Determining lean or heavy headcount at PE Firm $/headcount
How do you determine if a team is lean or heavy headcount wise?
What should you aim for?
- Do you first determine the most recent fund raised? This would segment the fund into LMM/MM/UMM/MF
- See how large the checks are
- Count the number of senior people, Principal +
- Divide and get a $/Senior
Lower ratio depending on LMM/MM/UMM/MF would mean less economics per person
It could also equate to more work since there are more seniors, each senior would want to chase their own deal and if there are not enough associates/VPs you could be working long hours
Have you seen any ridiculous $/headcount ratios high or low? I am sure they exist at HFs but what about PE?
How do you think about this as an associate evaluating different firms?
Would you be wary of joining a firm with too many associates? (Hard to get promoted as you are competing against others, not getting enough reps, etc)
Bump
Interested to see thoughts.
Another point not mentioned would be to check strategy. Is it clear that a key focus is buy and build? Likely much more work to go around.
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