The REAL Project Finance Salary Survey: Part III (VP)

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I can now finally present my latest snapshot of the Infrastructure & Energy Finance market with a specific focus on the remuneration of VPs.  Or ADs, as they are more commonly known in some institutions.  In fact, just to complicate matters, some platforms have VPs AND ADs, where ADs are senior to VPs, and where ADs are technically Directors.  Confused?  Basically I’m talking about those people above Associate level and immediately junior to Directors. I’m talking about those guys, usually with something like 5-8 years total experience, who are becoming experienced deal leaders, and starting to make their names as originators. The next step for these guys is a run at Directorship, where they will hopefully make their name as a real market participant and perhaps take charge of their own team.  I will call these guys VPs.

As I mentioned in my previous post in this series, today’s market is seeing many more VPs being given their shot at the title, both internally and externally, than we have seen for some considerable time.

Internal promotions to D

If there was a period where people didn’t quite believe me that their VPs were their biggest flight risk, they sure do now.  Everyone is on message.  With banks well and truly back in buyback mode already, the increased pressure on this grade has led to a number of double whammies; “we’ll match the offer and we’ll match the promotion – please stay!”  Even outside of this, sensible team heads are forward planning and promoting their VPs before someone else does, and in the process making their asset seem less attainable and thus less likely to come under attack.  Make no mistake – we are, in earnest, back in an aggressively competitive recruitment market in this sector.

External promotions to D

Even on large international platforms, VPs are taking the step up to Director almost as a given now.  Hardly any offers of lateral moves at this level (always accompanied by a ‘promise’) are being accepted now, and even if they are, they are easily neutralised by the HR buyback machine, which is poised like a mamba behind the scenes.

Today’s established VPs (those with c7/8 years total experience) are the biggest winners of the crisis.  When it struck, they were maybe a year or two into their careers.  Suddenly a raft of folk above them were no more, and although deal flow dropped off a cliff these guys had responsibility way above their pay grade on the deals that did remain.  As things started to pick up it was these folk who were maturing into confident and versatile deal leaders, ready to seize a moment which has now arrived.  What follows is my assessment of the VP recruitment landscape in each of the constituent areas of Infrastructure and Energy Finance:


The Institutional Investors continue their unwavering assault on the Infrastructure & Energy debt market, undeterred by talk of insufficient pipeline and indeed of new entrants being too late to a party that’s been in full swing for 2 or 3 years.  Across the board this clutch of new market participants have been the single most significant catalyst for movement in the job market, swooping in for some of the brightest and best project financiers and seldom failing to secure their signatures with the packages, perceived lifestyle and entrepreneurial advantages on offer.  I can point to a number of instances where a well-thought-of VP has been recruited as a number 2 or 3 into a very well respected institutional investor, almost always with Director title on c£130-150k base and often with a mandate to deploy serious capital (in some cases more between the 2 or 3 of them than their previous team of 15 or 20 in the bank was deploying) across a far more adventurous geographical spread.  Perfect, right?  Well pretty much, yes.  When you then see some of these characters picking up 100% bonus cheques and being promoted again within a year, you struggle to find a single downside.  There isn’t one.  Right place, right time, right person.

Even at the lower end of the VP bracket there has been a reasonable degree of movement, with those tasked with leading start-up Debt Funds wanting immediate support in the form of an individual who is able to take real responsibility on one hand, but not beyond building models and writing credit papers on the other.  The junior-mid VP level has therefore been a common second or third hire for some of the newer Infra Debt Funds, but there has also been interest in candidates at this level from some of the longer established platforms, whose success in building a book over the last 2 or 3 years has enabled them to build on their initial staffing model and bring in additional talent.

At the bottom end of this bracket in the credible Debt Funds, a candidate with 6 years’ experience (likely to be stepping up from Senior Associate and to have a mixed modelling/execution focus) could expect a base salary in the £80-90k range with good benefits and a bonus in the 50-100% bracket.  As the brief progresses towards the more established VPs who are by now running execution processes and starting to originate business, we see £100k as the bargain basement, with firms increasingly paying up to and even beyond £120k base for candidates fitting this description.  On a successful platform, bonuses would be in and around 80-100% to be competitive for the best candidates at this level.  And at the very top end of VP, where candidates are vying for Director roles in Debt Funds, we are seeing £130-150k base salaries as standard, with bonuses of 80-120% commonplace.


