PE Travel and Hours

Does anyone (associate level) at a MM PE fund have any input on this topic? I'm curious how many days per week/month the junior guys will be traveling at a smaller fund. Traveling meaning either overnight for a day or two or even just a day trip here and there. Being in leveraged finance, I travel on occassion to bank/management meetings but I would have to believe that the Sponsor makes several more trips out to the Company during the due diligence process. Can anyone speak to this?

summit

Define "frattiness" please

I don't think I have ever encountered the word "fratty" employed with such a positive connotation...

Most PE firms are much more "waspy"

In banking, it's all "play money..."

sure, you're risking the bank's capital, but at the end of the day, that has little impact on you.

skin in the game

I work at a firm slightly bigger than what you mentioned, but hours are generally 9AM to 8PM. It becomes somewhat hard to track because you travel much more and you have a lot more dinners. When entering competitive bid processes, hours can be longer, probably more like 10-midnight. Nothing like banking, though. Very few weekends, and some of the work can be done from home if you choose.

Though when you work with bankers it goes a lot higher. There's also "crunch time" when getting close to deal announcement/deal close when either buying or selling a company.

But on the whole hours at MM PE firms are significantly better than banking, though still higher than a "normal job."

GameTheory is correct - MM PE shops tend to have somewhat manageable hours. I'd also argue that the experience you get is more valuable in comparison to a bigger fund. You won't get to work deals featured on the front page of the WSJ, but you will take on a broader, more significant set of responsibilities.

If you're working for a PE firm, you obviously already have the financial skill set to do the job. In order to move up the ladder and be ultimately successful in PE, you need solid execution skills. That being said, the more exposure you have to that aspect of the business, the better. In my opinion, you can get more of that at a MM shop. Just my two cents.

What exactly is "execution" I've heard that thrown around a lot

Thanks for your answers! I was also wondering about the classic evolution when you enter PE after 2/3 years as an ib analyst. I know it's really tough-some will say impossible but you can still dream..- to become a partner because the current partners are not willing to give you a piece of their carry... Could you please share your experience? Usually how long dos it take to move from associate to Principal to Director...to partner?? Many thanks

execution, in the simplest sense, means tangibly getting the deal done. this can encompass a lot of things (negotiation with mgmt, lining up lenders, legal issues, etc.)

as far as a track time line, it really depends on the fund itself and how well you perform. I'm sure any firm would consider adding a partner if he/she was bringing enough to the table

Is there ever travel on private jets? News to me.

Travel mostly for management meetings and being present for site visits by accountants/consultants. Travel on private jet is not unheard of when senior people own/charter them.

It really depends on a number of factors such as how operationally involved is your shop with your portfolio companies, where your portfolio companies and/or potential acquisition targets are located, do you focus solely on domestic targets, what level you are at, etc.

I would say that I travel about 15-20% of the time depending on where we are in the deal cycle (i.e. are we doing any on the ground pre-acquisition due diligence like visiting facilities and attending management meetings, are we meeting with our portfolio company senior level executives for meetings, industry events, etc.). We flew private the majority of the time due to fractional ownership of a jet.

basementflat02:

Thanks for the info.
What do you guys hope to really gain from facilities visits? As PE analysts and not operators, what exactly do you expect to uncover that you would be able to recognize, or do you go with consultants/specialists?

Depends on the industry to a certain extent, but lets call a spade a spade - you're checking the box to prepare a diligence defense.

Is some Italian suit wearing HBS-educated finance guy qualified to look at some factory line and make sure everything is up to code? Hell no. You go so that you can say you went and did your best to make sure that the thing at least exists. So if you ever get defrauded and end up in front of a grand jury you can make the argument that you weren't negligent.

Depending on the trade meeting management matters as well sometimes.

As far as private jets, yeah it happens. People tey to use commercial as much as possible in my firm but sometimes there's just no flight. They're not that expensive in the context of a big deal. They're not that cool either.

Yes, in banking the facility visits are definitely much more superficial and done for the sake of saying you did it. But my experience in PE was not in-line with what's described by nycbandar. You're putting hundreds of millions of dollars into something, you're not going to do it sight unseen. Would you buy an apartment without having seen it in person? Now multiply that risk by a thousand and add the fact that its not your money and you have to answer for what you did with it.

