Private equity firms outgun banks on pay after fees soar

Top US private equity firms are now outgunning big investment banks on pay as the they set aside more than twice as much to dish out to employees last year.

Blackstone, KKR and Carlyle Group earmarked $2m in total pay and benefits per employees in 2021, according to calculations by the FT, as the sector reaps the rewards of a boom in global deal making.

The figure was more than double the amount set aside per employee than Goldman Sachs, Morgan Stanley and the corporate and investment banking arm of JP Morgan, which have much larger headcounts.

The five largest private equity firms, including Apollo and Ares, recorded pay and benefits of $23.2bn for about 11,700 combined staff. 

Goldman Sachs committed around $18bn for its 43,900 staff – around $400,000 per employee. 

Evercore Partners, an investment banking advisory firm, set aside around $950,000 per 1,850 staff, the most of any bank.

The figures come as British bankers gear up for bumper bonuses after a year of soaring investment banking fees in the square mile.

Mergers and acquisitions bankers pocketed total fees of £2.6bn in 2021 according to data from Refinitiv, the highest annual total for M&A banker fees since Refinitiv’s records began in 2000.

The fees are now set to be paid out to bankers in their bonuses, with profits at the banks expected to also exceed £34bn, the highest since before the financial crisis.

London’s big four banks – HSBC, Barclays, Lloyds Banking Group and NatWest – are expected to pay out bonuses totalling more than £4bn when they report their annual results in the next two weeks.