I’ve seen a lot of different opinions about IR on this site, I’m just curious how IR is treated at MFs specifically. At places like BX, AUM / fee growth is starting to get treated as the core revenue driver (you see this in their earnings calls), and obviously IR plays the main role in that process. Curious to hear what folks think on this. Is IR becoming a front office role at these firms, and will it become a more desired role in the future?
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Technically speaking… since IR interacts with PE funds’ “clients” one could say IR is more front office than investment roles are… just saying
Currently at a MF and I feel we are treated as such. Among my peers at UMM/MF the general consensus is IR, especially the fundraising aspect, is “front office” and you are compensated very well, and depending on the firm, you can be a small haircut to investing cash comp, without the large carry component of course.
I think agree with the comment above. I think it’s always been a “front office role”. Currently an IR VP at an MF (focusing purely on LP relationships/ Capital raising). It’s become a widely growing role as competition/ AUM growth needs have expanded significantly over time.
On a high level, I typically work 50-60 hours/ week and almost never work weekends unless preparing for a significant LP meeting or conference (I did have to put in more time as an associate though). My base/ bonus as VP1 is $500k all in, however I also earn carry. Will I ever earn as much as the deal team? No… but the work/ life balance is incredible, I still make a great amount of money at 30 years old, and have strong long term incentive between my carry and co-invest (as both of those grow and materialize over time, I’ll earn ~$1M all in). Most importantly, I have time for almost anything I want to do in my life and take 2-3 vacations/ year.
It’s a great career path, very rewarding, and happy to answer any questions.
How would you compare working in IR in PE vs at a public company?
Almost no relation. I've done both. IR at a public company involves P&L work, public reporting and calls, and non-deal-roadshows. You're selling the company to public mkt investors - both retail and instos.
PE IR is about hunting down LPs and building long term relationships, ideally w/ larger LPs.
Dude this sounds like the perfect career it’s crazy how it’s barely talked about. Do you have any insight on pursuing product management roles versus sales in terms of nature of the work, comp, and career trajectory?
I agree with guestfinance826 completely. IR is anything but glamorized on this app and I think it’s the funniest thing especially considering how great WLB and comp are.
I started as an IR analyst at the MF I’m currently at, supporting a VP and MD raising Capital from institutions on the west coast (although I sat in NYC). Back then, we didn’t earn nearly as much as Analysts make now (shows the importance and emphasis on IR moving forward). I made ~$125k all in as a college grad about 7 years ago. Today, my analysts can make anywhere from $175-225k depending on the year.
Unfortunately, I don’t have too much insight on product management since I purely work in sales as I just don’t find product management as interesting. Their base salaries match ours, however their bonuses typically fall much lower than ours - especially on good years. Their WLB also isn’t as good as ours and they can be stuck with weekend work depending on the fundraise cycle. Lastly, far fewer of them earn carry to my knowledge. Their partners who sit at the top of our team (sales) earn as much as $3-5M/ year all in. Is it deal team numbers? No… but is it still incredible comp for being able to never miss out on any life event, absolutely.
'Life is pain, highness. Anyone who says differently is selling something.'
It sounds too good to be true because it is. Maybe some people out there have high paying cushy jobs. I worked my ass off at a MF for $100k per year at 80+ hours a week in IR. More below.
I can second this. IR is not glamorized on a forum like WSO and is pretty much shit on because it’s not “deal work” or “world crushing” but the WLB is incredible and if you care about “prestige”, you absolutely still garner respect. Like above, I have time for friends, family, hobbies, anything I want to do. It can be an incredibly rewarding and cushy role especially at the public alts because AUM growth is becoming increasingly prioritized. Rockstar IR professionals make mid 7 figures.
I don't think anybody "respects" IR or sees it as prestigious. It's a cushy quasi-FO/high finance seat like corpdev at a zombie company that's number 4xx on the Fortune 500 and the role can be done by any 2.5 GPA state school sorority star with a marketing or communications background. There's no realistic need for the Deerfield/Andover/Exeter/Eton/Westminster -> WHYP -> CVP/PJT/LAZ -> BX/KKR/APO -> HSW -> Tiger Global/Coatue/Lone Pine/Viking/Maverick pedigree that investing/alpha-generating/risk-taking roles need. Maybe your value-add is in AUM fees generating, but that doesn't require brains.
