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Why would they give you a negative reference? I’d personally take the two years of income vs “maybe” getting promoted. You’d have two years to figure something out while also still doing your IB deals.
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This might be a left field take but if feels like whoever at your firm is making this call has a compliance / scared of their LP mindset rather than seeing the big picture.
If what you're saying is correct and there is no overlap/conflict here, then I fail to see how your advisory business negatively impact the fund or the LPs. Asking for 50% of your earnings so they aren't "material" is punitive and doesn't pass my sniff test. Feels like they are using fear and threat of blackmail to manipulate you / bend you to their will so they get paid..
I feel if they were acting in good faith they would not have an issue and, if anything, look at how they might be able to assist you in growing out this advisory practice and taking a stake, rather than forcing you to shut this. Seems like they are threatening you so you stay as an employee, dangle the potential carrot of promotion. Even the discussion of promotion is done in a gaslighting way, you might get promoted, but if you don't, it's your fault for not advising them about a nonexistent conflict or unlikely windfall.
I might be off the mark, but from my interpretation of this post I would take the option to leave over staying with a firm that treats their people like this.
It sucks that you're in a smaller EM and they feel they can use the threat of a negative reference, however if you're the sort of person who has the grit to do this side hustle I'd echo the above poster and believe you'd be better finding another role / figuring it out with the opportunity cost runway of 2 years.
This is absolutely detached with how any established fund manager operates and the firm not "seeing the bigger picture" is their proposed in-between solution that tries to retroactively reduce the severity of the conduct issue. Moonlighting as an M&A banker while working at a PE fund, even if on unrelated sectors/deals, is probably as close to an outside business conflict you can get besides actual self-dealing.
There is realistically only one option: to quit before this issue becomes a bigger deal than it already is and preferable to either of the two solutions given to OP by their fund. Plenty of ways to transition to an independent advisory practice while retaining a relationship with your fund (you could sign them up as a client, work as their advisor/venture partner, etc.) but the way OP went about it it was bound to be a disaster.
Emerging Market shit he's prolly at some PE fund in Belarus where they hang you by the dick if you don't give the oligarch MD a cut of your side income.
Agreed with the comments above.
Seems pretty weird to me.
The fact that your firm reacted this way instead of congratulating you for doing something really cool tells you everything you need to know. I’d leave if I were you.
Leave
Have them pay out the fee over a multi year period so that each payment is not material.
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Either way you should quit.
Honestly, I don’t know that firms can give negative references for fear of lawsuits. That’s why firms like Citi only provide info on start date, end date, and title. They won’t give anything else, positive or negative. So it may be less of a risk than you think?
Not for actual compliance violations.
Lol fuck that noise.
what possible “negative reference” could they give you that would overshadow you ballin out and closing deals on your own. Nobody hiring you will give a shit.
unless of course you are lying and there is actually a conflict. But it doesn’t sound like that’s the case based on what you are saying.
OP won’t be able to impress future employers with his hustle in moonlighting as. banker while working in PE. All of them have compliance rules on side gigs, and all of them will see it as a guy who doesn’t follow rules.
Not that I’m not on his side. I totally am. Fuck compliance & HR bullshit.
Just saying, he’ll have to hide it going forward. He should quit, and just come up with any other story of why he quit. And hopefully get someone at firm who likes him to be a reference.
Other alternative is to go to his client and arrange a “return” of the money where he still gets paid somehow. But this PE shop may ask for tax returns or something.
Agreed with this. OP needs to make a career decision here.
Stick with PE or
Start his own IB advisory
If he wants to stick with PE, he’s gotta take the penalty. If it seems punitive, it’s bc it is. He had broken the trust of the people he works with by putting significant time and energy in pursuits that don’t benefit the rest of his company. I think his company’s request is reasonable - and doesn’t show bad culture at all.
OP needs to show that he understands this fact by eating the penalty and genuinely showing contrition. Without a genuine mea culpa - staying at this firm (and continuing his career in PE) will likely not work.
If he wants his own IB advisory, he’s got momentum and he likes the work - quitting and keeping the $ is a no brainer. Don’t look back.
You can’t have your cake at eat it too.
The water is too polluted after this. Their resentment is going to grow and they aren’t likely to promote you. You have to leave. Good luck to you. You’ll find something better
I think their claim of you still being up for promotion is bullshit so you should be planning your exit anyway
Ball so hard muthafuckas wanna fine you. What's fifty grand to a muthafucka like you, can you please remind me?
Lol take the money and tell these people to pound sand. If you're doing that well with a side gig maybe you should rethink working with these people full-time.
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No
This is getting really weird. You honestly sound really weak and needy for a VP. Are you really the firm, posing as a VP, trying to get information for the negotiation? What is this try to keep it balanced? Is this an intellectual exercise, a hypothetical? Is this a troll post?
Not a single one. Once your goodwill and reputation at the firm is gone there’s nothing you can do to bring it back. Even with giving up 2 years of pay and continuing to grind they probably would still give you negative references and I doubt you’d get the promotion. People in finance make empty promises all the time if it means squeezing out more work for less money.
You could stay while looking for another gig, on the theory that it’s easier to find another gig while currently employed.
But I’d bet hard against that. The free time available to you will do more for a job search than the edge of being employed.
Not to mention, someone of your entrepreneurial talent maybe shouldn’t be looking for jobs at all.
People here are missing the EM portion. How many other similar sized funds in your city or another one you can move to?
how likely to keep paying your bills with IB - do you have an originations pipe?
