Pay rises level off in Asian private equity - survey

Two thirds of participants in Heidrick & Struggles' 2016-2017 Asia Pacific Private Capital Compensation Survey said they saw no change in base salary, while only 38% expected a jump in their 2016 bonus. However, 60% are looking for an increase in base salary this year. The results are based on responses from 210 private capital professionals working for global and regional platforms in Asia.

The previous year’s survey found that about half of respondents saw a rise in base salary in 2015 and 45% expected an increase in bonus. Nearly two thirds anticipated an increase in base salary in 2016. It was a similar story in 2015: 64% of respondents were looking for an increase in that year, despite only 38% receiving a hike in 2014.

The downward trend in compensation reflects the generally weaker deal flow seen in 2016. According to the latest figures from AVCJ Research, private equity investment in Asia came to $137 billion, down from $145 billion the previous year. While that is the second-largest total on record, one third of the capital committed went into seven deals each worth $3 billion or more. A further 20% was venture capital.

Nevertheless, the survey found that average compensation levels continue to rise - albeit at a slower pace than before – suggesting that a minority of private equity professionals are seeing substantial increases in compensation. The mean base salary for a partner or managing partner was $424,220 in 2016 and the mean bonus was $498,670. This compares to $410,940 and $415,050 in 2015.

At managing director and executive director level, base salary and bonus were $378,460 and $314,100, up from $357,070 and $284,210 in 2015. For vice presidents, principals and directors, they were $211,160 and $183,430, up from $201,340 and $177,630. Associates and senior associates received $111,480 in base salary and a $92,250 bonus in 2016, up from $106,420 and $84,420 the previous year.

PE professionals in China and Hong Kong were better paid than their regional peers, with an average base salary and bonus of $325,890 and $343,050, respectively. Australia and Southeast Asia (which includes Singapore) are tied for second place, with Japan and Korea not far behind. India comes last, with professionals receiving just 44% of the compensation awarded to their Greater China counterparts.

“China continues to experience a short supply of seasoned investment professionals who can strike the balance of meeting Western compliance standards and cultural needs, and remaining ‘local’ enough to credibly execute deals on the Mainland,” said Michael Di Cicco, partner and head of Asia Pacific private equity and real estate at Heidrick & Struggles.

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