Charlie Linacre, Managing Director, Finatal
The 2026 numbers are clear: carry is travelling further down the deal team than it used to. Here’s what that means for funds, for candidates, and for the way value gets shared in private capital this year.
When we sat down to pull the 2026 Remuneration, Equity and Outlook Report together, one number kept jumping out. Not Partner compensation, which is doing what Partner comp tends to do, but the Senior Associate carry figure.
Senior Associates in mid market PE funds (£501m to £1bn AUM) are now sitting on a median of more than £1.5 million of carry. Five years ago that conversation would have started two seniority levels up.
This is the headline story of the year. Carry has stopped being a partner-only conversation. It’s becoming a team conversation. And the funds that get this right are going to win the next cycle of hiring.
The numbers, briefly
Across the dataset we tracked, base pay has been broadly flat year on year. The movement in 2026 is happening in two places: bonus and carry.
Partner total compensation in £1bn+ funds now sits at a median of £1.23 million, with carry holdings at the top end reaching £38.9 million. VPs in the same fund size band hold an average of £6.2 million of carry. And as above, Senior Associates in mid market funds are at £1.5 million+.
The shape of compensation is changing. The variable portion is doing more work than the fixed portion, and the carry portion is doing more work than the variable portion.
Why the shift
Three things are pushing carry down the team.
First, fundraising is harder than it was. When LP commitments are not flowing the way they were in 2021, GPs are looking for ways to lock in the people who are actually generating value across portfolio companies and deal teams. Carry is the obvious lever.
Second, the talent market is more competitive at the mid level than it has been in a decade. Mid market funds are competing for Senior Associates and VPs not just with each other but with growth funds, with credit funds, and increasingly with operating roles in portfolio companies. A meaningful carry allocation is one of the few ways to make a fund role feel structurally different to an operator role.
Third, candidates are asking better questions. The expectation that you would join a fund and be told about carry several years in is gone. Candidates at Associate and Senior Associate level are asking on the first or second conversation what the carry pool looks like, how it vests, and what the waterfall does in different scenarios.
What this means for funds
The funds that are winning on retention this year share a few traits. They share carry earlier than the market average. They’re transparent about how the waterfall works. They vest in a way that rewards the people who actually stay through the value creation period rather than the people who happen to be in the seat at the moment of exit.
The funds that are struggling, by contrast, tend to share two characteristics: carry sits with a small number of senior people; and the conversation about carry only happens when someone is already halfway out the door.
None of this is rocket science. But the report data suggests it’s more important now than it has been in any year we’ve benchmarked.
What this means for candidates
If you’re a Senior Associate or VP weighing a move, the carry question is now a first conversation question, not a ‘let’s see how the offer comes in’ question.
So here are three things to ask:
- What’s the size of the carry pool relative to fund size, and what’s my likely allocation at my level?
- What’s the vesting schedule, and what happens in a bad leaver versus good leaver scenario?
- How has carry been distributed historically across previous funds by seniority?
Funds that are confident in their carry programme will answer all three. Funds that are not will give you a softer version of the answer, which is itself a useful signal.
The benefits piece is doing more work too
Sitting alongside the carry story is a quieter one on benefits. 94% of firms in our dataset now offer private healthcare. Pension contributions above the statutory minimum are still uneven (only 15% offer above 10%), but the gap between the best funds and the average is closing on benefits like flexible working, enhanced parental leave and learning budgets.
This matters because when candidates have two strong offers on the table and the compensation numbers are within touching distance of each other, the deciding factor is increasingly culture, flexibility and progression. In other words, the soft stuff is doing harder work.
The macro picture
It’s worth including a brief word on context. When we asked respondents what they saw as critical risks for 2026, 47% cited macro conditions, 32% cited geopolitics and 32% cited fundraising. Hiring came in at just 9% as a critical risk.
That’s interesting: funds are not, in the main, worried about being able to find people. They’re worried about being able to keep them, and about deploying capital well in a tougher macro environment. The compensation shifts we’re seeing in 2026 line up with that. The market is moving towards locking in the right people for longer cycles, not towards a hiring spree.
Where we go from here
If we had to summarise the 2026 report in one line, it would be this: the funds that share carry well, communicate it well and pair it with a benefits package that takes culture and flexibility seriously are the funds that will win the candidates with a choice.
The full report includes benchmarks by fund size, role and AUM band. If you’d like to walk through where your fund sits against the data or where you sit as a candidate, we’re always happy to have that conversation.
Full report here.