As already referenced, the banks’ main issue pertaining to VPs has been keeping them, and the buyback/promise machine is working overtime.  Bonus letter day on most of the established PF platforms will resemble Christmas at the McCarthy household, with months of unrealistic and undeliverable promises giving birth to a tidal wave of anticlimax that will wash us right back up here at square one, with those candidates who solicited their recent salary boosts back in the market again (although we won’t tell them we told them so, of course…).  The only difference will be, the institutions whose offers they used as buyback bait this year won’t be interested in a second frolic down the garden path, and the others may be put off by the individual’s restrictive (which was the whole point) new salary expectation.  I hate to labour the point, but so many candidates are the architects of their own medium term downfall (egged on by employers like the small Italian institution which many people mistake for a German, who actually tell their staff to bring them an offer from a competitor and they will match it), for the sake of a few shekels today, that in most cases gets deducted from their bonus anyway.

As and when VPs are lost and the bank has to accept it (usually to the Debt Funds but occasionally to other banks where the brand is deemed stronger, and in a couple of notable recent examples, to Equity), there is a succession problem in most of the banks.  This is because the Senior Associate level (5/6 yrs) straddles the couple of year groups worst affected by hiring freezes in the crisis.  There is an Associate-shaped hole in the market as a result, meaning any good ones trained by respectable houses are in great demand, very expensive for what they are, and being very selective indeed.  I will cover this fascinating market development in much more detail in the next instalment of my tome (Associates, coming soon folks!), but suffice to say for now that it is heaping even more pressure on banks to keep their VPs, whilst some sort of succession plan is formulated.

We are therefore seeing Senior Associate/Junior VP candidates from lesser banks (and even straight from advisory shops, or even industry) jumping straight into established VP roles on market leading desks, on market leading packages.  Even a Junior VP on an active and respectable PF team can expect minimum £85-95k base, with a bonus in the 80-100% range, and a suite of benefits, some houses even offering pensions that equate to 20% of salary for an employee contribution of only 5%.  In the case of someone leaving a Manager role in the Big 4 to take up such a position, this is doubling (or more) their total comp in one fell swoop. Happy days!

At the more senior end of VP on the same platforms, one would expect to see bases of £110-120k (although in some extreme cases – usually mitigating a government-imposed bonus cap as with GIB and RBS – up to £150k!), with bonuses again approaching 100% if not slightly encroaching into multiple territory for an exemplary individual in a stellar year.


The Advisory shops are – and I mean this in a nice way – the lowest common denominator of the Infra & Energy Finance recruitment market, in the sense that those from good houses at the right level can go anywhere – funds, banks, sponsors, you name it.  The Big 4 et al keep producing litters of bright young seal pups for the sharks of the investor and banking community to devour.  KPMG in particular, whose graduate training scheme should be sponsored by Equitix, has seen its Infra & Energy Advisory ranks heavily depleted over the last 2 years.  As soon as they can build a model and have a couple of deals on their CV, off they go.

This presents a massive problem to advisory firms whose Managers are being snapped up as VPs.  Those at Associate level who would normally step up in their place are in even greater demand (more on that next time), as is anyone with more than 6 months’ training and a vague sense of direction around an excel spreadsheet, frankly.  The candidates they would look to in the outside world (those at other advisors, or in industry) to fill this void are equally taking their chance to get to a bank or fund/sponsor, and the truth is the advisors are having to settle for those whose other avenues have reached an impasse, in amongst the odd gem who genuinely prefers a future on the advisory side and shuns the perceived short-term advantages of the wider market for the long-term carrot of Partnership.

At the low end of VP (pretty much unanimously called AD in the advisory shops) you can expect an £80k base and at the top end, driven by intense competition, approaching £110k. So the advisors are not far away from the banks at all in terms of base, or indeed general benefits.  In terms of bonus though, the advisors are poles apart.  10-20% is a common award even at this fairly experienced level, with the stars on 30-40% probably more interested in the accompanying promise of getting a step closer to the Partnership trough than they are in what’s left of their pay-out after Gideon Osborne has taken 40% of it to waste on biscuits and taxis for the Whitehall boys.