Are you referring to PE IR or corporate IR?
You truly are low caliber talent if this is how you think
IR is not cushy in my experience at all. I'll detail in the main thread
Smoke Frog's retarded son
Pretty sure these people have more real world smarts than you because they’re making similar money, but didn’t waste their high school weekends doing pointless stuff to spruce up a resume that doesn’t matter when you die. They probably have a more positive attitude in life too ;)
This is such an insanely stupid post. Don't feel compelled to opine on things you have absolutely 0 knowledge of, bud.
What did your career path look like?
Started in top BB IB, hated the hours, felt I was missing out on life. Recruited for PE, lucky to receive MM and UMM offers but decided on IR, got in through a HH. Took a lot of thinking to make this decision. Don’t be mistaken, it’s not investing and does not offer a path to investing, but I truly enjoy the work. I get to speak with people, still learn about the market and different strategies, and I get paid accordingly, and arguably more on a per capita basis in terms of hours worked. I wouldn’t go back and do things differently if I had another chance to.
Do you mean your comp will eventually materialize into 1M/year given your co-invest and carry? If so, what age do you expect that to happen?
can you pm me please? at an UMM on the investing side and looking to switch
interesting because the IR people I know have pretty bad hours too. Pay seems to be really good at the senior levels, but if they don't own any book, then they slog too, only on even more boring shit.
are your other friends in IR having the same deal? Also, has it been this way for years? Obviously in the last 1+ years, good IR folks have been in high demand
I'd like to connect. Please DM, as you're anonymous.
Are your LPs institutional clients as well as HNW individuals? How valuable is the network you are creating on the job? Also do you recruit associates from IB analyst classes or IB associates as well?
I thought IR was always front office-ish in terms of comp? Seems to be a popular "chiller" exit opp for high financiers similar to the likes of corpdev.
One thing that always stood out to me, in our training workshop as a first year associate we were discussing business models, and one of our MDs asked what the private equity business model was. We all went around and said investing, and he said no, it's raising money. Investing and generating high returns brings people back to the money raising table. The GP gets its profit from fees, and whatever carry is left as house carry. Was an interesting way of reframing it
Agreed you need to be a great fundraiser (sales) across all investment classes, but tough to argue it's not evaluating strong investment opportunities and finding a way to restructure it's inherent value.
To me, the purpose behind the "front office" concept in career discussions is to separate between those who are doing the core work that the firm is known for, and those who are doing behind-the-scenes support work. So I think IR will never be front office.
That's not to say anything about money. I'm sure there are already good IR people making considerably more than the average front office person at their firm. Related: I recently met a guy who has been IT head at a few hedge funds. Judging by his crazy apartment and exclusive club memberships (not talking Soho House here . . more like playing golf with Bill Gates), I'm confident he's doing at least as well as the average senior-ish front office person. But I don't think it would be helpful in career talks to refer to that person as front office.
My brother in Christ… you can’t put IT and IR are in the same bucket. Simple test - what happens if IT underperforms vs what happens if IR underperforms? Which has a bigger impact on the organization? This is PE in a nutshell… raise money, grow money, return money. You can’t just shorten it to grow money without completely breaking the PE business model. It’s definitely core…
I’ll try to circle back with more fulsome thoughts for this thread but I haven’t seen anyone raise the point that truly LP facing roles within GPs are a tiny % of headcount. Sure their mid level support can be more mid-office type of work but the real hunters are definitely front office. Think about how much time your senior investment team partners spend pitching to LPs / potential LPs…. Would they really be allocating ~25%+ of their time to something that’s not core to the business?
Agree, it's not the same thing.
But for similar reasons of why you wouldn't put IR and IT in the same bucket, I wouldn't put IR in the same bucket as an investing role. I'm not saying IR is any less important. To your point, it can be equally important or even more so.
But I think the finance career advice world invented the "front office" concept for exactly this purpose. People were constantly getting confused by roles that aren't the traditional core job function.
IR IMO is a "front office ish" role. At the end of the day even if you want to call it FO, it is a "1B" role to the "1A" that is investing - PE firms can easily exist w/o IR, but not w/o investment professionals.
