Hi guys:
I’m currently a second year associate at a PE firm, and I’d love to hear your thoughts on my situation.
My current firm has a decent reputation, but not growing very fast due to some over hiring and fundraising issues (general reputation is still ok as the fundraising issue is recent). More importantly, I don’t think I’m a good cultural fit at my job. Specifically:
1) Intellectual honesty - I’ve seen once or twice here where people represent things as better/different than they are at IC to fit a particular goal ( for example, wanting to sell an asset for political reasons and then not wanting to, losing a deal because people don’t want to partner with us but addressing it as if it’s a bad company economically). While politics exist at every firm, I felt that what I saw reduced my ability to respect the firm and generally brought down my opinion of the people and place.
2) More focused on non-investing activities. With the lack of AUM growth, people are more jousting for political power by doing things the head guy likes, including making specific political comments that he likes, or focus
on trends of the day that he might be paying attention to.
3) lack of growth - this means lack of deal opportunities for people who are new
4) not the most open minded. In approaching investment ideas, I found the team to be to very not independent thinking and just parroting other people’s playbook
5) internally focused competition - gun is focused on others internally due to lack of ability to grow the pie
The pro of working here is mostly - a relatively “stable” job in this environment, pay is decently good, want to have a resume that’s not too jumpy. That being said, being away during Labor Day made me realize how happy I am without some elements of my firm’s culture. I don’t dislike my job, but it’s the environment...esp. the intellectual dishonesty, majority focus on pandering/internal politics rather than investing, and lack of investment thoughtfulness.
For those of you who’ve worked in this industry for a long time - how important is cultural fit? I’d consider myself a B+ candidate (not the best pedigree, non-diverse); would you consider switching of you are in my shoes? I’d be aiming for a senior associate role given my timeline (not looking for an mba as I already have a master). Given what I said above, do you think I’m just complaining about things that exist in all PE jobs, or I could find something where the cultural fit is better?
Thank you
By second year associate I assume you're on a summer cycle and just started your second year. I think you should stick it out through at least your second year for the sake of continuity and never having to deal with the assumption by others that you were unable to make it through the customary PE associate role for whatever reason. After that, you can feel free to pursue other opportunities.
That said, here are some thoughts:
1) The topic of intellectual honesty is something I struggled with as a junior employee and still something I'm not 100% on board with as a senior one. The concept of withholding certain facts from the investment committee or "positioning" an asset in a questionable light is unfortunately very common (and I've worked at multiple PE firms and spoken to numerous friends at others). The degree to which this occurs varies by firm, but ultimately nearly every firm has it. You're going to have to get comfortable with this, on some level, as you progress in your career. Sorry I don't have a better solution for you here.
2) This feels like a long term issue rather than a short term one. Unless you're looking at staying at the firm for the entirety of your career, I wouldn't worry about this too much. Your focus should be on learning as much as you can, whether it is deal related, market related, process related, or just intangible skills.
3) Cannot really comment here. Are you not getting any deal activity whatsoever? Seems odd or perhaps COVID related?
4) This isn't uncommon in PE. People like doing what "works" as best evidenced by what has worked in the past. I think it is an exception to find a firm that truly embraces a unique approach to investment ideas and analysis. Most are confined to their investment mandate and get uncomfortable the further they go away from that mandate as it can have consequences when fundraising.
5) This is just negative. Agree, not a great dynamic.
Hope this helps.
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