The Rich Get Richer


It’s no secret that record amounts of capital have poured into private-equity firms over the past five years. What’s less widely known is that as they’ve grown ever larger, the megafunds have significantly widened the pay gap between themselves and midmarket firms.

A Glocap-Thomson Financial study, the 2008 Private Equity Compensation Report, shows that while smaller firms receive less in management fees than the larger firms, their staffs aren’t necessarily proportionately smaller. So per person, there’s less money to go around.

The result?

According to Glocap, an associate at a megafirm earned $290,000 in 2008, up 22% from 2006. However, in the midsize range, the average associate made $207,000 in 2008, up 8% from 2006. In the two smallest segments, newly minted associates earned $172,000 and $157,000, respectively, each representing a 4% increase from 2006.

Source: Top trends in middle-market private equity, Grant Thornton LLP, www.grantthornton.com.

SPONSORED REPORT

CPEOs provide peace of mind around payroll services

The creation of these new IRS-certified service providers for small businesses clarifies some issues around traditional professional employer organizations.

QUIZ

Pronoun practice to help polish your prose

Using pronouns correctly in writing and speech can help you make a good impression. Try our 10-question quiz.