Lmao - do you think it’s easier to find a replacement for somebody that can model or someone with relationships with big pockets? We all underwrite to more or less the same returns, using the same toolkit, using the same 3P DD providers resulting in typically a tight band of sponsor bids… winner is usually <10% higher on EV and at least in my experience when I’ve had intel on other bidders that’s delta largely driven by exit multiples.
Maybe I’m too pro-IR but yikes when I walk through midtown I see 100s of dudes in vests that have a similar gait. I think it’d be relatively harder to find someone I’d trust to raise money vs. someone to stick under my IC to build their 300th LBO / Memo where my IC has the ultimate decision making power.
Like my comment above, IR immediately catches flak for not being “conventionally” front office, whatever that means is always up for discussion with many different viewpoints. Let me offer a few. First, I might argue the important of IR is almost that of the investment team, especially at the public alts. I am speaking IR specifically the fundraising aspect, not as much the reporting part/other parts of IR. Now maybe that’s too crazy for some on here to imagine because of such an emphasis of prestige on this forum. But it is comical to liken IR to a back office and middle office role as the very nature of the job is client facing and selling clients on your firm and different products. Second, front office is often describe as “revenue generating”, well, in that case, funds raised do in fact generate fee revenue and, like I said before, are becoming a major performance driver at the public alts. Just my two cents.
In fairness you are comparing an associate / senior associate / VP level person (investment side) to someone at the MD / Partner level (IR side). I generally agree with you (I started my career on the fundraising side of the house at a firm that is fundraising first, investment second) but its not like a VP in IR owns the Calpers or CDPQ or PIF relationship just like an investment VP tends to not be the one sourcing off-market deals / be the one back-channeling other firms.
There are definitely partner / MD level IR people who can drop in and add 10-30% to a fundraise because of their relationships, just like there are partner / MD level investment professionals who can bring 1-2 semi - proprietary deals in across the life of a fund. These specific partner / MD level IR people are more valuable to the firm vs. a principal / VP level investment professional.
The way I think about it is:
- A good investment team can compensate for a bad / non-existent IR team.
- A good IR team however cannot compensate for a bad investment team. They can salvage a middling investment team or salvage one bad fund but not a bad investment team. EDIT (Bad investment team meaning multiple fourth quartile funds)
I mean do I think it's more critical to have a good head of IR or good investment partner? I'm going to go w/ the partner. You can be the best IR person in the world, doesn't matter if your investment partners aren't up to par. But you can have subpar IR people and raise a fund. I mean many funds don't even have dedicated IR people.
And to be clear I am in a primarily LP seat now, this isn't me working at some buyout fund thinking what we do is mankind's saving grace.
This
Ah yes, because your average JAMMBO is going to raise funds just because they set up a website with a team page. I’m sure LPs will be flocking to give money. Or maybe they’ll take out an ad in the WSJ: give us money please!
Oh yes, if you don't have an IR team I forgot the only way to raise money is to sit back and have people find you through your website.
If you have consistent bottom quartile returns, you can have an incredible IR team and it's pointless. You can have a bottom quartile IR team and successfully raise funds if the returns are there.
Ask any LP who'd they'd rather shoot - every single one of their GPs' heads of IR, or one of the main partners for each of the funds they're invested in. Answer is obvious, and this is coming from an LP.
IR has always been an extremely important function to firms and front office. You can see that in how certain firms also split up day to day for founders as well. For example its pretty common knowledge that Howard Marks is the outward facing / IR founder at Oaktree while Bruce Karsh is the investment savant behind the operation.
I would say though that alot of the fee / AuM focus (which tbh has always been a focus for firms) isn't just pure fundraising teams getting better, its also strategy related. A very good IR professional at a big platform has a multi-part job 1.fundraising for their employers existing funds with their relationships but also 2. communicating to the firm and being an internal champion to what their relationships are seeking from an investment type (PE vs. credit vs. infra), structure / jurisdiction (Luxembourg funds vs. Delaware LPs), duration (fund life / length), and customizability.
