Job security concerns are widespread in the US private equity and venture capital industries due to difficulties in raising future rounds of capital, according to a survey by JobSearchD
Job security concerns are widespread in the US private equity and venture capital industries due to difficulties in raising future rounds of capital, according to a survey by JobSearchDigest.com.
With financial markets in meltdown, the report indicates that professionals in investment jobs, although paid very well, see further trouble on the horizon.
As in the hedge fund industry, the report reveals that 47 per cent are happy with their current level of compensation – an 80 per cent increase in satisfaction from last year. The average total compensation, industry-wide, was USD255,000 – up 14 per cent from last year’s figure of USD224,000.
"As we saw the markets falling apart, we decided to wait a couple months to conduct this year’s survey in order to get the reaction from the industry insiders," says David Kochanek, publisher of JobSearchDigest.com. ‘By November, players in VC and private equity careers were feeling pretty good about their compensation but worried about their job security.’
Unlike last year, job security is a widespread issue. In fact, 43 per cent of professionals stated they are somewhat concerned about their employment situation and 16 per cent said they are very concerned. The majority of these respondents said they were concerned about their firm’s ability to raise the next fund.
"With portfolio companies facing tough times ahead, in addition to an anaemic IPO market, it becomes harder to present investors with a plan that lays out a clear path to a successful exit," says Kochanek.
Those who are not concerned about their current employment situation were pretty clear on the reasons why: they were at the top of the firm’s totem pole, their firms had just completed raising a fund or their firm specializes in distressed investments, which presents more opportunity than concern.
The survey also suggests that bigger is better and that funds in the mid range raise the bar when it comes to compensation. When the fund performs well, employees are sharing in the upside with the average compensation increasing to over USD260,000 and the lowest average going to those in the poorest performing funds.
The average work week for professionals in private equity investment jobs is 50 to 70 hours. Those putting in 70 hours per week earn over USD375,000 and that number climbs over USD400,000 for those putting in 80 hours per week. At 90 hours per week compensation levels drop.
"We believe this high level of hours is a result of a firm’s culture – and it is working. Among respondents working more than 70 hours per week, a full third reported their fund was up 25 per cent or more, whereas for those working less, only 13 per cent reported that level of fund performance," says Kochanek.
