Private equity pay in 2025: weathering the storm, but barely
Private equity has had a rough few years, with firms struggling to exist long-held investments (and by extension, make money) but the industry is still compensating its people generously – if pragmatically.
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Our 2025 Compensation & Lifestyle report received over 2,500 responses from professionals in the financial services sector, including in private equity. These professionals noted an average increase in their bonuses of almost 50%, well ahead of the buy-side average increase of 24%.
The biggest increases in private equity bonuses last year came at analyst or equivalent level, with juniors experiencing an 111% increase compared to 2023. By comparison, private equity MDs said their bonuses increased by only 1%.
This discrepancy likely reflects an attempt to motivate juniors in the industry in a year when the outlook for private equity seemed poor. With IPO markets still slow, many funds resorted to secondary sales to continuation vehicles. In these circumstances, senior staff appear to have taken a hit in an attempt to motivate juniors in the short term.
It’s important to note that private equity rank terminology differs from banking; for example, there are very few PE analysts compared to banking ones, and more associates. Mid-tier ranks also tend to be “principals” rather than “directors” or even occasionally “VPs”.
Private equity professionals have another compensation component that is not represented in our survey: carried interest. This is a small, allocated fraction of a deal’s equity that is distributed as a reward to the team that worked on it. Carried interest can range from zero (for juniors) to 100’s of millions of dollars/euros/pounds.
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