The one point to make though on whether IR is as important vs. investment teams though is that you can outsource IR (placement agents) but you typically can't outsource investments. There are of course fund types where they have sub-advisors but this is not typical in private equity / credit / infra beyond BDCs / fundraising in retail RIA channels.
It’s the best role ever
Holy novels. Some good content in here but my god is that a lot of long posts.
Theres a distinct difference for types of IR.
On one hand IR could be the RFP, Due dliligence and financial reports people responsible for updates and occasional questions to lps/clients.
On the other hand you have IR that is the purley sales/relationship mgmt responsible for retention and fundraising. These can be your big swinging dicks (or miserable sufferers on a losing streak). Even if you’re not the “investor type” if you’re responsible for $1B of a $2B fund raised as an example…well youre gonna be comped well and treated as a rainmaker.
Sometimes the position can be both of the above combined.
Carry is key. If you are getting that then you matter some, if not, you matter less.
Super healthy to base your importance off having carry or not lol, don’t you have a finance test to study for?
It’s a succinct answer to the question around importance in the firm. Do you disagree? No need to get emotional.
People can call it whatever they want, but IR isn't on the deal team and that's what matters ultimately
I agree. Candidly shocked with the sentiments here. Don't get me wrong - great role and obviously highly integral to a fund, but investment team runs the show. The ability to raise future funds is effectively all reliant on the investment team's ability to generate returns and deliver on a coherent vision/thesis.
Plainly, IR raises the '1x' of funds but the investment team needs to turn that into a 2 or 3x, and that's effectively all that matters to LPs with respect to future fundraising. If a fund shutters (because they couldn't fundraise), it's not because the IR team didn't have the right gravitas or connections; it's because the investment team failed to generate compelling returns to attract capital. When you think about the 'face' of any PE firms, it's the investment team partners that get mentioned, not the Head of IR, because the investment team is taking the risk on each investment (to drive outsized returns) and compensated/recognized accordingly.
(I mean zero disrespect to IR and believe they hold an incredibly important role within a firm. Simply stating my view on the pecking order and relative positioning of roles).
Unfortunately this is indeed the prevailing attitude- that the deal team runs the show. It’s arrogant and wrongheaded. I have done both deal and IR jobs. Dealmaking is more intellectually stimulating, respected, and financially rewarded. Neither job is actually harder than the other categorically. They are just different.
But I can tell you this arrogant attitude from the deal side is shifting quickly as the market gets more competitive and crowded. Also these days If a junior/mid level deal professional leaves, they are easily replaced by an army of candidates from ibanks.
In my experience IR is not cushy I have worked in IR at a multi-billion-dollar manager (a Chinese MF), and at emerging managers. I'm not saying some IR folks don't have cushy jobs - just in my experience this was not at all the case. Mind you, I'm a former ibanker and REPE deal professional, so I am able to put the work in the context of those workloads as well. I found REPE to be cushier than PE IR. At least in REPE we weren't always doing a transaction. In PE IR there was always a lot of work to do. There's always fundraising, reporting, etc.
In all cases I had to manage a lot of the process myself - including the prep process and the sales process.
For the Chinese MF, the work included:
That's an 80-100 a week job, mininmum 6 days a week of 9-12mn/2am work. I was working most weekends, with 3-5 hours on each weekend day. I eventually got totally crushed and burned out after 3 years. Not complaining -just saying this is not my definition of 'cushy'. Maybe things would have been better in the US, but in China, this was the pace of life.
I would say that IR is definitely front-office in that IR professionals (at least well-rounded ones) are meeting with LPs and are the face of the firm. Perhaps some MFs split the function and have the back-office functions (meeting coordination, materials prep, reporting) done by separate teams. But in my case the role has always been a front-office sales role. Even the materials (pitchbooks and supporting materilas) that I had to pull together myself I'd say are front-office work, as they went towards the sales process.
I'm going to DM you USA-based IR people because your job sounds much better than mine in terms of both workload and comp. Yes, please, I'd like a $500k+ job where I actually have WLB. Because I've never earned that much nor had such a balance.
IR is like the new sales
I challenge anyone who believes IR is anything other than front office to go out and try to raise a fund. It's every bit as much front office as deal work. It's more meetings and pitching than the deal side, and it's absolutely core to the firm. The founders of most PE and VC funds are spending 80% or more of their own time these days fundraising, rather than managing or deal-making. David Rubenstein is famous for basically living on a private jet, going from city to city to pitch the Carlyle suite of funds to instos and SWFs.
