McLagan works with over 200 of the leading private equity funds across all asset classes on a global basis. Our various assignments are focused on helping clients effectively manage their human capital - pay level benchmarking, headcount/staffing analysis, and incentive plan design, including both carried interest and co-investment plans.
Our private equity business is global in scope, covering the U.S., Canada, Latin America, U.K., Europe, Middle East, India and Asia Pacific markets.
Complementing these proprietary compensation benchmark studies is our consulting services that help clients align their pay systems and pay levels with their business and human resource strategies. Our expertise in compensation and access to voluminous amounts of employee data collected on an annual basis helps us complete customized benchmarking projects and provide our clients with information and insight that helps them make better business and pay decisions.
McLagan understands the nuances across all asset classes of private equity and how size, the nature of committed capital and ownership structure impacts business strategy and compensation structures for independent vs. captive investment teams within larger organizations (i.e., banks, insurance companies and asset managers) and those managing 3rd party capital vs. principal/balance sheet/general account capital. McLagan also has expertise in designing carried interest and co-investment plans for clients.
Below are a few examples of recent client consulting assignments:
Comprehensive plan design for a recent private equity spinout
- Worked with a leading energy focused private equity firm (recently spun-out from its parent organization) implement a formal carried interest and co-investment plan, as well as an annual compensation program and phantom carried interest plan on legacy investments. The information presented represented directly comparable and relevant information to ensure a best-in-class organization, increase transparency for key professionals and guarantee alignment of interest with the firm’s Limited Partners.
Plan design for an Investor Relations/Fundraising team within a leading global diversified alternative asset manager
- Worked with a leading global diversified alternative asset manager design a compensation program (both annual and long-term) for their Investor Relations/Fundraising team. The plan took into account the depth, breadth and complexity of the product offerings in the market on an annual basis while accounting for regional differences in institutional investor base and capital raising potential. The plan provided a level of line of sight on capital raised and addressed the team’s role in handling significant responsibilities outside of fundraising all while providing management a level of discretion upon ultimate payout.
Phantom carry plan design for a pension fund
- Partnered with the private equity group of a large Canadian pension fund align themselves to competitive market practice with the strategic goal to raise third party capital in the future. McLagan structured a carried interest plan on legacy investments through a phantom carried interest plan and provided strategic guidance as well as designed and implemented a market-based compensation plan and more traditional private equity operating model.
Pay construct evaluation
- Partnered with a leading private equity fund-of-fund manager to evaluate competitive market pay constructs, benchmark annual compensation, carried interest allocations, management fee utilization and equity ownership in the overall management company.
Generational transfer and succession planning
- Helped a privately held private equity firm develop a plan for redistributing equity and carried interest between founding partners and second generation future leaders of the firm.