The Equity investors have always been least affected of all the market participants, as the group which most easily attracts the best young talent.  Don’t ask me why.  Well ok, do ask me, and I’ll tell you…that being my entire raison d’être and all; the reason why is, the youngsters love a bit of equity, and they love a bit of fund.  Most of all, they love fund.  Since the debt funds emerged, it became clearer than ever that it was the fund bit that they yearned the most.  Most will go equity or debt, as long as it is followed by the four letter F-word, which they so revere.  It oozes sex appeal, it sounds absolutely superb down the coach and horses on a Thursday night, and it generally gets you to Mayfair, where you know you’ve made it when you are hob-knobbing with the One Searchers outside said establishment on all but the very coldest nights of the year (when we’re probably still there, but inside).  Ok, maybe not the last bit, but you get my drift.  The end result is that there may be a smaller candidate population pie at certain levels, but the best equity funds just help themselves to a bigger slice of it.

VP level is an important juncture in the recruitment life-cycle of the equity investors.  If you are going to join a fund at VP level, in the vast majority of cases you’ll need existing equity investment experience (note to all the advisory folk who ‘think I’m close to AD promotion now so I’ll hold out and get it, then move to a fund as a VP’: don’t do it, it doesn’t work like that), unlike the other more junior entry point at Analyst/Associate level, where a much broader pond is fished.  This means that roles at this level are often filled by candidates from direct competitors, or coming back from a short out-of-box stint with a corporate or suchlike, with hopefuls from banks and advisors regularly disappointed not to be considered.  In actual fact, there is a school of thought which says that questions must be asked of any Equity Fund wanting to hire you as a VP if you have no direct investment experience.  Why haven’t they hired someone of that profile?  Have they already tried and failed?  Couldn’t they afford it?  Do they even have a fund, or are thy another of the “we’re getting some money soon” brigade?

Long story short – on a respectable Equity Fund platform at VP level, aside from a solid (100%+) bonus structure and sometimes carry, you will be looking at a base salary from £120-150k.


In the UK there is an increasing pay gulf between those sponsors who have embraced change and added new innovative revenue streams as the PFI gravy train slowly ground to a halt, and those who haven’t.

Of the former, John Laing is a good example.  With a bold new CEO they have entered new markets both technologically and geographically, bringing in top talent and paying the going rate for it.

Of the latter we have a number of smaller, UK-only houses, unable to compete with aggressive movement in remuneration and their Director salaries resembling that of VPs elsewhere.  With a very limited UK pipeline to chase, material bonuses will be hard to imagine (indeed, in some cases the house maximum is c20%), pricing such shops well below the market for those much-coveted candidates who bring genuine accretive value, modern ideas and who can make things happen.

Leading the way in the sponsor remuneration stakes are the firms who want to compete with the secondaries funds et al, seeing themselves as equals rather than waiting for individuals who have exhausted their fund dream and are now settling for 2nd best.  Indeed, there have been some good examples (such as the recent move of Ryan Prince from Macquarie to Laing) recently of what I would consider first class individuals opting for sponsors when they very easily could have joined top tier Infra Equity Funds.  People like this are prepared to sacrifice a certain element of bonus % (you might get 50-75% with a leading sponsor at senior level versus a potential multiple in the right place at the right time on the fund side) in return for greater ability to shape things, for a clear career path, and for the chance to work for a collegiate company where one can be at the top of their chosen profession yet still have something resembling a life.  What they are not prepared to do, and no longer need to do, is settle for construction company packages of the nineties with small inward looking concession chasers.

So what is the going rate for a VP – also known as Senior Managers, Senior Investment Managers, etc – in a Sponsor?  Well, very much like the banks, the bargain basement for this level of individual is around £85/90k.  However, the band is broad on platforms that tend to be reasonably flat in structure, and in the truly progressive, international, modern sponsors, solid VPs are increasingly seen on salaries approaching £110-120k.  Bonuses range from 20% at the bottom end up to 75% on the punchiest platforms, with the average for a solid performer at a successful house falling somewhere around the middle of that range.  What you will often also see with sponsors (and something which differentiates them from Equity Funds) is a generous benefits package including car allowance, strong pension contributions and holiday allowance in line with the positive work/life balance philosophy the leading sponsors have been advocating since long before it became the fashion.

I’ve said it before and I’ll say it again; in my opinion the leading sponsors are some of my favourite organisations to work with, and in the best of them the remuneration can be as attractive as the opportunity is compelling.  However, a candidate looking at opportunities in this market segment should be aware of the sizeable gap (financially and otherwise) which has opened up in recent years between those shaping the game and moving with the times, and those making up the numbers.