Business Valuation Consultant Salary
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Business Valuation Consultant Salary
Private equity wages are a major consideration for those considering going on the buyer’s side. In this article, we will provide salary ranges for private equity professionals starting at the junior level and also compare them to those earned in investment banking.
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The higher up the hierarchy you go, the less transparency there is about remuneration – for this reason, we have excluded data on remuneration for managing directors (MDs) and directors.
Compensation data was sourced from a global alternative investment management firm (i.e. mega fund), so please note that lower-middle or mid-market funds may offer salaries below the range above.
The typical private equity partner has one to two years of investment banking experience, so it is clear that most private equity firms pay above the average investment banking salary.
Apart from marginally reduced working hours and the opportunity to work on the buyer’s side (i.e. investing rather than advising), higher pay is one of the reasons many go into private equity.
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Note that one exception is Centerview Partners, a high-end boutique that is highly regarded for paying its analysts salaries that are competitive with buyer opportunities – hence its industry-leading retention rate.
Given the recent wide-ranging salary hikes for investment banking analysts, compensation for private equity should also follow suit.
But the “full” combined salary is about $275,000 to $390,000 at top private equity firms, but the figure can be much lower for smaller funds and in excess of $400,000 for firms with a reputation for being the highest paying (e.g., Apollo Global ).
The retained interest or “retained interest” is the share of profits that goes to the general partners (GP) of the private equity firm.
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Unlike management fees, carry-forward interest is usually paid only if the fund’s performance meets a certain minimum threshold.
The structure of interest carried varies greatly by firm, but in general, those on the investment team should not expect any returns, at least up to senior junior level, which is still rare.
Starting at the Vice President (VP) level, some carryover can be expected, with the amount increasing for senior level members such as Managing Directors (MDs), as expected.
For megafunds, as well as firms over $1 billion in capital, getting carry at lower levels (like associates) is virtually unheard of.
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As a side note, for private equity analysts, earning an MBA is often a requirement for promotion, so joining a PE firm after graduation is not without its downsides.
This leads to the next point: those with an MBA or other experience may be eligible for higher compensation.
However, standard investment banking and subsequent private equity remains the most common route.
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Get instant access to video tutorials taught by experienced investment bankers. Learn financial reporting modeling, DCF, M&A, LBO, Comps and Excel shortcuts. There are many financial professions such as Business Analyst, Investment Banking Analyst, Management Consultant and many more. While all roles are unique, in this article we will focus on the roles of management consultant and investment banking analyst. Management consulting and investment banking is a lucrative career for undergraduate and MBA students, especially given the six-figure starting salary and prestigious exit opportunities. However, they are not exactly the same and differ in a number of factors. It is important to understand the difference between management consulting and investment banking so that you can choose the career that suits you best.
Salary is a major factor in choosing between a management consulting role and an investment banking analyst role. While you can earn six figures in both roles, investment banking is the way to go if you’re looking for a higher salary.
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For students entering their first year as investment banking analysts at high net worth investment banks such as JPMorgan Chase, Goldman Sachs, and Morgan Stanley, as well as medium sized investment banks such as Jefferies, William Blair, and Raymond James, the initial base salary ranges from $85, $35,000 to $115,000, and total remuneration ranges from $130,000 to $200,000. For elite investment banks such as Evercore, Moelis & Company, Rothschild and Co, you can expect compensation to be slightly higher.
For students starting out in management consulting, top consulting firms like Bain & Company, Boston Consulting Group (BCG), and McKinsey & Company have the highest starting base salary of $90,000 and bonuses ranging from $18,000 to $30 000 USD per year. bringing the total to between $100,000 and $120,000. The big four consulting firms such as Deloitte Consulting, Ernst & Young (EY), and KPMG have base salaries ranging from $77,000 to $90,000, and well-known boutique firms such as Accenture, Analysis Group, and Cornerstone Research have similar figures ranging from $79,500 to $85,000 and performance bonuses up to $8,500.
To sum it up, if you are looking for a higher paying position, investment banking analyst is the best option as you can expect to earn between $130,000 and $200,000 in the first year, while for management consulting the overall compensation range is slightly lower at $79,500. up to $120,000.
The responsibilities of management consultants and investment banking analysts are quite different: management consultants focus on operational and strategic issues, while investment banking analysts tend to work more with transactions and capital raising.
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The job of a management consultant is comparable to that of a business analyst. It consists of advising a company or government agency on a project aimed at achieving a desired goal, such as increasing profitability, improving operational efficiency, identifying market opportunities, etc. Management consultants usually work in teams and collaborate with management and other business analysts of the company to better understand the company’s operations, business model, and challenges, and work to identify the solution that best fits the company’s needs. The duties and responsibilities of the management of the Consultant may include, but are not limited to:
On the other hand, investment banking analysts pay less attention to the operating side of the company and focus on completing transactions and issuing capital for the company. When a company wants to raise capital through an initial public offering (IPO) or debt issuance, investment banking analysts typically assist in these processes by providing underwriting services, determining share issue prices, structuring bonds, etc. The larger the deal, the more profit for an investment bank.
Working hours can be busy for both positions, but investment banking analysts typically work longer hours than management and business intelligence consultants. For a first year investment banking analyst at mid-sized investment banks, you can expect to work an average of 80-100 hours a week depending on what trades are happening that week. As for first year management consultants, the workday is less stressful, but you can still expect them to work 60-70 hours a week on average.
Prestigious exit opportunities are the main reason people go into management consulting and investment banking and take on hard jobs. The skills and experience that a management consultant or investment banker acquires after 2-3 years in the industry are incredibly valuable.
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For management consultants, the easiest way out is to go into corporate governance. Consultants often join a client with whom they have previously worked and therefore have a good understanding of internal business operations or use their industry knowledge to join another firm. Another option is to go to the bank. As advisors develop strong financial skills and knowledge, they may choose to pursue a career in finance, working in private equity, hedge funds, capital research, and asset management. Finally, consultants also have the opportunity to freelance, work for startups, or become business analysts.
When it comes to investment banking, most investment banking analysts tend to move to the buy side after a few years at an investment bank. Investment banking analysts are well-equipped with financial knowledge and experience, making them the best candidates for jobs in private equity, hedge funds, venture capital, asset management, equity research, sales and trading, corporate finance, and startups. After switching to the buyer side, business hours are expected to improve and compensation will generally increase as well.
Management consulting and investment banking are attractive and prestigious professions, but there are differences when it comes to salaries, working hours and responsibilities. Working hours as an investment banking analyst tend to be longer than in management consulting, but are rewarded with higher pay. If these roles
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