So much for private equity offering a good way to get rich through carried interest payments and bonuses. Today's annual results from Blackstone suggest that something nasty has happened to the generous incentive payments once offered by large private equity funds.
In the past year, all carried interest payments and incentive fees made to employees at Blackstone have fallen by 60%. 'Realized carried interest' (in other words payments made to employees after businesses have been exited) payments to employees have plummeted by 79%. In 2011, Blackstone employees received 40% of their pay in the form of incentive fees and carried interest combined. In 2012, only 20% of their compensation came from such performance payments. Blackstone staff aren't exactly living off their salaries yet, but it's getting close...
Separately, Morgan Stanley released its first quarter results today. They don't look too good for any Morgan Stanley bankers who are hoping that their pay for 2013 will be an improvement on their pay for 2012: Morgan Stanley cut compensation in its Institutional Securities Business by 14% year-on-year in the first quarter.
Anshu Jain and Juergen Fitschen's bonuses will be capped at €7.55m and their fixed salaries will be capped at €2.3m. (Reuters)
Schroders has hired a fund manager from Jupiter to replace Richard Buxton. (Telegraph)
“It is clear that Schroders needs to rebuild its UK equities team and this is a start. But it will be a hard slog.” (The Times)
RBS cut 50 people in Germany last year, but now it’s hiring in transaction banking and sales. (Bloomberg)
Ronan Connolly, head of equities trading for EMEA, is leaving Citigroup. (Financial News)
How to get ahead in investment banking: become a Chinese citizen. (Breaking Views)
Helena Morrissey's children are aged four to twenty one. (Evening Standard)