Private equity pay has plateaued; hedge fund pay hasn't
2022 wasn’t a great year for finance – but 2023 might be a tiny bit better.
So says a report by Johnson Associates, the compensation consultancy. Tracking finance pay, on an index with 2019 as a baseline, shows that whilst a number of finance professionals are paid below 2019 rates (including investment bankers), for others 2023 might be an improvement on last year.
Johnson Associates isn't optimistic about many areas of investment banking pay, but it thinks things are a bit better on the buy-side. As the chart below shows, private equity pay is up significantly on 2019 and is expected to plateau this year. Hedge fund pay is also up on 2019 and is expected to increase this year compared to last.
Johnson's private equity pay prognosis is flattered by the fact that it's only looking at salaries and bonuses and isn't considering the carried interest payments that have plummeted at the likes of Blackstone.
The worst place to be on the buy-side this year is long only asset management. There, Johnson says pay peaked in 2021, fell last year, and will fall dramatically again in 2023.
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