To the poster who said HR can’t disclose etc. I think he’ll be asked for actual IPs as references. And what happens in the US may not be the norm.
the case for staying would be if you reasonably believe (assuming no promotion for now) that the lifetime value would be higher.
how many years savings do you have and did the IB fee pay you 4 years of pe firm comp?
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Did you disclose this to the firm and they're only mad because it ended up being a lot of money? Or did you just not disclose it?
Also, just editing to add - were you working on this at all during work hours? I would assume it wasn't just a Sat/Sun thing - this is a bar that most firms set w/ not doing it duirng work hours, so while this firm is being unreasonable with the ultimatum if you want to continue in GE most firms won't let you have a significantly cash flowing finance-related side hustle.
Leave (resign on Monday, don't get fired). They can kick rocks with "negative references" - firms will only confirm start/end date out of fear of a lawsuit. Maybe find a subtle way to remind them of that, or just give HR's contact as the reference as they will know they can't say anything.
You have income to live on for now, you will be able to step back into GE if you network / aren't in a desperate, need a job in the next 6 weeks situation
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Why can't you quit?
This is fake.
If you hand in your resignation at 8am Monday, ahead of being fired, you have resigned... you aren't retroactively fired
The firm can say whatever they want but remind them that you may pursue legal action against them if they say anything beyond start and end date for a reference check
Leave asap, you made your choice and they made their choice. Negative reference…”yah the dude crushed their work for us, and apparently closed a deal 2x his salary while working weekends. Clearly you do want this employee.”
Just quit and keep the money. Tell them they can give all the negative references they want (they won’t say shit, this is just HR power tripping). They can’t say you were fired bc it would be a straight up lie and instant payday for you, and saying anything else negative is pretty risky too.
Bet on yourself and leave. You basically were paid a 2 year advance to give you an opportunity to either find a new job or start your own advisory firm. Staying is a beta move and you will build resentment.
Which region are you in broadly? If you are in Asia PM me, a lot of these dynamics are quite regional. Am ok to act as a sounding board.
Why aren't you speaking to an employment attorney about this? I assume you are but they would be the best for this. However I do not believe things would get any better for you even if you stay. You left a sour taste in their mouths even if you did nothing wrong. I would honestly take this as a sign to leave and focus on this business. Look you got one huge deal that closed, why not go for more? You credible references in your advisory gig you're doing, why not see where this goes? Fuck working for free for them, if they remotely valued you they would've saw that and kept kept you and paid you what you deserve. Fuck them, talk to an attorney and do not fall the bait. Worst case scenario, you leave and they gave you gods gift of a new opportunity to do your own thing and achieve the financial freedom you want. Believe in yourself.
Essentially, you are choosing between "being the founder of an albeit small IB advisory business" vs. "LMM GE employee/VP".
If you can figure out how to do those IB deals, you can figure out how to re-enter GE again. Give yourself more credits.
Seems like a no-brainer to me.
They are likely going to fire you anyway at a convenient time but would rather not have to disclose this income to LPs and so want you to return it while they still have leverage over you. You should return it and apologize and you should probably proactively resign and/or ask for some time to find a new role and a neutral reference.
These rules exist for a reason - and are red flags for the SEC that could trigger an exam & fines for your employer (and/or you). This is also likely a violation of the code of conduct, to which you have likely agreed through annual certifications.
It’s really embarrassing to see so many of your peers yelling ***k compliance & hr. This is bad advice and if anyone commenting here was above even a VP level they would understand that compliance is important to investors and that this kind of attitude will serve them poorly if they want to serve on boards in the future.
If you don’t return the money, you will be fired and your negative reference is going to follow you for a long time. Your best hope here is to return the money, apologize profusely and hope that you can regain trust / put your banking skills to good use in sourcing deals and running exits.
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Yes. You’re being short-sighted. They are going to get that money back from you one way or another and you’re in a smaller region. This will follow you around for the rest of your career. It is in both of your best interests for you to return the money and get them to agree to a neutral reference in writing. Admitting you were wrong and facing the consequences is a good lesson for you to learn now.
And, if you ultimately get fired and they won’t give you a good reference, being able to explain to another employer that you made a mistake and you did the right thing, you may be able to recover from that. If your employer has to make a conflicts disclosure because of you, you’re going to be completely tainted.
Speak to an employment lawyer.
Ignore all of the other advice on this board.
Sold business for family member and co-owners and received comp - business sold to platform of a competitor bus we don't have a platform (indirect competition). Flagged it early and there was no issue. Honestly, the firm seems strange for pressuring you although probably could've handled the situation better. No reason not to leave given negative dynamics, and indeed speak to an employment lawyer (and double check your own contract to ensure you were compliant).
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Keep your money man, this is a no brainer. You'll easily be able to get another job in Growth Equity and worst case if it takes you a few months to a year (bear case) you've already gotten 2 extra years of income from the side practice to support you. That's also assuming you don't go and open up your own boutique which sounds like you could honestly shoot your shot and try to do so as well.
If you’re making that much on advising on deals.
Leave the company
You have 2 years to start a client base where u can start your own company in advisory.
Doesn’t get simpler
The door is open the whole time when you are looking for the key!
This ^^
Leave. Set up your own advisory shop.
Holy cow, this might be the single hardest dilemma I've ever witnessed on this site.
I don't even know what I'd do, good luck OP!
So what’d you do OP
Returning 2 years of income is a complete joke. I would be seeking new employment immediately, to any employer who asked for that.
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