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New MBA + Private Equity = $400K (Maybe)

Private equity is the hot spot in money these days with groups gobbling up companies left and right and big payoffs for members of the private equity firms. (we've reported on the pros and cons of private equity firms.) So--they are the place to be when it comes to making money, right? Well--business vets need not be bitter about reports that freshly-minted MBAs are making $400,000 per year -- before bonuses – in private equity. Because MBA Scouting Report’s Maury Hanigan said it ain’t necessarily so.

Hanigan is the president of the MBA Scouting Report, and she told CNBC’s Erin Burnett that that sum may be slightly misleading. The recruiting strategist noted that the “typical” annual salary gleaned by new Masters degree recipients is, on average, a mere $150,000 to $200,000.

And Hanigan pointed out to “Street Signs” viewers that the elite few who nail the top salary packages may be new holders of MBAs -- but are not rookies in the industry: those earning nearly a half-million dollars are generally people who had actually worked in private equity before returning to school.

If you want to join their lofty ranks, the top three institutions feeding the industry are, in descending order: Harvard Business School, Stanford University Graduate School of Business and the Wharton School of the University of Pennsylvania.

FYI-On average a new recruit on Wall Street receives around $300,000 in total compensation.

Of the $1.4 trillion in total U.S. merger deals announced in 2006, Blackstone Group, Kohlberg Kravis Roberts & Co. and other buyout firms account for about $370 billion, or 26 percent, of the total. That's not just a record in dollar terms but is more than twice the amount of private equity deals for all of 2005, according to Thomson Financial (Source:CNN)

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