“After being down dramatically earlier in the year, it looks like pay is going to be up nicely this year — double digits for some people,” Alan Johnson, managing director at Johnson Associates, told Institutional Investor. “I think that’s a pleasant surprise because it was somewhat unexpected.”

In the first half of the year, alternatives carried the asset management industry. In fact, private equity funds saw a five-percentage-point increase in projected 2021 incentive funding from 2020 expectations. The PE sector saw massive upticks in fundraising and realizations, which ultimately led to the increase in compensation, according to the report.

“In asset management, the stars are the alternatives,” Johnson said. “Particularly, private equity is the queen of the ball.”

Johnson said the end-of-year compensation boosts will garner a “so-so” reaction from employees in the mentioned sectors: “I think the people in the industry will feel the pay increases are nice, but with all the stress and work and disruption that’s going on, I think people will feel just OK.”

For junior talent, Johnson said the comp increases may not be enough to keep them in the business after a year of minimal recruiting, decreased retention, and complaints of feeling overworked.

Institutional Investor / August 9, 2021