Good tiger cub economics vs PE partner track
Was recently pitched PE partner track but also interested in public mkts. Wanted to get everyone's thoughts on career at Viking / LP / TGM / Pershing etc.
It's something I think about a lot and here are my 2 cents:If you're in PE thinking about it, ignore the HWM thing. None of these funds will pay you like a partner for the first 3 years. You'll still have a shot making maybe $1-2mm in first 3 years but that's covered by mgmt fees so don't worry about carry until you're a semi sr analyst. And I'm talking about literally 5-7 funds so don't come @ me. They'll be above HWM by the time you start to get paid real $
you'll get paid quicker and arguably more earlier than in PE. Won't start getting big carry checks in PE until old man vs HF can be sr analyst semi partner at age 30 making mid 7 figures (again, I'm talking about 5-7 firms, you know the names)
on the other hand there is def an element of personal investment style / flavor and where you see yourself.
Please push back on these or validate - it's something I think about a lot and I have a few important decisions to make soon. Thanks
It’s utterly unrealistic to think you get back to HWM. If a fund is down 50% it takes many 10% CAGRs to double back.
Also what does it mean when you say you were “pitched partner track” at PE? Isn’t that just being in self-denial about saying got a PE associate offer and prepared to sacrifice my soul for the next decade in hopes of receiving a principal promotion? Lol
I'll say this much TGM is not fund in question but of the list, they’re the only one actually down 50. And if down 50, it takes 5 years 15 pct to get back to basis (yes that's hard but again not important bc it's not TGM). But down 20-25? Easily back to HWM in 3 years 10 pct, which is ballpark here (-10 to -25).
Also my boss pitched it to me and had a long convo about career / partner track and comp
Ignore title. I don't think you're wrong about any of the comments so far, but I don't think you're being realistic, either.
You shouldn't discount a few things. First, while a down market does theoretically present an opportunity to be investing in the public markets once economic expansion begins again, you (1) should not time the market, and (2) have a significant hurdle to overcome, namely that you need multiple consecutive years of double digit growth before the fund even reaches its high water mark again. In other words... why would you "ignore the HWM thing"?
Second, consider that you will be joining during a state of panic. There is something to be said about weathering a down market in PE where you can hide from LPs behind internal valuations for a while. If you really are an Analyst 2, then you have a few of the extremely formative years left in your career before people expect you to really, truly be an independent adult that just gets things done on their own with minimal oversight of an individual's own methodology of value creation. These are absolutely crucial years and you should consider whether working in an environment of panic in an underwater public fund is how you want to spend those critical years.
Third, you should really think about which strategy you want to join. You can't compare Viking / LP / TGM / Pershing.
These funds are all great and will compensate you well on management fees alone, as you mentioned, but that still means they'll just be giving you base and bonus, anywhere from $250k-$400k, so I wouldn't base your decision on that when you can get the same in PE. I also don't think the $2mm compensation is really a relevant upper bound. Just because you did two hotshot years in PE does not mean you will clip the same as someone with 2+2 that you often read about on these forums. On top of that, you haven't never been a public investor yet so you should discount your expectations. Sure, you could be an outlier and my compensation estimate is wrong based on a great offer you have, but if I'm right, I'm just saying, they take care of you just fine in PE on base and bonus over the same time period.
I'm not saying don't take the job, but it doesn't sound like you're doing it for the right reasons. You're trying to think through externality merits of the career path when you should really answer the question of, "do I want to analyze stocks all day for the next decade or so?" and "Is this a great place to jumpstart my career in terms of culture, apprenticeship, and capital deployment opportunities". Those questions should be front and center. Because at the end of the day, PE or HF, you will make more money than fucking God has relative to the average American for the next decade, so stop worrying so much about money.
If you decide to pass for now, just realize that this funds will always be there and likely hiring, or they won't, in which case you've dodged a bullet anyway. When I was young, I used to stress that these job offers were once in a lifetime offers. After a few years, you start to realize that opportunities pop up everywhere and the best thing you can do is just pour time and effort into the best learning opportunities and the things that you enjoy doing and you'll get where you need to be. Maybe this is that, maybe not, but just think about it.
Truly top SMs (the ones you mentioned on the list) >= PE >>>>>>>>>>>>> other HFs
I honestly think that privates and publics are just so different that you should be more concerned with what is a better fit for you.
If you are optimizing for comp, then instead of asking ‘how does comp scale at x vs y?’, you should be asking ‘where do I think my comp is more likely to scale, x or y?’. The latter has a far greater impact on your future earnings.
I would add that if you're in PE, it's easier to switch to HF than the other way around. HF to PE is almost impossible at the >5YOE level. Also agree that fit is probably more important here.
I was in your shoes and incorrectly thought about it in a similar way.
My $.02: consider what you want in your role (non-monetary). Think through the downsides. Viking attrition is 25% a year. There is no “I will make $mm per year” there, but the upside is meaningful if you’re good/lucky. Lone Pine and Tiger are down 30-60%. At Pershing your role will have elements of banking and private equity- presentations, proxy battles are no joke. All SM funds had redemptions this year. 2-4 years of underperformance can kill a fund. Consider the investment style and people you’ll be working with, too.
And for the love of god, check your ego. I’m glad you had a nice review but don’t let it get to your head. You will be humbled, especially in public markets. Everyone at these funds was just like you- top of their class at Blackstone or Silver Lake or whatever.
I work at a big fund and make more than if I stayed in PE. I view it as fair compensation for the added career risk I took.
I think the misunderstanding for junior professionals stem from the fact of not having a clear view on the future if you join one of these funds. There's just not enough information on these places here to form a proper view on the upside case vs the downsides. Besides all of these places have separate ways of compensating employees as well. No need to give out probable bonus numbers or anything if you have a good year. Merely discussing how viking compensates vs how lone pine does it vs TGM vs PS would go a long way i think.Is comp based on your pnl, funds pnl or the alpha you generate?There's barely any discussion on those here. So people form their own views and make misguided decisions on their careers
There is a new thread on large SM vs MF PE every month… read what you can, leverage your network, and ask questions during the interview process.
Lol PS investment team is 10 ppl currently and maybe 25-30 ppl ever since inception. Doubt you’re going to find any concrete info on comp online. If you google a few young team members, their $5mm+ condos show up. Safe to say if you get to PS and stay (bill doesn’t fire you), you’ll do fine - unless your definition of success is 10 figures
Thank you for this — much appreciated. I was approaching it as “well Viking LP PS soroban whatever have permanent capital + will eventually get back to HWM”.
Have a few questions: Would you say you regret it (PE —> HF)? Is extra comp worth added career risk / stress from public mkts / comp more directly tied to personal performance? Also, can you provide a ballpark comp range?
What are some things you miss from PE? Would you choose a different HF if could do it all over again? Any funds that you think are great seats in particular?
Thanks!!!!
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No single manager has “permanent” capital. Top funds shut down all the time… see Melvin, Blue Ridge, SPO, Eton Park, as a few examples. Pershing AUM dropped 60-70% after underperforming in 2015-2018. Funds like Viking and Elliott are more institutionalized but have their own drawbacks.
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