I’m older than most here and have had a few roles in my career (LP and PM at HF amongst others but never IR). The above quoted post and others made by this poster here should be pinned somewhere. +SB
Let’s think very simply about a business. You have revenues and costs. We all have an idea as to costs so let’s talk revenue. Revenues generally come from management fees and carry. Guess which revenue stream (esp if capital is locked up like in PE) is more stable and predictable? At a certain size and scale of a firm it makes carry matter much less to the true business owners as others have mentioned.
There is a reason Rubenstein (who I’ve met and spoken to personally) is an equal partner at Carlyle. HE is incredibly engaged, great at his job and a genius (Google his interview a few years back on why he decided to bring in retired politicians to the firm)…
As an LP I get pitched all day by everyone. I see everything. This is neither good nor bad, it’s just my job. This also means I turn down 99 percent of stuff (how the numbers work) and am literally axed to say no (similar to a PE investor being pitched deals or hfs getting pitched stocks). Most product sold across asset classes is very similar as are the pitches/slides/branding.
IR knows this.
But despite having great degrees, being better looking and actually socially aware and sometimes being on the road for weeks/months on end, IR has to take rejection every day and every way and frankly be sha* upon by everyone. It’s not for the faint of heart. You’ve been told you are the best your whole life and now a bunch of your former college classmates/peers or some idiot at a pension or endowment who knows nothing is telling you no within five minutes of meeting you on the last leg of your 15 city roadshow. Not easy.
I cannot tell you how many times I have met HF PMs/CIOs or PE Managing Partners and seen them simply drained and discouraged after experiencing their first LP road show, even when they have raised some money. Despite that, some never see the light and churn through marketers. It’s puzzling and clearly the MFs get the game (it’s why they are MFs).
In short, decent IR is good. Good IR is priceless. They are revenue generators, time savers and are the ones who can bring real stability to a firm and keep you actually employed when times get tough. Treasure them.
As an IR VP, I couldn’t be any more appreciative of this post. Thank you.
I think it already is FO, and in ~5 years it will be "mainstream" FO among the WSO crowd. The partners on the investment teams work closely with the IR teams during fundraising (which is basically year-round at this point lol), so no one internally looks at them as back-office. It's low key become a more important function than the investment teams.
Think of it logically:
A PE firms' business model is getting paid ~2% management fee and ~20% carry. The $ generated from the carry portion has been shrinking over the last few decades as returns have gotten skinnier. Therefore, the game has changed from generating high returns to raising bigger funds since fund sizes have only gotten bigger every year.
I think one interesting data point is to look at how tech has progressed. Starting out, it was only product that mattered. But while product teams are still very important, sales and marketing had become equally as important to break into new markets like governments.
Does it matter..?
I think IR people (particularly at the partner level) deserve to get paid more than they currently do. I know for a fact at my firm that the IR / fundraising partners get a carry stake equivalent to that of a junior VP on the corp PE team, when I’d argue they make a much bigger difference to the firm. That being said, they wouldn’t have a job in the first place if it weren’t for the investment track record of our senior partners.
Saw a comment above talking about HF partners and I largely agree. The ones that made it big (certain SMs in particular) figured out both the investment and the fundraising sides of the business early on and are able to capitalize on that before the tides inevitably turn every cycle.
What kind of fund are you at? MF?
Yep MF
The last spot I worked at gave IR associates up to partner the same carry on any deal they brought in. Lower base pay and usually no bonuses but no comission cap or cap on carry when the deal comes to fruition.
People seem to miss the point that someone has to sell the ferraris and you want people to sell as many as possible and to get that you gotta incentivize them. Not to mention the hand holding and entertaining of clients as a perk even on sundays. You’re essentially the face of the firm and deals.
I'm at a boutique LO (growthy equities) and our directors in IR make 1mn with the head making a few multiples of that... such a cushy gig– they aren't in the office half the time and essentially dumb-down our PM's commentary to prospects– seems like the life to me. Half the time they're remote and always doing something with their kids
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