Is PE just banking 2.0?
would like to get peoples perspective on whether or not they feel like PE is just banking 2.0? If you disliked banking, did you notice any significant culture or job satisfaction improvements after moving to pe? The banking lifestyle and routine tasks leave much to be desired in a career
I think at the Analyst level, its not that much different. Both require grunt work (ppt, excel, etc.) However, there could be a different at a junior level depending on the firms sourcing strategy. Many times PE Analysts will be cold calling while grunt work it could be thought of as client interaction (more than IB at a junior level.)
In a word, YES.
Slightly better in many respects, but it all depends on your exact situation in banking and your situation in PE.
Agree with this. If you didn't like BB banking, you probably won't like MF PE. If you did like MM banking because you worked on smaller teams, you'll probably be a better fit for a smaller PE shop. It is nice being on the other side of the table and having the "power" to make bankers essentially do whatever you want. Instead of CIMs, you'll make IC decks or LP presentations. Instead of being on buyer calls, you'll sit on LP calls. Instead of doing a VDR, you'll be doing some administrative thing. The one huge plus IMO to PE is no more pitches. I hated the last minute firedrill to pitch a huge deal that we would never get.
I like the work a lot more. During holding period you have long term contact with management teams, see how they operate a business, you can step in if you want to change something, etc.
In addition as an investor you look at many more elements of a business than you do a as a banker. Management, company USPs, efficiency gains, etc. It's just very different being an advisor or investing while your own carry is at stake.
I tend to prefer a small team, a high pressure, competitive, environment and a high degree of social interaction. I tend to focus on the big picture and I am able to think strategically and maintain their long-term focus. Small PE or MM?
it depends if you like your fund strategy too. i find myself questioning every investment the fund makes and it's hard to stay motivated. idk if it's like this for every fund but i think they try to sell you way too hard on the 'interesting work' and 'intellectual stimulation' when in reality it's a lot of the same process bullshit as banking and people juts following predefined strategies / playbooks. wouldn't recommend
LoL, you should probably switch firms then. I had the same problem at my old group, always thinking to myself, what are we doing? Its much more engaging work when you believe in the strategy.
haha thanks man. sometimes i really doubt myself here, i've been here a year and just wonder if the pe strategy isn't for me - it seems like we're always paying ridiculously high prices for not so great assets (esp. in my industry group). did you ever have that feeling too? i've been here over a year and am wondering if i should just switch to another stage of investing (growth or public) instead of just the firm itself...
nonetheless it is pretty demotivating. the more 'conviction' i see from senior folks to actively deploy capital in this sector just makes me scratch my head, especially when i have to come up with arguments for the investments at our committee
PE sucks slightly less than IB, but burnout is even higher because you finally ‘escape’ IB and realize that the promised land is essentially more of the same shit.
What about the hf pm life ?
bump
i didn't know what experiencing burnout was until i read about the symptoms and felt that someone could finally understand me
I think it depends where you go. At a MF you tend to operate as a glorified banker at times just grinding thru models and processing diligence requests without much autonomy. But I believe based on what my buddies in LMM/MM PE have said that you can operate at a higher level than that with an increased amount of responsibility with regards to not only the investment process/strategy but also at the portco level
As an interesting datapoint I work at a very large fund but one that has a wide mandate (e.g., companies with $0XX billion revenue to companies with $0XX million revenue. I work with one portfolio company on each end of the spectrum; for the larger one, I do nothing substantive, all boring lame processing (what value could I possible add to a fully functioning mega corp) but for the smaller one, I know the management team well, I help them with things (not going into specifics) but this is part of my day job - daily. The latter is very rewarding.
Yup that hands-on role with the portco team is what I'd imagine is much more rewarding.
You make more money in IB than PE. Because only .0001% make partner at legit firms where carry is extremely meaningful, PE comp is largely a myth / propagated misinformation campaign. There are innumerable shit-tier PE firms that I wouldn't even leave career-track middle market banking for.
Completely agree. If you're at a middle market or BB bank and you enjoy the people you work with and are in a decent group then you should stay unless you get an offer at a $5bn+ fund. Will say you learn a lot more in PE than you do in banking and you can always go back to banking if PE doesn't work out. But completely agree about the PE comp factor.
Really?? Pretty much any PE VP at MM makes more than IB VP right if you factor carry payments
I think it depends on fund size, fund success, and amount of carry. You aren't going to see that carry for 5 - 10 years. So when you divide it by 10 years it probably comes out closer to what you would make annually over 10 years in banking and that doesn't take into account time value of money. My OP where I said anything less than $5bn fund isn't worth it is an over generalization. Probably should have said anything less than $2bn or $3bn fund isn't worth it if you are in a good banking group.
I think it's a lot different. Banking you get really good at the same 5 things (pitches, CIMS, sellside models, dataroom/trackers, ad hoc analyses). The sellside process is very structured and the work doesn't deviate much from those 5 deliverables which are great things to be good at. PE requires you to be good a lot of other things. For example, stock options vs. UARs vs. PIs, maintaining a cap table, executive employment agreements (interviewing as you move up), tax structuring (for the LPs, GPs, selling shareholders, management etc.), insurance (D&O, management liability, WC, cyber, auto etc), legal review (NDAs, third party engagement letters, vendor contracts), financial reporting (compliance certificates, working with management to develop templates) etc.
There's a ton more I'm missing, but that's just some of the stuff you could do in a given week outside of modeling, business diligence, and putting together IC materials. Way more involved and harder than banking imo, but a lot of it also more boring. So not always greener.
Reading those tasks as something that would make PE more enjoyable than banking made me physically ill
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