Private Credit / Direct Lending Comp
I'm a 2nd year associate at one of the big DL firms (Ares/Golub/Owl Rock) and bonus season is around the corner. Seeing as most people on this site are always talking about PE/IB comp, I would love to hear any data points for people in the private credit space (DL/Mezz etc). To start - I'm hearing $130k/$85k for my year (associate 2). Any input appreciated.
Also a second year associate at one of those firms/a comparable one. Roughly $125k + $125k
Giving this one attempt at a bump since there tends to be so little info on private credit comp here
Hi- what was your background before joining? Was it in lending at a bank or IB?
Has comp gone up with IB comp? Have heard large private credit/DL paying closer to 300k first year associate now
Bump - Let's take credit comp to the moon!
1st year VP - 360K total comp for CY 2020
Fund AUM - materially smaller than big guys like golub, ares, owl rock
Location - US but not in NY / CA
What are your hours like?
typical - 50-55; when deal(s) is heating up / moving towards closing - as long as it takes
$75k base + $30k bonus + $10k signing, AN1
This Prudential Private Capital?
Congrats! That’s awesome. Would you mind saying what firm and/or location? Bain?
My bro from Duke is starting at Barings soon and was wondering what comp is like compared to other firms. He thinks it’s a little low.
Congrats! That’s awesome. Would you mind sharing what firm and/or what city? Bain?
My bro from Duke will be working at Barings and has heard they underpay a little compared to other firms.
Work with someone who previously was at Barings and he mentioned that one of the reasons he left was due to low comp. Barings probably is able to get away with paying on the lower side being in Charlotte.
$3-4bn AUM 2nd year associate ~$235 all in
Thanks, good stuff. Is this direct lending or mezz?
mostly direct lending type of deals with co invest and some 2nd lien / mezz
Edited to reply
Third year associate in a tier 2 city. $110k salary and $60k bonus. Company is senior debt/unitranche only
What is the AUM? This seems a lot lower than the other numbers I've seen/people I've talked to
We are very big. It’s known we underpay and people are hoping pay comes us this year, but it’s due to us doing mainly senior deals
Don’t mean to hijack the thread, but would a move from PubFin to private credit be possible?
Nothing is impossible if you know your shit and network. That being said, i have not seen anyone come from that type of background.
I interned in PubFin and saw an analyst move to Neuberger Berman private credit from my team. I also went from PubFin SA -> private credit FT.
what is pubfin? public finance? what firms do this
Can anyone comment on the difference between the work in corporate/commercial banking and direct lending? I assume it primarily comes down to DL doing higher risk deals?
Skillset is very similar (credit is credit). From another thread that summarizes it pretty well: "The primary difference is regulatory, driven by the different sources of capital. Banks hold deposits, so risk-taking is restricted in a number of ways in order to protect depositors. Direct lenders are raising funds from investors who want the lender to put that capital at risk in exchange for returns. Regulators take a much more hands off approach; they're not nearly as concerned with a fund blowing up as they are with a bank going under.
Banks still dominate the investment grade large corporate syndicated loan space because i) they're low-risk borrowers, so capital requirements aren't as onerous, ii) banks have balance sheets large enough to support the biggest borrowers, and iii) there's a lot of cross-sell opportunities with large corporations, so it's a worthwhile use of capital for big banks. As the borrower size goes down into the middle market and lower-middle market, banks have less cross sell to pursue and higher capital requirements for riskier borrowers. Direct lenders have taken share in this space because they can be as risky as they like, so long as they provide investor returns."
With the additional risk on the DL side, usually more intensive underwriting / analysis, and thus the good ones hire more from IB/LevFin backgrounds, and comp is far better than on commercial banking side.
Corporate Banking is totally different. You are the point of contact for your client to the whole bank, much more client oriented. IMO you touch a lot of parts/products, but specialize in nothing. Comp is somewhere in between Commercial and Investment banking, but i think its a snooze.
Bumping as I think this thread could be valuable. My 2c: I interned at a bank with a sizeable direct lending team and have heard that A1 all-in is $80k (tier 2 city but tier 1 for MM private debt).
What??? An bank with direct lending team???
Delete
Rothschild Five Arrows, GS Merchant Banking... Still banks, alternative investment capabilities.
What backgrounds do top DL/Mezz/Credit funds hire from?? Assuming Lev Fin/DCM/Rx rank pretty highly, but are they open to coverage/other product groups?
all of the above is correct. Rx more helpful in distressed credit obv, levfin common for DL/Mezz, but you see alot of other groups as well.
Do you see any structured finance backgrounds make the jump?
Would FIG be possible?
Are analysts coming from Lev Fin/Rx backgrounds competitive for PE/GE, or mainly credit funds?
Is a possible entry point into any of the more respected DL/Mezz lenders through a top business school?
Yes - just like top PE funds. Plenty come through that way
As1 was 125 salary, 150 bonus at a >50 aum dl
Sounds like an Ares type shop. What were the hours like? Lighter than PE or about the same?
