[UK] Private equity salaries up 52 per cent as talent war intensifies

Private equity firms are prepared to pay an average salary of more than £152,000 to junior staff with less than two years experience, a jump of 52 per cent in just two years, City A.M. reports.

In 2019, the average pay for private equity professionals across Europe with only two years in the industry was just under £100,000 in salary and bonus, according to data from headhunters firm Heidrick & Struggles.

For those with two to four years of experience, a salary of around £181,000 has become the sector’s average, a 42 per cent increase over the past two years.

For the most senior finance professionals, Heidrick & Struggles found that private equity firms pay, on average, more than £512,000, an increase of 21 per cent.

However, senior buyout professionals often make even more through carried interest or a stake in the firm’s profits.

Nearly 70 per cent of all UK private equity firms had put salaries up over the 2019-2020 period, a further 34 per cent also said they did so last year, the headhunter reportedly found.

War on talent

The significant leap highlights the intensifying war on talent in the financial services space as banks, private equity firms and hedge funds all vie for the best and brightest.

In the banking space, Goldman Sachs now offers its first-year analysts salaries of around £70,000 and a range of boutique firms also pay salaries in a similar range. Bonuses are now around 100 per cent of the annual salary.

Banks have no choice but to offer higher pay because heavy workloads have recently contributed to mass burnout among junior bankers, prompting many to quit their jobs.

Up to 70 per cent of analysts and associate teams left their role at banks and financial institutions in recent months, despite firms ramping up efforts to retain young talent.

Firms have offered wage top-ups of up to 20 per cent and one-off bonuses of almost £40,000. But, this appears to be having little impact on junior staffers’ decision to leave.

“Banks are haemorrhaging junior bankers,” a specialist recruiter, who works with banks on analyst and VP hires told City A.M. “People are quitting for better banks, they’re quitting the City or they’re jumping into private equity.”

‘Complete failure’

Turnover rates are currently around 30 percentage points higher at some firms. The exodus is likely being driven by longer hours since the onset of the pandemic and intense recruitment tactics from rivals, experts said.

“It’s a complete failure by HR not to see this coming,” one associate at a European bank said. “There’s no urgency to replace people.”

Junior bankers’ working hours are under particular scrutiny at present after a group of 13 Goldman Sachs employees leaked a presentation demonstrating that they had regularly been working 80-hour weeks.

The group also reportedly said they routinely clock in over 100-hour weeks during fruitful deal periods, putting strain on their mental health and leaving them on the verge of quitting.

Private equity firms are prepared to pay an average salary of more than £152,000 to junior staff with less than two years experience, a jump of 52 per cent in just two years, City A.M. reports.

In 2019, the average pay for private equity professionals across Europe with only two years in the industry was just under £100,000 in salary and bonus, according to data from headhunters firm Heidrick & Struggles.

For those with two to four years of experience, a salary of around £181,000 has become the sector’s average, a 42 per cent increase over the past two years.

For the most senior finance professionals, Heidrick & Struggles found that private equity firms pay, on average, more than £512,000, an increase of 21 per cent.

However, senior buyout professionals often make even more through carried interest or a stake in the firm’s profits.

Nearly 70 per cent of all UK private equity firms had put salaries up over the 2019-2020 period, a further 34 per cent also said they did so last year, the headhunter reportedly found.

War on talent

The significant leap highlights the intensifying war on talent in the financial services space as banks, private equity firms and hedge funds all vie for the best and brightest.

In the banking space, Goldman Sachs now offers its first-year analysts salaries of around £70,000 and a range of boutique firms also pay salaries in a similar range. Bonuses are now around 100 per cent of the annual salary.

Banks have no choice but to offer higher pay because heavy workloads have recently contributed to mass burnout among junior bankers, prompting many to quit their jobs.

Up to 70 per cent of analysts and associate teams left their role at banks and financial institutions in recent months, despite firms ramping up efforts to retain young talent.

Firms have offered wage top-ups of up to 20 per cent and one-off bonuses of almost £40,000. But, this appears to be having little impact on junior staffers’ decision to leave.

“Banks are haemorrhaging junior bankers,” a specialist recruiter, who works with banks on analyst and VP hires told City A.M. “People are quitting for better banks, they’re quitting the City or they’re jumping into private equity.”

‘Complete failure’

Turnover rates are currently around 30 percentage points higher at some firms. The exodus is likely being driven by longer hours since the onset of the pandemic and intense recruitment tactics from rivals, experts said.

“It’s a complete failure by HR not to see this coming,” one associate at a European bank said. “There’s no urgency to replace people.”

Junior bankers’ working hours are under particular scrutiny at present after a group of 13 Goldman Sachs employees leaked a presentation demonstrating that they had regularly been working 80-hour weeks.

The group also reportedly said they routinely clock in over 100-hour weeks during fruitful deal periods, putting strain on their mental health and leaving them on the verge of quitting.