GLOCAP SEARCH LLC, THOMSON REUTERS RELEASE 2010 PRIVATE EQUITY COMPENSATION REPORT

NEW YORK, Nov. 18 /PRNewswire/ -- Glocap Search LLC and Thomson Reuters have released the 2010 Private Equity Compensation Report, an in-depth analysis of 2009/10 compensation at U.S.-based private equity funds. Following several consecutive years in which compensation had been on an upward trajectory, growth across all segments of the market (buyout/growth equity, venture capital and private equity fund of funds) has come to a halt with total compensation now trending down, according to the report.

Much of the pullback in compensation can be attributed to a drop-off in fee income from slower deal activity and dramatically reduced fundraising. This is an about-face from the past few years when record-setting fundraising and a steady flow of larger deals drove compensation to new heights. There were no major categories in which compensation increased.

Brian Korb, Senior Partner at Glocap and head of its private equity practice, noted that in addition to the reduced fee income, investment professionals' own expectations for compensation have been tempered due to the layoffs that shook Wall Street. He added that pressure to raise compensation was reduced further by the diminished threats from hedge funds and competing private equity funds, which in previous years had lured away top talent with lucrative offers. "This is the first time compensation has fallen across the board in the more than 10 years that we have been tracking it. Nevertheless, this environment provides a healthy wake-up call that private equity is not an easy money business," Korb said.

The report continues to show that compensation increases significantly as the amount of capital under management rises. Traditional later-stage private equity/buyout funds still pay the highest compensation levels followed by venture capital firms which, in most cases, pay more than fund of funds. Among the highlights of the report are:

• Base salaries across most categories were relatively unchanged from last year's levels, with most of the declines in total compensation reflected in reduced bonuses.
  

• Total average compensation for Senior Associates at buyout/growth equity funds held relatively steady with only 3% decreases.
  

• Total average compensation for Vice Presidents at buyout/growth equity funds was down 5% to $424,000, with bonuses down as much as 10% in some categories.
  

• Fund of fund compensation across all levels was down 1-3%, the lowest decrease among the three asset classes.
  

The Report, the ninth annual, analyzes base salary and bonus compensation for thousands of professionals. Compensation is segmented further by fund size for each asset class. A unique characteristic of the Glocap-Thomson report is that it does not derive its compensation data strictly from a survey, but rather from a combination of actual placements executed by Glocap, candidate data maintained by Glocap in the course of its search business (including expected bonus information) and input from Glocap recruiters, fund professionals and human resources personnel.

SOURCE Glocap Search LLC

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