The squeeze on middle management compensation and recruitment in the European private equity real estate industry is easing, but bonuses are lighter this year, according to recruitment firm Bohill Partners.
Thomas Hughes, senior consultant at Bohill, said: “Senior directors have been focused on closing deals and raising capital, while also managing and restructuring existing assets. This has been reflected in strong compensation levels for the most successful leaders, but has to a certain extent sidelined the expensive execution management layer of vice-presidents and directors without these skills.”
Analysts and associates stepped up into the resulting gap, with the best talent being paid at historically high levels and some being offered carried interest for the first time, said the firm.
Hughes added that the aftermath of the financial crisis has also meant demand has risen for asset management professionals with particular expertise in refinancing, portfolio repositioning, and hands-on property management experience in attracting and attaining tenants, as well as handling distressed situations.
People with financial acumen and knowledge of bricks and mortar are being paid premiums for these skills.
Bohill said salary levels in the private equity real estate industry in France and Germany are broadly comparable to the large and competitive London market. In larger private equity real estate firms in continental Europe, where managing directors often have broader roles including managing office operations, basic salaries can be well over the €300,000 mark.
There is increasing interest in the Nordic markets and this is expected to be reflected in long-term upward pressure on salaries for staff with knowledge of these markets.
In the troubled southern economies of the eurozone, salaries for junior positions in particular are under strain, but the scarcity of top talent in smaller markets such as Spain and Italy means that experienced senior directors can continue to command good compensation packages.
