Debt pays highest annual remuneration among alternative assets

Industry pay is high across the board but qualifying for carried interest can make a significant difference to annual remuneration.

Private debt professionals receive the highest annual compensation level among alternative investment specialisms, according to research by salary comparison firm Emolument.

The firm surveyed 500 European alternative investment professionals about their salary, bonus and carried interest, and found that those in the private debt industry typically earn the most before carried interest is taken into account.

Director-level roles in private debt typically pay £156,000 ($204,000; €179,000) salary and a bonus of a further £156,000, while carried interest typically pays £1.3 million over a fund’s investment period.

Private equity typically offers the largest carry at £1.73 million and the highest salary at £166,000 but pays lower bonuses of £102,000.

The research also found remuneration growth in alternative assets increases rapidly in the early years of a career. While an analyst typically earns a base salary and bonus totalling £77,000, this jumps by 77 percent to £136,000 at associate level, and that’s before even considering associates will qualify for carried interest worth around £300,000.

Annual compensation increases even more rapidly between associate and principal level, more than doubling to £279,000. While salary increases slow down at higher levels, carried interest increases substantially, reaching an average of £2 million at managing director level.

Investor relations and fundraising directors tend to earn the highest salary and bonus, worth a total of £347,000 but investment professionals earn the most carried interest, averaging £1.5 million compared to just £500,000 for those in investor relations.

Emolument’s research found that only 32 percent of employees receive carried interest, which means the remaining 68 percent receive substantially less pay than their colleagues. Less than half of firms offer employees the opportunity to co-invest and only 18 percent offer loans to employees to allow them to co-invest in their vehicles.