BD professionals have to be excellent salespeople.
Consider one of their main tasks: pitching their firm’s strategy and business acumen to business owners, investment bankers and other sources of deal flow.
The resemblance of BD roles to sales roles may have contributed to their once coming with commission-like compensation plans. A decade ago, say, BD professionals typically scored large bonuses after deals closed. They didn’t do nearly as well during deal droughts.
But the industry is trending away from those kind of compensation plans, as firms acknowledge the growing importance and complexity of the deal sourcing role.
Today, many origination professionals at the mid and senior levels enjoy ample salaries and allocations of carried interest. And they continue to get bonuses, but the bonuses are often discretionary and based on performance. They’re no longer tied to individual transactions.
In other words, they’re compensated just like other deal professionals at their firms. “It’s almost par at this point,” said Erin Carroll, a partner with executive recruitment firm Braddock Matthews.
So what can you expect to earn as a mid-level or senior-level BD professional? For that we turn to the first-edition Guide to Private Equity Compensation, published this past summer by PrivateEquityCareer.com. As with all roles in private equity, a firm’s assets under management has more to say about compensation level than any other factor. The salary and bonus figures below should be treated as medians. They assume pay parity among BD professionals and their deal professional peers.
- BD professionals working at that partner/managing director level at US buyout or growth equity shops with less than $500 million in AUM might earn $261,000 in salary and $380,000 in salary and bonus; those at the principal/director level might earn $225,000 in salary and $316,000 in salary and bonus.
- Those at partner/managing director level at US buyout or growth equity shops with $500 million to $1 billion in AUM might earn $300,000 in salary and $700,000 in salary and bonus; those at the principal/director level might earn $217,000 in salary and $333,000 in salary and bonus.
- Those at partner/managing director level at US buyout or growth equity shops with $1 billion to $2.5 billion in AUM might earn $363,000 in salary and $750,000 in salary and bonus; those at the principal/director level might earn $253,000 in salary and $491,000 in salary and bonus.