San Diego, CA — Jan. 21, 2009. A report released by JobSearchDigest.com today revealed that private equity and venture capital are not immune from financial market woes. Job security concerns are widespread due to difficulties in raising future rounds of capital.
With the financial markets meltdown, the report indicates that professionals in investment jobs, although paid very well, see further trouble on the horizon. Similar to what we saw in the hedge fund industry, this year’s report reveals that 47 percent are happy with their current level of compensation, that’s an 80 percent increase in satisfaction from last year. And why not? The average total compensation, industry-wide, was $255,000 USD – up 14 percent from last year’s figure of $224,000.
“As we saw the markets falling apart, we decided to wait a couple months to conduct this year’s survey in order to get the reaction from the industry insiders. By November, players in VC and private equity careers were feeling pretty good about their compensation but worried about their job security,” says David Kochanek, publisher, www.JobSearchDigest.com, which produces Private Equity Jobs Digest, a research service focused on private equity and VC jobs.
Unlike last year, job security is a widespread issue. In fact, 43 percent of professionals stated they are somewhat concerned about their employment situation and 16 percent said they are very concerned. The majority of these respondents said they were concerned about their firm’s ability to raise the next fund. “With portfolio companies facing tough times ahead, in addition to an anemic IPO market, it becomes harder to present investors with a plan that lays out a clear path to a successful exit.”
Those who are not concerned about their current employment situation were pretty clear on the reasons why; either they were at the top of the firm’s totem pole, their firms had just completed raising a fund or their firm specializes in distressed investments – which, in this financial environment, presents more opportunity than concern.
It turns out that size does matter and that bigger is better, funds in the mid range raise the bar when it comes to compensation. When the fund performs well, employees are sharing in the upside with the average compensation increasing to over $260,000 and the lowest average going to those in the poorest performing funds.
Working hard does pay off. The average work week for professionals in private equity investment jobs is 50 to 70 hours. An interesting finding in looking at work and personal life balance is that there is a direct correlation between hours worked and total compensation earned. Those putting in 70 hours per week earn over $375,000 and that number climbs over $400,000 for those putting in 80 hours per week. It is worth noting that at 90 hours per week compensation levels drop. “We believe this high level of hours is a result of a firm’s culture – and it is working. Among respondents working more than 70 hours per week, a full third reported their fund was up 25 percent or more, whereas for those working less, only 13 percent reported that level of fund performance,” says Kochanek.
The 2008 Private Equity Jobs Digest Compensation Report is based on a survey conducted in Fall 2008. Compensation data was collected directly from hundreds of private equity and venture capital partners and employees from firms, both large and small. Some of the participating firms include: Credit Suisse, Delta Partners Group, Intel Capital, Kaiser Permanente Ventures, Lehman Brothers, and Soft Bank Capital.
The report can be found on the private equity compensation page on JobSearchDigest.com.
About Job Search Digest
Since 2002, JobSearchDigest.com has provided web-based career services, catering to professionals in the private equity, venture capital, investment banking and hedge fund industries worldwide.
Job Search Digest
CONTACT: David Kochanek, Publisher