Hours were like Monday through Tuesday til midnight, less on w - fri, couple hours on Sunday. On two deals going hard, probably up there to 80 a week
Sixth Street?
Do you have to stay in banking for two years before going to private credit? or is it possible to do banking for only one year?
Its definitely possible - Have seen people at my firm switch after a year
Europe: No banking pre-requisite. I feel like we enjoy much more flexibility here and do not have to go through the usual IB gig to get into PE/PB (though it obviously helps)
Update, have a buddy of mine who got comp today as an As1 that got 125 / 200 (so 325 all in). MF level but damn comp is really going up
Woof. Guessing that's mezz though? Good for him
That's amazing!!! What city / size fund??
Defenitly higher yielding stuff but tier 1 city, large aum
London associate 100k base + 70k bonus
Is it first year or third year associate?
Hows comps in long term like?
Interested in comp for specialty lending group at GS - Dallas.
My experience as a mid-level at a big name firm in the Direct Lending space (Nyc):
2nd Yr Associate: $125k Base, $165k bonus
3rd Yr Associate: $145k Base, $195k bonus
Hey, is this consistent across all of the big name firms or do some have a discount, i.e. the usual suspects (KKR / Carlyle)?
1st year VP (5-6 YOE) - $300K total comp for CY 2020
AUM - $2-3bn AUM
Location - US (Not in NYC)
Is this low for experience / size of shop?
God damn I’m underpaid.
Bumping. Curious on comp at various firms like Carlyle, Bain, Ares, Churchill, KKR, etc.
Bumping
Bump - curious what comp is for funds based in NYC are looking like lately. Seems like comp has really gone up in the last year
If you’re at like a top 5 shop I think first year should be 275-325. Anything smaller than that is a guessing game
Any info on like the medium sized names varagon, Churchill, etc?
Both of those i believe have a starting all in Associate 1 comp of ~170-200k. Def less than the bigger boys in Uni world. Think thats where most of the solid second tier shops fall for starting.
bump- interested in the London scene too
Bump
Why is Golub known for having higher comp if they mainly provide senior debt / Unitranche?
Theyre known for having higher comp compared to the other senior lenders because they're one of the best. Won't be as much as GSO or other top mezz shops, but Golub plays with Ares / Owl Rock for these deals and pays in line with them.
Thanks. SBed. Who are considered the top mezz shops? Would these include the usual suspects (Ares, GSO, Bain, Carlyle, KKR, Apollo, Oaktree, etc.)? Is it fair to say that in private credit, mezz usually pays the most?
Btw - comp ended up being 130 / 125. So not bad.
Sorry - for which firm?
Golub
Was this as a first-year associate?
Yea but we got salary jumps now - 160 for first year associate.
Anyone know sixth street comp?
anyone know comp for londn firms like baillie gifford, m&g
Are private credit/DL firms open to MBA associates who have a few years of banking experience? I’ve started to become interested in the field, I’m a first year associate at a BB coverage group and if I leave banking I think I’d want to head into DL. I know PE won’t happen, is DL more open to candidates like me?
Personally - seeing a ton of WSO DM inquiries for Direct Lending interviews/case studies from ppl without the lev fin type background/skillset, from all types of groups honestly, and somewhat surprisingly. Not sure why/how they're getting the interviews, but they are getting opportunities. Also generally seeing these ppl going in blind to the intricacies of lev fin capital markets, syndicated loan market, direct lending vs. syndicated, etc. So I guess that evens the playing field.
From offers this year looks like MF DL teams are at ~$250k all in. NYC
Do you know how that compares to MF PE and other DLs? Is MF DL WLB similar to MF PE?
That would be shockingly low and not in line with what has been rumored elsewhere / prior years, i.e. pay being in line with PE.
Direct lending is known to pay less than PE. I can confirm that’s the number.
That is definitely low for NY MFs. Maybe some of them are lower but I know for a fact some pay more than that
That may be true for some but not for all. GSO actually paid more than BX's other strategies, so people took a cut when it was fully emerged into BX and became BXC last year.
$1bn+ mezz fund - $120k+$90k
Is this NYC?
Worked in DL for years. Rule of thumb: the more institutional the firm is overall, the smaller the pay (eg KKR/Ares large vs Golub/HPS/OwlRock small - ie only a small number of guys at the top).
The above is cash. Carry depends on the shop (at least VP but more usually Director level - DL carry more attractive vs PE carry as it pays quarterly) and depends on the strategy you focus on.
I want to emphasise this: cash comp has NO relationship to how risky the strategy is. Solid DL shop raising / deploying capital will keep paying well out of management fee only.
Thanks for this. Can you clarify the more institutional the firm is overall, the smaller the pay? My understanding is KKR/Ares/HPS/Owl Rock all pay similar level and will similar number of folks at the top?
For VP 6/7 yr experience, you mean post-IB experience, right? Any vesting for the 400-475 comp?