The visits have several purposes, the biggest IMO is because walking through these facilities and seeing the actual guts of the operation gives you a much better understanding of the business. You see the production line. You see the delivery of raw material being unloaded in the loading dock. You see the factory workers inspecting production as its being pumped out of the machines. You see the rejection bin being shredded into scrap. Its fairly insightful, if you ask me. You get an appreciation for the dynamics and scale and leverage and labor and value chain.

As junkbondswap mentioned, you also get a view of the business that you're not going to get from inside your midtown office, which if you're in the business long enough, has a lot of value. For example, we'd go on site visits and many of the more senior people would come up with some ridiculous insights that I wasn't even close to seeing... based on their experience with portfolio companies or whatever... like the fact that the fleet of older Italian machines are rock solid and the 20 newer machines are much less reliable. Most likely the current sponsor owner saw that they were nearing the end of their investment and tightened the screws on management's capex spend but still wanted to position the company for sale by showing that there's significant capacity headroom to grow into Management's growth projections without having to invest heavily in capex. And so the partner realized the run rate capacity is probably lower than presented by management since 2-4 of the 20 or so newer machines will be down at any given moment and consequently the maintenance capex will likely be higher than presented... and if we want to hit the production figures in our plan we need to either upgrade the equipment or spend more capex to have a few more machines in the production line. That's not something you're going to be able to glean from your Bain report or from the dataroom.

Like most things in this world, you get what you put into it. If you think you have nothing to learn from something, you're not going to learn much.

Its also really fucking cool to see this stuff.

yes, the mm ones

What are some examples of good MM PE shops?

The bible...

http://www.abraaj.com/mediacenter/Files/PEI_300_2009_Executive_Summary…

awesome post, 4u2bnvs. can someone comment on lifestyle and hours at some of those top firms?

It really varies and it will be hard to get a definitive answer. Further, it will be truly dependent on your own skill set and how quickly you work. I have a friend who is a former consultant than is now at a sizable fund. When he first started out, he was working IBD-like hours because he had to figure out how to run a model on top of the other work he was responsible for. A year later, his hours are more similar to my own - 9/10 - 9/10/11. A lot of this will be dependent on the culture of the firm, how deals are sourced, and what you're working on. My group is part of a larger bank so I sometimes feel there is still a culture of face time, but its nothing like when I was in IBD. I know this sounds corny - or maybe mean - but if your primary concern is hours, perhaps you should consider another industry. Its nice to have a life-work balance but at this age, you probably should be focused more on learning.

This can be a very subjective.

If I had to tag a figure, I'd say about 7% - 10%, although my colleages (associates and above) travel more. Our trips entails more on-site due diligence visits or supporting the portfolio company through advisory, etc. We have the bargaining power to get potential portfolio partners to come into our office if we need to negotiate.

yeah not much traveling unless for management meetings or on-site due diligence.

i would echo the above statements, especially at the analyst level

I travel one week a month.

As a Pre-MBA associate, I generally traveled quarterly for board meetings and then as needed for management visits / portfolio monitoring. I've since changed PE shops where my current firm has a tendency to travel less (board meetings sometimes held at our offices, more portfolio management done remotely, consolidate trips so they are back-to-back). At my current firm, I travel approximately 25-50% more than the pre-MBA associates. Most of the increase is due to marketing trips, industry conferences, and "special portfolio company stuff" where the junior guy isn't brought along (example: interviewing new executives in another city).

I'm a bit of a data nerd when it comes to travel. I've tracked every day that I've traveled since I started in PE four years ago. Here is some data to back things up. Note this is just one data point and that experiences can vary widely even within the same PE shop. Note that personal days include weekends where I was out of town. I was in a relationship during my first two years and single in my second two years, which drove the big difference in personal travel.

Two years in pre-MBA role: Personal Travel Days: 47 (6.4%) Work Travel Days: 111 (15.2%)

Two years in post-MBA role: Personal Travel Days: 117 (16.0%) Work Travel Days: 103 (14.1%)

Depends entirely on the firm. I interviewed with firms that work their post-banking analysts 100 hours a week. The firm I'm going to work for works about 60 hours a week, with no weekends. If you share the name, someone here may know for sure.

~~~~~~~~~~~ CompBanker

how is one more day going to put you over the edge. Just doesn't make sense to me. Anyways good luck!