Leaving IB early after accepting PE offer

Hey guys - I recently accepted a summer 2018 PE associate role with an upper MM fund. For those of you who are at banks on a calendar year bonus cycle, what is the norm for departure date? Ideally, I would like to take ~3 months off to travel before starting in PE. Given that my bank does not offer a stub bonus for departing analysts going to PE (i.e., a pro-rated bonus), the forgone base comp isn't enough reason for me to stick around. Would this be frowned upon by PE firms?

 

Congratz on the PE offer. Although I don't know too much about how your future employer would think if you left, I'd love to hear your story on your recruiting process. How did you get the offer, why you recruited "off-cycle" as opposed to the standard 1.5 years before, and what type of firm you are headed to.

Thanks

 

I really don't think leaving 3 months early is going to be an issue, especially since you wouldn't be getting your bonus anyway. When a PE firm hires an IB analyst, it expects the analyst to come on board with a certain skill set and level of experience. Obviously, if you were to leave a year early, that might prevent you from getting to the level you'd be expected to be at, but 3 months isn't really going to matter. Plus you'll join the PE firm completely refreshed and believe me, the last thing a PE firm want is to get associates who are burned out from the get go.

 
Best Response
mtnmmnn:

I really don't think leaving 3 months early is going to be an issue, especially since you wouldn't be getting your bonus anyway. When a PE firm hires an IB analyst, it expects the analyst to come on board with a certain skill set and level of experience. Obviously, if you were to leave a year early, that might prevent you from getting to the level you'd be expected to be at, but 3 months isn't really going to matter. Plus you'll join the PE firm completely refreshed and believe me, the last thing a PE firm want is to get associates who are burned out from the get go.

Just to play devil's advocate a little bit, 3 months at the end of a 1 year analyst stint can actually be quite meaningful. If you assume the first 50% of the first analyst year is spent learning basic processes of the job (like spreading comps), then the remaining 50% is spent learning how to work in real transactions. Taking 3 months off would cut the transaction learning period in half, which could be impactful.

And I hear your point on coming to PE 'refreshed' - definitely important. I was fully refreshed after my 3 weeks in Central America, though, and perhaps felt like I had lost a bit of my mojo by drinking mojitos on the beach for 20 days straight. I wonder if I would have just sucked if I'd taken twice the amount of time off - seems likely.

 

Analyst stint are usually 2 years so 3 out of 18 months of transaction experience is only 17% ;) Obviously, there's potential to learn a lot in those last 3 months, but my experience has been that 2nd year analysts going to PE tend not to get staffed on anything important during their 2-3 last months as senior people don't want to have to switch analyst midway through a deal so I would think you would not be missing out on a lot.

You might have felt sluggish after 3 weeks on the beach, but imagine what 2 years of bschool does to you ;) It definitely took me a month or two to get used to working again after 2 years of non-stop drinking, travelling and sleeping in every morning. Just felt so tired and slow even though I was lucky to start at a relatively slow time. In a sense, it's like when pro athlete come to training camp after the off season, they are a bit out of shape but don't have the physical / mental tiredness that comes later in the season when they've been doing something really intense for a while. As a VP, I would much rather get an associate that is a bit sluggish, but hungry and motivated than one who is at peak performance, but kind of jaded. Obviously in this industry dominated by intense type A people, not everyone thinks like me.....

 

Why don't you just contact the PE firm and frame it as a discussion of acceptable date ranges for leaving/starting? If they don't care then you can do whatever; if they do care, well then at least you'll know.

 

Have you gotten to know any of the more junior associates? Email/call one of them to ask their opinion. They will know how things like that are viewed at your new employer with limited political risk to you.

 

Has it been done? Who knows?!?! I'd guess yes given the thousands of analysts over the years that have transitioned to PE. Yes, someone has probably done what you're describing.

At the end of the day, it's about perception. I would think any person at your new firm (associate onward) would perceive you to be a slacker or a person that's avoiding hardwork given you just up and left your IB program 1 year early for no real reason but you felt like it. Nothing at all is new about analysts hating their jobs. Analysts before and after you have/will hate their jobs.

If I were you, I would do the following:

1) Unless you're being violated or blatantly disrespected at your job, you need to take a minute this holiday weekend to understand the value of your seat. Thousands of young adults want your cube. Humble yourself and be thankful you even have a job in IB.

2) There is much to learn as a 2nd year analyst. You make the most of the projects and the responsibility you take on.

3) Dont be a lazy ass. If you leave early, go to a new job. Maybe some operational role at a fortune 1000. Or maybe start at your buy-side shop early.

The fact that your acting like you're in need of such a long break and you've barely just joined the adult workforce makes you seem VERY weak (maybe spoiled) to me. Life gets nothing but harder and more is expected of you as you move up. If you need months vacation now b/c you hate IB, I just can't see you in an associate PE role.

Most analysts do take some time off between the IB and PE transition. I had 5 weeks and that's a long time. I'd say that's the MAX time needed. Most of my buddies had 1-4 weeks.

Lastly, you don't even have a fucking PE offer. Chill

 

Sounds like a good opportunity. I'll disclaim this by saying I'm still pre-MBA, but I think your post-MBA prospects will be dictated more by what school you attend rather than the prestige of the PE firm you work at pre-MBA. I know plenty of people from MM PE that have walked into Harvard, Wharton, you name it. So I'd say go for it - the whole reason you went into banking was to get into PE, so why run on the treadmill for another year when you can jump out in front?

Disclaimer #2 - I left my bank for the buy side after 18 months, so perhaps I'm biased. Has worked out just fine though, I'm treated just the same as all those that stayed the full 2 years.

If you feel the fund you're interviewing for is a fit - go for it. Give your staffer the finger on the way out.

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 

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