Key Takeaways
- • Johnson Associates projects year-end incentives for most financial professionals to rise for a third consecutive year, with some professionals seeing increases of up to 30%.
- • Private credit is the lone outlier, with professionals in the sector potentially facing flat or declining year-end incentives amid redemption pressures, fundraising challenges and weaker returns.
- • Secondaries talent is the strongest segment within private equity, with incentives projected to rise around 10%, while private equity overall is forecast flat to up 7.5% versus 2025.
- • Investment bankers in equity sales and trading and equity underwriting are expected to see the largest gains, at 20% to more than 30%.
- • Equities asset management professionals are forecast to see incentive increases of 8% to 14% on average, with boutique active-equity shops lagging.
Summary
For the third year in a row, most finance and investment professionals are set to receive higher year-end bonuses, according to a survey of projected year-end compensation estimates released Tuesday by Johnson Associates. The survey finds year-end incentives for some professionals will be up 30%. Chris Connors, managing director at Johnson Associates, said the outlook is positive across financial services, with incentives rising in banking, private markets, traditional asset management, insurance and hedge funds.
Private credit stands out as the exception. Johnson Associates indicates professionals in the sector may see no increase in compensation and possibly a decline in year-end incentives. Connors described private credit as the lone outlier and perhaps the only declining sector of private markets, citing redemption pressures, fundraising and returns. He noted a bifurcation: the largest multi-strategy firms should see relatively flat compensation, while smaller single-strategy private credit firms are likely to see declines.
In private equity, year-end incentives are projected to be flat to up 7.5% from 2025 levels, depending on firm size and scale. Secondaries professionals are leading the way, with incentives forecast up around 10%. Connors attributed this to delayed distributions in private equity, limited partners seeking liquidity, and firms turning to the secondaries market rather than the IPO market or sales to other private equity firms. Compensation at the largest buyout shops is expected to rise about 5% at the high end, while smaller shops will see flat compensation.
Among all financial professionals, investment bankers are projected to see the highest bonus increases, with equity sales and trading and equity underwriting professionals seeing gains of 20% to more than 30%. Asset management professionals within equities are forecast to see increases of 10% to 15%, per Connors, with a range of 8% to 14% cited for traditional asset management overall. Market appreciation is a key driver of top-line growth, and momentum in exchange-traded funds, particularly active ETFs in Europe, is positive, though flows are mixed. Boutique active-equity managers struggling with outflows are expected to see flat to modestly higher incentives and are lagging the market.
Private credit stands out as the exception. Johnson Associates indicates professionals in the sector may see no increase in compensation and possibly a decline in year-end incentives. Connors described private credit as the lone outlier and perhaps the only declining sector of private markets, citing redemption pressures, fundraising and returns. He noted a bifurcation: the largest multi-strategy firms should see relatively flat compensation, while smaller single-strategy private credit firms are likely to see declines.
In private equity, year-end incentives are projected to be flat to up 7.5% from 2025 levels, depending on firm size and scale. Secondaries professionals are leading the way, with incentives forecast up around 10%. Connors attributed this to delayed distributions in private equity, limited partners seeking liquidity, and firms turning to the secondaries market rather than the IPO market or sales to other private equity firms. Compensation at the largest buyout shops is expected to rise about 5% at the high end, while smaller shops will see flat compensation.
Among all financial professionals, investment bankers are projected to see the highest bonus increases, with equity sales and trading and equity underwriting professionals seeing gains of 20% to more than 30%. Asset management professionals within equities are forecast to see increases of 10% to 15%, per Connors, with a range of 8% to 14% cited for traditional asset management overall. Market appreciation is a key driver of top-line growth, and momentum in exchange-traded funds, particularly active ETFs in Europe, is positive, though flows are mixed. Boutique active-equity managers struggling with outflows are expected to see flat to modestly higher incentives and are lagging the market.
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