Private equity firms aren’t the only ones competing for a small pool of high-achieving, skilled young professionals either. Other types of investment firms prize private-equity trained associates for their deep fundamental research and due diligence skills. Junior private equity employees often also make good business school candidates, so they have the flexibility to walk away from a job, go back to university, and make themselves even more marketable.

For those reasons, the increases in cash compensation this year weren’t surprising to Keizner. There were far more interesting changes to compensation packages in 2023, he said.

The number of junior employees eligible for carried interest — a share of a fund’s profits as compensation — continued to rise. This year, 46 percent of private equity employees surveyed said their firm offered carry to analyst, associate, and senior associate levels, up from 45 percent in 2022 and 41 percent in 2021. The trend is even more prevalent at smaller firms; 51 percent of professionals at firms with less than $3 billion in assets said they offered carry to more junior employees.

For employees, carry is what can make a world of difference in compensation. “You can spend your bonus, but if you get a big carry allocation, that’s your nest egg and second home and everything,” Keizner said.

Even for the most junior employees, carry can be significant. Twenty percent of associates received carry and the median amount was 2.2-times their base salary. Meanwhile, 47 percent of senior associates received a median carry equal to 4-times and 92 percent of vice presidents received a median carry equal to 5.7-times.

For the first time this year, Odyssey also asked survey participants about co-invest opportunities, a topic coming up more with candidates, Keizner said.

The recruiting firm found that 37 percent of analysts, 41 percent of associates and 46 percent of senior associates were now eligible to co-invest at the fund level. Forty-six percent who are eligible to co-invest are offered leverage on the dollars they invest, Odyssey’s survey found.

“It’s certainly come up as more of a feature of what’s important to people,” Keizner said. Like carried interest, co-invest opportunities help “attract and retain, especially more junior and mid-level, talent. They do get paid big cash bonuses, but the danger of that is that you take it, and you bank it, and you walk away.”

Fifty-eight percent of private equity employees said their firm fully paid for their healthcare and dental insurance premiums but only 63 percent said their firm matched their contributions to a 401(k). Almost half of private equity firms catered lunches (48 percent) and company happy hours (51 percent). Forty percent offer employees a car service to and from the office.

Data about other benefits were a bit of a head-scratcher for Keizner and his colleagues.

“It’s pretty surprising that 14 percent, so that’s over 140 private equity professionals, say that they are not getting free snacks or coffee or tea at their place,” Keizner said.