It's been a big week for me; got a PE offer for next year.

I only have a few days to decide; I've definitely given it a good deal of thought (even before getting the offer), but for those of you who have moved to the industry (especially from consulting), what were the right questions you asked yourself and your future co-workers that made you sure about your decision?


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Congratulations on the job. Here are the items I would carefully diligence, particularly in today's market:

1. Capital Availability - How much dry powder do they have to make acquisitions? Where are they in the fundraising cycle? A lot of the pension funds and endowments that represent the backbone of PE limited partners are scaling back on their allocations to alternatives and, even if they're maintaining their allocations, cutting down on the number of managers they use. You don't want to join a fund that is struggling to survive. Everyone will claim they will be fine, but it's often untrue. A recently closed fund or fund that has already announced initial commitments is best.

2. Track Record - Kind of goes hand in hand with having capital, since the guys who have done well typically have a much easier time raising money (though this is not always the case). Private equity funds are finite life vehicles, so if you are going to an established firm, they should have a history of multiple past funds. Ask how those funds have performed and where the current fund is underwriting.

3. Post-Program Considerations - Somewhat delicate subject but not really, since it's important. Ask where former associates have gone (preferably specifics, like MBA program or next company). Does the firm promote its pre-MBA associates (which I assume you will be since you are coming from consulting) to the next level or force you to get an MBA?

4. Compensation - Frankly this is consideration #1, because to some extent all the other considerations are wrapped into this one. Easy for a struggling fund to say they're doing fine; hard for a struggling fund to offer competitive compensation. $100K base + $100K bonus is the starting point for a serious fund, maybe a slight discount to that. Anything much less than that, in my mind, signals a firm of lesser caliber. Compensation's important from an exit perspective, too. Future employers who may not be intimately familiar with your firm's performance and caliber can and will gauge your "league" from your current comp.

5. Backgrounds - The pedigree of your peers says a lot. Where did they come from? Why did they join? I like to see people who were clearly successful and enjoyed what they did before coming to the firm, rather than people who left their former roles burned out, disgruntled, jaded, etc.

Parting note: I consider it a positive sign when senior people talk about their families and seem to have a balanced life and enjoy spending time at home.

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1 and 4 to me is the biggest


Thanks - this is super helpful. I think they score well here on all 5 of those metrics...and 95% sure I'm taking it.

Life, liberty and the pursuit of Starwood Points


PG, can you talk about how you made the move from consulting to PE? E.g. what type of consulting were you doing, and where (MBB, etc.)? I am seeking to make a similar transition and I'm sure the info would be helpful for many others out there.

Thanks and congratulations on the offer!


MBB in USA to a generalist MM fund. Worked with headhunters until I found something that I felt like was a very good fit. No specific focus on PE at MBB - made sure I found quant projects with quant impact, but really just followed people I liked and industries I was passionate about. When you're doing something you like for people you like, it makes working hard enough to be a top performer that much easier, and in order to get into PE, it definitely helps to be a top performer.

Life, liberty and the pursuit of Starwood Points

In reply to re-ib-ny

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