A2A Seeking Career Advice

Borrowed format from another thread

Background:

  • 2 year A2A. Started at low BB (DB, WF, RBC), lateraled to EB as an associate 
  • Specialized in HC coverage in NY, strong background for HC coverage roles
  • Goal is to maximize earnings over 10 year horizon. Plan to exit from "high" finance around mid thirties for better wlb / family (obv caveat for the "perfect" job with good wlb, pay etc).
  • Historically have had a low career risk appetite (hence A2A), but actively looking to take risks and bet on myself while young

Current Situation:

  • Getting into 3rd year of IB, need to assess if PE is still viable / makes sense
  • Significant pay bump as banking Asso raises PE Asso opportunity cost 
  • Concerns about viability as a candidate in the eyes of HHs - recruited off-cycle and have more than a few failed processes
  • Not sure if MM PE makes sense given significant pay gap and MF PE especially for my coverage focus seems out of reach (not sure how true this is)  

Specific Concerns:

  1. Title concerns — banking associate title disadvantageous for PE associate recruiting? 
  2. Assessing whether MF PE is realistic, has anyone successfully recruited for an MF PE role as a 3rd year or even 4th year IB? If so, pls DM.
  3. Does MM PE make sense at this point? What criteria should I consider for MM funds (e.g. carry potential, internal VP promote track, HC expertise etc.)
  4. If transitioning, how to think about short-term discount to wages vs risk-adjusted likelihood of getting promoted into a carry earning role and actually realizing any of it
  5. What career exit outcomes would I give up staying in banking vs running an associate stint in PE (e.g. other investing roles, hedge funds etc.)

Request for Advice:

  • Seeking guidance on whether PE is worth pursuing for my situation
  • Want to understand long-term exit ramifications of just IB vs IB + PE background for other roles (e.g. VC, hedge funds, family office, startups etc.) 
 

Stronger brand name, deal flow for my sector and better pay (>100k increase)

 
Most Helpful

If the goal is maximizing earnings in the next 10 years, PE doesn’t make a ton of sense.

UMM/MF pay is comparable to slightly better than banking, but MM is probably a pay cut. On top of that, you’d probably be starting as an associate 1 at any reputable PE firm, so even if you’re an associate 1 or 2 by the time you start, you’re going sideways / down when you go to PE.

PE is really only worthwhile in the long run - there’s way more risk of not getting promoted (getting a VP seat is tough and can take 3+ years and another firm jump), whereas banking you can easily get to director in 10 years by grinding it out.

PE comp only outperforms meaningfully when you factor in carry. Let’s say things go well and you land a solid MMPE seat in the near term - cash comp is probably relatively equal. Let’s assume you get promoted to VP after 3 years (best case scenario) you’re still neck and neck with banking. You probably get some small carry $ but not all of it will vest by the time you leave. So all in you probably make around the same assuming everything goes well in PE.

The intangible here is what you actually want to do in 10 years and if PE experience will help you - it would in many roles but won’t in others. But all else equal, assuming you truly only care about money, id stay in banking

 

So there are really 3 factors 

  1. Extending the time horizon from 10 to 15/20 years (early 40s). Roughly earnings potential increases from LSD millions to HSD millions. 

  2. Having conviction in ability to perform, get promoted, secure carry and grind longer without burning out to realize it. Understand the role requires greater focus, more intelligence / better decision-making and as much work ethic as banking. For a high performing individual, definitely possible to progress to mid-level.  

  3. Exit opps is the main thing causing me to doubt the banking route. How difficult is it to transition to another investing role directly from IB vs an additional PE stint.  If I wanted to do growth, Family Office or PE specifically, would my background be looked down upon? Understand the skillsets of executing a deal vs sourcing / diligence / bidding are different but there should be heavy overlap no? 

My background is heavily verticalized within HC and specifically sponsor-focused sectors (RCM, HCIT, Family Pracitces etc.) and think over the next 3 years I'll have the track record and story to succeed in an investing role. The EB I lateraled to has a strong HC franchise and has real relationships with blue-chips in the space. I'm not sure if that changes the way I could recruit down the line as a VP in banking for example for a LMM HC fund in case I decide to make the jump later.Have I overestimated the importance of industry coverage vs role / skillset?

Chiefly I want to understand how true the "too old" sentiment is for young banking VPs for investing roles. 

 

Agree with the above, I'd also say that the best case scenario of MMPE described above assumes making vp in 3 years. Even at MM firms, a fair amount of the programs are still 2 years then go get MBA with the opportunity to come back thereafter. If the goal is work 10 years and "coast" after that, you'd ding yourself comp wise by the opportunity cost of not earning during MBA and paying tuition. I'd just stick it out in IB if 10 years is the goal. You can always lateral downstream and get similar pay but better WLB if you feel your current spot is unsustainable 

 

I've seen some banking associates make the jump to buyside, but do recognize it's rare and usually to MM funds. Agreed MFPE seems unlikely unless you hail mary a MM to MF lateral.

 

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