially busier than last year, which, in and of itself, was a record year.
• The market has been particularly active at the more junior levels, where firms have needed more people to execute, and the time to hire has shrunk markedly, from months to weeks.
• At more senior levels, hiring is also active, mostly to drive expansion into new sectors or strategies.
• Candidates who are diverse have been particularly sought after at all levels.

Compensation trends

• Given the competition for junior investment professionals, cash compensation for them has risen notably. For example, at firms with $4 billion to $5.99 billion in AUM (the largest for which we have comparative data across all titles), median base cash compensation for associates rose 26% between 2020 and 2022 and only 15% for managing partners. This is a fairly consistent pattern across all funds.
• Candidates who are diverse are seeing increases in cash compensation ranging from 50% to 200%.
• Many of the high points in the compensation section across different funds include one-time cash payments for the year of 2021 bonuses. These numbers are not likely to be repeated in 2022 and are considered outliers.

Looking ahead

• We expect some slowing in hiring in the near term, particularly given how much hiring firms have already done over the past few years but also as a result of larger macro issues and the increased cost of leverage.
• We also expect hiring to rebound at least to pre-COVID levels in the medium to long term. 
• Given the spikes in cash compensation at junior levels this year, we expect to see the balance moving back toward senior professionals in the medium term.
• Overall, we may well see flat compensation in the medium term after this year’s notable rises—firms will need to be clear about expectations to avoid dissatisfaction, even if the ability to move to another firm for notably higher compensation is cooling.

For full compensation data, download the full report.

About the Authors

Jonathan Goldstein (jgoldstein@heidrick.com) is the regional managing partner of Heidrick & Struggles’ Private Equity Practice for the Americas; he is based in the New York office.

John Rubinetti (jrubinetti@heidrick.com) is a partner in the New York office and a member of the Private Equity Practice.

Acknowledgments

The authors wish to thank Mohd Arsalan for his contributions to this report.

References

¹  US PE Breakdown Q2 2022, Pitchbook, July 2022, p. 6, pitchbook.com.

²   US PE Breakdown Q2 2022, Pitchbook, July 2022, p. 27, pitchbook.com.

³  US PE Breakdown Q2 2022, Pitchbook, July 2022, p. 24, pitchbook.com.