Evaluating offer to join $5-10bn SM straight out of banking.

I have an opportunity to join a $5-10bn SM right after my banking stint. I currently have a signed MF PE offer from KKR/BX/Apollo. However, I was never planning to stay in PE beyond 2-3 years and public markets were always my end goal. I am excited about the fund I have an offer at. It has great returns, is a growing fund, great culture, strong pedigree and strong professionals to learn from. There is high AUM/IP (>$1bn) and the PM shares the economics. The overall strategy and sector focus are also in line with my goals. It is a dream fund for me.
However, I don't know if I have what it takes for the HF world. I interned at multiple funds in college and was exceptional at my job for a student, but not nearly as competent as the senior analysts at the funds I interned at, albeit they had decade(s) of experience. I am afraid of failing out, and what will happen to me if I fail out. I will be an unemployed 26 year old with no transferrable skills besides a few-year-old banking stint. I still feel like just a kid.
On the other hand, if I stick it out in MF PE I have a couple more years of brand name under my belt, I can go back to PE after failing at publics much easier. I receive 2-3 more years to refine my investing acumen. And I believe I have the right pedigree to land a tippy top job like D1, Dragoneer, or TGM after MF PE. However, this is the view looking through rose-tinted goggles. I know MF PE is just banking 2.0. I know PE just increases my chance of burnout and postpones the day when I take on real risk. I don't think these tippy top hedge funds are anything special either and I think being at a growing fund would be better than one 35% below the high water mark.

I know what the right decision is, but I just don't know what to do.

Most Helpful

You won’t feel more prepared after 2 years of PE, everyone starts roughly at zero on the public side. Either you have the guts to do it or you don’t, candidly this amount of self-doubt is not a great signal to yourself that this job is actually a good fit so that’s a bigger decision to consider. If you don’t want to bet on yourself PE is the right move

But on unemployment, it’d be no problem. A junior analyst can find a new home pretty quickly if they came from a reputable firm. I work at a pod and I’ve seen friends repod pretty seamlessly, I’m not too concerned about that personally


Thats what I was thinking lol. Above firms would probably be a downgrade given high watermark issues and track record of poor risk management


Just take the HF job.

Don't fool yourself, when a HF hires a 24 year old, the expectations are low. They are probably fully expecting having to train you, rather than expecting you to find their next best idea in your first two years.

You generally bomb out of a HF career in your 30s, but almost never in your 20s. Take the HF offer, put your head down and learn everything you can, and you will do fine.


Assuming someone joins and bombs out in their 30s, what would they have to fall back onto once they leave?


I mean they’ll have to 1) renege, 2) have to give up a career that’s pretty attractive risk adjusted.


Look man if you are not comfortable taking this risk, then I hate to break it to you but public markets are not for you. Any edge you come up with in trading is going to be far thinner than this decision which is as close to a slam dunk as I've ever seen. It seems rather obvious that I even need to say this: if you want to do public markets, then get public markets investments experience. Don't do something tangential like PE in order to build a line on your resume no one will care about in 4 years anyway.

As someone who was canned from a MMHF pod early on in his career: it's not a big deal to fail. no one blames the junior analyst; you can easily land another job; and the experience you gain far outwieghs the churn you might experience.


Don't listen to these people hating lol, it's definitely a big decision to make especially when reneging is involved so it's very normal to be unsure about it. The reality is it doesn't matter that much to your career if you renege, and if you're a 26 year old with buyside experience you're extremely employable and will get a shot at another hedge fund, long-only, or worst case can go to biz school or do something in corporate. It sounds like a great blue chip offer where you'll get a ton of experience. You can't bank on getting some sick hedge fund job post private equity, the world could be totally different at that point. Plus, if you want to be in public markets and don't like the idea of PE it's going to suck and be a slog for a couple of years, and broadly the outlook for PE isn't really that great. If you want to work at a hedge fund take the plunge, you're not going to get that much relevant experience in PE and you might as well make the move ASAP if it's available, especially for a job like that. 


Think it depends on a lot of stuff, first and foremost your preference for either LT. Imagine you either have a good pulse at what the life and day to day looks like for PE and the career path there, but would encourage you to continue to try and learn about the HF side. They are dramatically different roles and I think people tend to underestimate the importance of actually enjoying (or at least tolerating) what you're doing, and HF vs. PE is different enough to warrant asking what your preference is on the general work itself.

Think secondly, best way to think about it and one of the above commenters mentioned this but you're pretty young. You can afford to take more sizable career risks at this point in time and not sacrifice completely washing out of a career path if it isn't exactly what you want to do. I'd describe this as "peak tolerance for career risk," meaning you aren't getting younger so at the current juncture you quite literally are able to take the most amount of career risk you'll ever be able to. Hope that's food for thought or at the very least provides some reassurance that there might not necessarily be a wrong answer.

Last thing really is that they're different and require different personalities or skillsets. Tons of guys in HF don't make it because they can't stomach the risk or don't enjoy the tracking of a PNL/scorecard or the constant evaluation and re-evaluation. On another post somewhere someone had mentioned that in PE you basically can "fake it" for longer, at a fairly junior level you're not responsible for driving deals, you aren't really worried about returns and your ability to succeed can be traced more to your ability to get the job done and people liking you. In HFs largely speaking you can be quite unpleasant to work with but it can be entirely offset by your ability to make money (I'm sorta exaggerating to make the point). I'd just add that in the HF seat you are likely going to be put into a decision-making, risk-taking position much much earlier than you'd ever be on the PE side. It is not for the feint of heart and your ability to make investment decisions and recommendations will essentially dictate your longevity and success. Some people thrive in this sort of environment, others don't; there's no right answer and it's different for everyone so kudos to you for asking the questions early.


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