Blackstone Inc.’s private equity fund for wealthy individuals is a harbinger of two trends that many expect will transform investment management in the next decade. The first is getting a class of investors called “mini-millionaires” or “suburban millionaires” into alternative investments, and the second is pushing private equity for retail investors.
A century ago, “millionaire” meant “rich.” With mansions selling for $50,000, yachts for $10,000, servants paid $500 a year and Harvard University charging $200 per year for tuition, someone with a million dollars could live very well. Today that entire first million won’t get a mansion, or even a single-family home in some neighborhoods. It could take $50 million or so to put you in the category of a 1923 millionaire.
FAQs
The highest paid private equity fund is Blackstone, which paid its CEO, Stephen Schwarzman, $1.1 billion in total compensation in 2021. KKR's co-CEOs, Joseph Bae and Scott Nuttall, received over $100 million each in carried interest and bonuses. The private equity industry offers immense earning potential.
Who is the richest person in private equity? ›
Leading the list this year is Stephen Schwarzman, chairman and CEO of Blackstone Group, with a net worth of $37.4 billion. While he originally cofounded Blackstone as a boutique merger-and-acquisition advisory business in 1985, it has since evolved into the world's largest buyout firm, with $684 billion in assets.
Why are people in private equity so rich? ›
Private equity owners make money by buying companies they think have value and can be improved. They improve the company or break it up and sell its parts, which can generate even more profits.
What is the failure rate of private equity? ›
Statistically, there is an increased risk of failure with private equity ownership. PE portfolio companies are about 10 times as likely to go bankrupt as non-PE-owned companies. Granted, one out of five companies going bankrupt doesn't portend certain failure, but it is a startling statistic.
What is the average income for private equity? ›
What Is the Average Private Equity Firms Salary by State
| State | Annual Salary | Monthly Pay |
|---|
| California | $89,038 | $7,419 |
| Maryland | $88,832 | $7,402 |
| Tennessee | $88,240 | $7,353 |
| Utah | $87,969 | $7,330 |
46 more rowsVice President Private Equity Salary
| Annual Salary | Monthly Pay |
|---|
| Top Earners | $244,500 | $20,375 |
| 75th Percentile | $190,000 | $15,833 |
| Average | $157,532 | $13,127 |
| 25th Percentile | $115,000 | $9,583 |
Traditional private equity funds have very high minimum investment requirements, potentially ranging from a few hundred thousand to several million dollars. As such, most private equity investing is reserved for institutional investors (such as pension funds or private equity firms) or high-net-worth individuals.
What is the average salary of a CEO private equity? ›
What Is the Average Private Equity Ceo Salary by State
| State | Annual Salary | Hourly Wage |
|---|
| California | $73,981 | $35.57 |
| Nebraska | $72,906 | $35.05 |
| Maine | $72,432 | $34.82 |
| Missouri | $72,062 | $34.65 |
46 more rowsThe Top 10 Largest Private Equity Firms by AUM (Quick Summary)
| Rank | Firm Name | AUM (in billions, approximate) |
|---|
| 1 | Blackstone Group | $881 |
| 2 | Apollo Global Management | $481 |
| 3 | Carlyle Group | $325 |
| 4 | KKR & Co. | $252 |
6 more rowsNo. You just need to know where to look. Given the low return environment, many investors are exploring private equity investing for the first time, attracted by data points such as the 10.7% ten-year return for the Cambridge Associates LLC US Private Equity Index®.
Private equity funds are illiquid and are risky because of their high use of debt; furthermore, once investors have turned their money over to the fund, they have no say in how it's managed. In compensation for these terms, investors should expect a high rate of return.
What is the average return on private equity? ›
Private equity produced average annual returns of 10.48% over the 20-year period ending on June 30, 2020. From 2000 to 2020, private equity outperformed the Russell 2000, the S&P 500, and venture capital.
What is the lifespan of private equity? ›
The life cycle of a typical private equity fund is usually ten years, but that ten years generally doesn't start until the team raises substantial capital and it doesn't end until all assets are sold.
What happens to private equity in a recession? ›
Private equity can be a very well-performing asset class during a recession. By understanding the risks and opportunities and having the right processes and technologies in place, your firm can punch above its weight and deliver high-quality returns to its LPs.
Is private equity harder than banking? ›
Both investment banking and private equity are demanding careers that require long working hours, although private equity firms tend to have a more relaxed work environment and offer a more flexible schedule.
How much do top private equity partners make? ›
At the low end, such as at a brand-new fund with a few hundred million under management, a Partner might earn in the $500K to $1 million range for base salary + year-end bonus. As fund sizes approach several billion under management, Partners move closer to an average of $1-2 million in base salary + bonus.
What is the highest position in private equity? ›
Partner Or Managing Director (MD)
In the majority of cases, this is the most senior position that can be obtained at a private equity firm. Many managing partners and directors are also founders of the company itself.
How much does a CEO of a private equity firm make? ›
How much does a Private Equity Ceo make? As of Sep 3, 2024, the average annual pay for a Private Equity Ceo in the United States is $82,146 a year. Just in case you need a simple salary calculator, that works out to be approximately $39.49 an hour. This is the equivalent of $1,579/week or $6,845/month.