I cannot clarify without naming names, but your understanding is wrong I’m afraid. Years of experience I mean since starting in IB. No vesting for cash comp unless the firm is listed.
Thank you - very insightful. Do you have a view on what comp at GSO / BXC might look like? Understand this is probably considered the best credit platform, but heard there might be a BX discount...
No idea about those, but I’d pick cash over brand anytime.
How has comp shifted with the recent pay bump in IB? Anyone have any datapoints?
bump
What were your hours like this year? Any better than banking ?
Can someone confirm AN pay for London? Was thinking about moving there but heard that avg is 40-50k base + 40% bonus. Does anyone know if they raised the comp after the recent pay bumps in banking?
Many thanks in advance
How feasible is it to move from direct lending at places like Golub to places with more equity exposure like opportunistic credit/special sits/private equity side of the buyside world.
Relatively difficult, you would need deals on your resume that depict your ability to think as an investor farther down the capital structure (ex. sub debt deals or equity deals). It's inherently a different mindset. One is focused on capital preservation and is OK with a lower coupon and the other is risk-taking. Much more flexibility to move around if your credit fund invests across the capital structure.
AUM: 4-5B
Location: U.S. Not NY/CA
1st yr Analyst
Comp: 75k + 15k Bonus
AUM: ~$500M
Location: Northeast US
6th year analyst
Comp: $450k all-in, no vesting
Not gonna lie, your numbers sound shockingly low especially for the size of the shops you’re mentioning.
I compiled all my database responses to the LitCap database:
Hey - I submitted all these results to the LitCap survey: https://docs.google.com/spreadsheets/d/1ShxNiwyMepwNVkLYvVpXH6IkAEQ5k6G…
To the analysts an associates submitting "anon considering small team" figures: you were not helpful.
Bump
Interested if anyone knows about carry at private DL firms? Adding input for the thread below on comp.
Y1 VP
All in cash comp - ~$265K (of which 60% is bonus)
Tier 2 City
AUM btw $3.0 - $4.0M between funds
AUM: $15B+ (Senior fund)
Associate 1: $180k base + $120k Bonus
Associate 2: $200k base + $$150k bonus
Bonuses are ranges that have been communicated to the Associate group - could be higher/lower depending on performance. We are certainly busy. I don’t know what 3rd year associates or VPs make. I know VPs have carry here.
This seems quite high but great if it’s true. I heard $225-250k all in was market for associate 1. Is this a Golub, Ares, Owl level firm?
Is it high? Idk, seems like everyone is at $275k+ at this end of the market (Yes btw, Ares type shop) - so we finance a lot of LBOs and software assets, not an ABL Private Credit fund. ABL will likely be lower.
Bump- what is the typical range for AN1?
Bump for AN1
Fund: (BX / KKR / APO)
Grade: Analyst 1
City: NYC
Base: 120K
Bonus: Expected to be 80-100K (although no actual range is mentioned in offer letter but range was given verbally by HR)
Would love to get any and all insight on what FT opportunities look like... Will be a senior in fall looking to break into space... multiple internships in AM realm, however new passion for PC/DL industry. Really wanting to learn as much as I can and trying to connect to anyone in the space. Thank you!
Hi everyone - any thoughts/cases heard of the move from Portfolio valuations (mostly for credit lenders) to private debt? Strong experience valuing debt instruments across the cap structure.
Where Lincoln, HL or D&P?
Boutique but merged with a global tax advisory firm now.
I made a move from a PV team (HL/D&P) to a private credit val team. Had to keep analyst title but currently avg around 45hrs a week, all in comp should hit about $130k this year (would expect around $140k next year) and work is way less intensive. I find valuation incredibly boring but considering my WLB and pay, its pretty tough to complain.
Any insight on comp in Canada (preferably Toronto) for Analysts/Associates?
Bump on updated comp
Still in process but Asc at a $20-30B credit fund at a large asset manager in NYC. They told me a range of $225-275 worked.
Blackrock and PIMCO quoted me in the 275-300ish range for private seats at the associate level. Both on the opportunistic end of things.
50/50 btw base and bonus?
Updated thoughts for MM?
Ignore username, currently finished my first full year at the firm as an associate. Comp was ~$350K total. Work at one of the larger MF PC shops (Apollo/Ares/HPS/BX). Was quoted potentially paying 10-15% increase YOY until you're promoted which resets base/bonus, etc.
Larger platforms which have ~100s of Billions in AUM ensure relatively more stable compensation despite market conditions (i.e., IB bonuses flat to down, harder to deploy capital, etc.)., because of the sheer amount of mgmt fees generated.
How would say your WLB is ? Have several friends at shops with less aum like Apogem, Twin Brook, and Monroe and they are usually between 50-70 hrs a week depending on how many deals are being closed
What comp do your friends bring in at these shops?
What kind of comp do your friends get at these firms?
Hello! Trying to understand pay here. Are you associate 2? Thank you!!
Curious as well
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