ELECTRA Private Equity’s 20 investment team staff are each set to receive an average payout of about £3m following a year of gains for its portfolio.
This is the first time Electra has set aside carried interest provision – the share of a fund’s profits entitled to be paid to staff – since it started investing its current pool of capital in 2006. It set aside £63m in total for staff after a 26 per cent rise – £222m in gains – in the value of its investments in the 12 months to the end of September.
That rise took Electra’s cumulative gains over the threshold that triggered the incentive scheme provision, although Electra did not specify the level of the threshold.
The firm said £22m of the provision related to gains made in previous financial years.
Private equity managers raise money to buy companies, try to improve their performance and then aim to sell them at a profit. Partners in the funds are typically entitled to a share of those profits.
Under Electra’s incentive scheme, the £63m will only be paid out once it has exited its investments, meaning payouts are likely to be stretched out over several years.
City A.M. Reporter