Show me the (infra) money…

January is traditionally a time for reflection, but moreso it’s a time to plan for the year ahead and ensure you’re in position to make the most of the market… which is not so easy these days given, as one old chum puts it nicely: “It’s hard to eke out an existence when there’s a dearth of opportunity”.

This has been the market status for longer than any of us care to think and – without harking back to the “good old days” when deals flowed – leaves one looking for health indicators.

Possibly the best test is base salary and bonus expectation, something that is being discussed at senior levels across London at this time of year.

Hope – while it springs eternal in the human breast – is not too high on the salary/bonus front this year. As one contact of many years standing says: “Everyone knew this time last year that the next couple of years were not going to be stellar, so nobody should be taken by surprise when their bonuses are lousy.”

Now that’s a guy who knows how to manage his own expectations, and quite right too if everything we’re hearing about bonus rounds across the board plays out.

Juniors are without question in the best position – a position they have enjoyed for a few years now. Your average grad is on a starting salary of £35k to £50k at a bank or financial adviser, a base that could have their student loans paid off before they hit 30… given their trajectory potential over the next few years and a somewhat humble lifestyle.

As with all things salary-related, the type of organisation you work at will massively impact your earning potential. If you have three years under the belt at a bulge bracket bank and haven’t slept since you were 23, you’ll be hauling down the best part of £90k to £110k on base with bonus potential of 50-80%.

These guys will likely take a pay drop to make the move into an infrastructure fund, which is what so many of them want to do. By the way, a word to the wise to the weary bulge bracketeers, that career shift does not come with a guarantee of improved work/life balance… no matter what the recruiter says.

Then at the other end of the scale (no insult intended), if you’re at the Big 4, a quality technical advisory house or a model audit specialist – and you have the right personality combined with stellar financial modelling skills – it would be fair to expect a healthy uptick in salary to make the same shift.

Three years as a financial modeller and you’re earning £55k (if you’re good) and scoffing at the miserable bonus that you airily allude to when chatting with mates (but never put a figure on as you don’t want them to bellow laughter in your face).

However, hopes have a horrible habit of being dashed. And that’s what happens as often as not when cruel reality bites. After a few years of hard yards, building models till your eyes bleed… you’ve just hit the jackpot with a job at an infra fund, but you ain’t getting top dollar. Bear in mind, you will be told, all good things come to those who wait (not always, by the way). You won’t get the same as the former bulge bracket banker.

And so expectations are managed downwards yet again, but hey – look – you’re at an infra fund, you’re sitting on the right side of the table, your old boss is wishing he/she had been nicer as you’re now a potential client… and the world’s your lobster.


It’s difficult to pull together salary data for banks in the infra space because the organisations themselves vary so dramatically. At the one end – Credit Suisse, Macquarie, Morgan Stanley – you get top dollar to join outstanding banks where you will be worked like a swamp donkey till you drop, but you’ll be rewarded.

Most people do not work at such organisations, though many wish they did. The reality on this front is that if you never got a job in one of these shops, it’s because you’re not the right person for it – get over it.

So let’s look at the middle-range lenders – good shops, plying their trade, shifting reasonable amounts of cash out the door and not doing too many stupid things. You can name them. I’ll save their blushes.

Received wisdom is wrong (as it so often is) that people at the top of the tree are secure in their salaries and bonuses and that they will be “looked after” by the bank they have served faithfully for so many years. Fat chance.

“Salaries and bonuses at the very top level – managing director and senior managing director – are getting hit quite hard this year,” says one top infra banking source whose job title falls into that category. “Nobody’s going to come out of the process punching the air with delight.”

Avoiding the broad brush strokes that Michael Page applies to its salary survey, apply your own knowledge to the numbers that follow and work out which bank falls into which category. For example, what the Japanese banks lack on base, they make up on stability (you’ll still have a job this time next year). They definitely don’t make it up on the bonus!

An average salary for a VP in origination with six to seven years’ experience (approaching director level) comes in at £100k to £110k with a bonus of about 30% at the lower end, rising to 50% at a mid-market shop. Yes, you will come across lower and you will come across higher base salaries, but this is a fair guide. As for the variable, it’s fluid. However, if you are performing well and getting less than 30% – you need to have a word with your boss.

Director salaries are troublesome. The lowest I came across when working at One Search was embarrassing. At the time I learned this person’s salary, I had just placed someone in to a job with three years’ experience who was earning more… with similar bonus potential.

That is an extreme case but I still raise my hat to that person who bore up under such an insult with more grace than I would be capable of displaying.

One bank this week revealed a director (2-3 years at D level) salary range of £150k to £160k base with a bonus of about 80%. However, on repeating that to an MD at another bank, the response was: “Oooof…!” swiftly followed an insistence that his shop was not so generous, offering £130k to £140k and a variable that came in closer to 70%.

As for managing directors, that really is a moveable feast… sometimes a moveable famine.

The bonus element tends to sit around the 100% mark, but there’s plenty of folk out there who are getting a heck of a lot less than that – and this year some MDs are bracing for bonuses to be slashed by 20% or more.

The range is huge – from £200k to £300k with a bonus expectation of around 100%. However, I know of MDs in good outfits who were taking home as little as £180k and the bonus was a long way from the 100% benchmark. Having said that, there’s a good number of folk out there earning considerably more than that, but nobody likes a show-off.

As my old boss at One Search – Dan McCarthy – says (in his inimitable style): “The best infra/energy financiers in the market remain in strong demand, both from competing banks and from the institutional investors who continue to chip away at the banks’ market share.

“That said, even for these guys a bonus flat to last year is probably a good outcome this year. For the others – average performers on good platforms, and anyone on a platform which underperformed in 2017 or which is pulling back, we are already seeing haircuts of 20-40%.”

Happy new year folks… and remember, we do it for the love – not the money!