Hi Everyone. Hoping to get input on a decision I need to make. I'm coming from a corp fin background and received two awesome opportunities: 1) Portfolio Operations Associate at a top PE firm (pays really well, 2) Investment Associate at an asset mgmt firm (does not pay as well, but really like JD).
I know the PE role is technically middle office whereas the investment role is front office, but the PE role just pays so much better than I feel I'd be stupid to pass it up. I was wondering what people's thoughts are, and if the earning potential/exit opps for the roles are vastly different? I'm still pretty early in my career, if that info helps. Thanks!
sorry for the double-post; was trying to post this in asset management but it got moved
Hm is comp for pe ops? Do you get carry?
No carry, it's about 60K more in TC than the IA role
I wouldn't say Portfolio Operations is middle office as it really depends on the firm you're going to. Some firms place a great emphasis on that function and hence it's seen as equal to the Investment team, while in others they're second-class citizens.
Also, ask yourself which role do you like more? PF Ops works with management to add value once the asset is acquired, so you wouldn't be doing the investment analysis work on the way in. Sounds like you favour the investment role, but if the asset mgmt firm's brand isn't strong at all you might want to consider the PF Ops role before trying to lateral. Other people's views might differ.
The asset mgmt firm is pretty large, but I would say the PE firm's is definitely better. From the get go the PE firm is treating me a bit better too haha. That being said I do prefer the IA role/team, but that's not to say I don't like the PE role/team, I just prefer that of the IA. Do you think it would be impossible to lateral back into an investment role in the future? That's what I'm worried about - that I'm missing my single opportunity to move into direct investment work. I also feel like I can't miss out on $60K increase TC, which is what I'd get from the PE offer. Not sure if this adds context but I'm also sitting for the CFA.
I am in an operating role and I love it. However, I did not come from a financial background - I came from operating companies. Previous poster nailed it when he said - which role do you like more? Operating roles can be great, but just like any other job they can be a grind. Assuming the fund relies on its operating partners as true operators and not advisors - you will spend a ton of time on the road (even post-pandemic). I'm in my late 40s and am still on the road all the time.
If you are concerned about differences in comp - that's hard to calculate over a whole career. To be clear though - as an Operating Partner, it is highly unlikely that you well ever get as much carry as a deal partner.
Exit ops are also very different - one good thing about operating roles is that you can always make a move to a middle market (or larger) company as a senior executive (CEO/COO/CFO) - especially a company that is PE backed.
Thanks for the response! It sounds like exit opps are quite strong, but only for the Operating Partner level. This would be after many years in the role right? Do you know what an associate's exit opps could look like?
It's true that you are unlikely to get a CEO job unless you have been a very senior portfolio ops person - but of course you can get a VP level job in an operating company - without too many years experience in a PE operating role. It all depends on your background - based on your comments it sounds like that would look like a finance role (Controller, Head of FP&A, etc) that could lead to CFO role
That helps. I'm definitely more passionate about financial investment research type work which what I want to go into in the future. Do you think it would be possible to lateral into that after some years in this PE role, especially if I go back to grad school? Not taking the PE role seems dumb bc of how much money it pays, but I'm essentially picking between: 1) something I really like that pays not that well (IA) vs 2) something I like less (but like, nonetheless) that pays extremely well (PE). What would you do in a situation like this?
If you are talking about going from PE Ops to financial investment research work - that's completely apples and oranges. The former is probably not going to give you any tools for the later (other than a general operating company knowledge). As to which role you should take (or which one I would take) I think of it in the following way. Will the extra cash in the PE job make me "forget" about the extra pain (i.e. - because you like it less). If not, then maybe IA is better. I am sensing you are somewhere in you mid to late twenties and I can tell you have have switched careers 3-4 times in the 25+ years I have been working (1 - military, 2 manufacturing, 3 tech companies, 4 PE). Its been a wild ride and if I made the "perfect' decision every time I would probably be better off financially - but I would be no happier with my career than I am today.
I'm of the opinion that Portfolio Ops is as great as (if not greater) than an exit into the investment team itself. I'll get MS for this because the hardos don't like it when their precious worldview is challenge (plus they tend to all come from IB->PE so they think that Modeling is the end-all-be-all), but the skills that you develop in PE Ops and the swiss army knife that you develop is much more impressive than the PE swiss army knife, and translates into better business skills and sense that investing does. It's unlikely that you'll become a billionaire, but I know PE ops guys that go on to be CEOs of portcos and the comp packages and equity are incredible. I'd rather hire an ops guy to work at my company than an ex PE guy all else being equal.
I say this all as an Associate as a fund, but I kinda wish the prestige hadn't gotten to me and I wish I had given PE ops a better shot.
Thanks for your input! Do you know anything about PE Ops outlook for grad school? Is this type of role looked upon favorably? I'm wondering bc I'm mostly passionate about equity/fixed income research, and was thinking I could move into that after grad school. I don't think I'll have another opportunity to make PE Ops money at my age in an investment research role so I'm inclined to take this PE role
On the surface, exiting from a brand name PE Ops role should be fine for B School, and while you might be viewed at a slight disadvantage in terms of prestige compared to someone on the investment team, it's just a matter of positioning yourself as an operator versus investor, and your actual work experience will be different so you'll be treated somewhere between a traditional finance bro and a consultant. Also, there's such a massive pool of identical PE ppl going to b school honestly AdComs might view this as refreshing.
The problem with taking the Ops offer knowing that you're interested in ER/AM is a red flag on its surface unless you can communicate it well. So you can take the offer but start thinking about some reasons why you took that Ops job in the first place despite having interest in investing. This is usually BS but it has to be well thought out BS
+1 to this. Ops superstars can also join a buyout of a company and run it (w/ a lot more upside). Richest person (well over $50M, maybe $100M+) I know is an incredible operator of distressed businesses and made his fortune that way. I highly doubt an investor would be able to have turned around these companies by simply just financial engineering like the typical PE investment professional.
Do you think it would be hard to get back to the investing side after a stint in PE ops? I don't really want to do operations forever, but this money seems too good to pass up
Echoing the above that I'd take the PE ops job. Don't let something silly like prestige or perception of the role being "middle office" get in the way of what's likely a great learning opportunity and brand for your resume.
How did you find the role? I'm currently on the investing side and I think I want to move over to ops.
Thanks for the input, but I also think that's easier to say already having FO experience. I also don't necessarily want to work in ops forever. I'm more passionate about investment research hence why I'm sitting for the CFA. The idea of staying in ops forever sort of drains me right now, but really attracted to the PE salary :/
That's fair. Always easy to take experience for granted.
How'd you end up finding the ops role?
What's the JD for the PE Ops position? I think people are assuming that you will be an operator and advisor for the PE's portfolio companies. Is that what it is? Or are you doing back office for the PE itself?
it was described to me as a middle office role. it will work with the advisors, fin operations, accounting, legal, essentially all of ops. it includes portfolio analysis, project management, reporting, etc. A lot of people in this role come from big 4. frmo what i understand there will be a lot of analysis on the portcos, not sure about the extent to which i would be the actual operator.
Right, so that sounds like doing middle office work for the PE itself. kindheartedconsultant was referring to a PE Operator role - think management consultants/industry experts that help PE portfolio companies with operational strategy (e.g. KKR Capstone). I would take the investment role if that's your passion. The PE Ops role wouldn't be helpful for investing experience.
Doesn’t matter. Still just support. Go into investing if that’s your passion. You’ll regret it later on. The money will come.
i took the investment role haha
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