Happy new year all—that means it’s time for the annual existential crisis during that liminal period between the holidays and bonus payout.
Here is the basic fact pattern:
- I am a senior VP (not an actual title at my bank) at a top M&A bank, top bucket for the last-however-many years
- MBA from a program that vacillates among the top three ranks
- Have felt basically zero interest in or motivation to do my job for 12-18 months, after genuinely enjoying it as an associate
- This is the case despite excellent deal flow and having just done a transaction that is sort of the ‘pinnacle’ of M&A advisory
- There are a few qualitative reasons I have stuck around (the high-quality people I work with, travel, perceived prestige of career), but ultimately compensation is the primary factor. Being able to provide economic security for my family is extremely important, and I sense I would take a >50% cut to cash comp for basically any other role
Obviously, then, this post is about exit opportunities.
I am very tempted to reach out to some of the major buyside recruiters and start testing the market for corporate development roles with MM/UMM PE-backed companies.
I have of course read countless threads on WSO on similar topics (VP exits, CD roles, etc.) and so have just a few pointed questions for the group:
- For those who left IB at the VP level, do you regret it?
- If you explored leaving at this level and chose to stay, what persuaded you?
- What have people seen in the current hiring market for roles like corp dev at a PE portco? (Both in terms of availability of roles and compensation, specifically equity at this level)
- What later-career moves have people seen for mid/senior-level CD personnel? (E.g., Director of CD > some intermediate step > C-level? CFO of smaller firm after an exit? Etc.)
- Are the ‘chief of staff’ roles that became common a few years ago still prevalent? Seems like an interesting junior executive role/way of getting more operational exposure than CD (if you can put up with the executive assistant duties)
Thank you all very much in advance!
Bump
solution is to
1. move to a chiller group
2. stop trying to be top bucket all the time at the expense of burnout
hold on for the promotion to Director. you can be less hands on then and delegate mostly. and still get paid well.
My work/life balance is actually great—my interest in seeing what else is out there mostly stems from a few frustrations with/lack of interest in the longer-term job (MD level).
What are your hours like currently? Curious what people consider great.
To second this...getting burnt out can be about a lot more than just hours at a senior level, and even if he's only working 50-60 hours, it's not like he isn't still constantly checking on things. If a client calls at 11pm, you still pick up the phone. There's also a sense after a time that the hamster wheel of getting fired up for new deals just wears on you. There are deal junky types that always get fired up, but that is not the norm, even at senior levels.
I don't have much to add but am in the same boat and also strongly considering what to do next.... Track to Director even seems like a long few years
Exits to corp dev not appealing because of the comp dip and stagnation and buyside seems so far out of reach
How is buyside out of reach as a second year analyst? Half of you would do way better off to find a high-potential PE fund and get in early versus banking on making it past a 2-year associate stint at a big fund anyway
I’m in the same boat… don’t love IB but I’m getting into a groove with the work and the pay is nice. No shot I’m leaving to corp dev with the pay cut and career stagnation, and buyside seems out of reach. There has to be something else out there…
Bump—anyone with more perspective or experience than a junior associate (respectfully) have any insights on the topic?
I never viewed IB as my longterm career. I left as a Sr VP to found a company. I'm a 4th generation entrepreneur and wanted to build a tangible product. I started a health tech company in 2012 after nearly a decade in IB. I ran it as CEO for 10 years, raised $65M in VC, got it to around 250 employees and $30M in ARR. I was burnt out and decided to leave so we recruited a new CEO. The company is profitable now and still growing. I took some time off and joined as an operating partner at a new-ish PE fund that a college friend started. I'm not sure that helps, but it was my path. I always wanted to run a "real" business so exiting to entrepreneurship was obvious for me. After 10 years running a company I realized that managing a ton of employees sucks so I'm back to finance, albeit with some more perspective.
Was managing employees the main issue with being an entrepreneur and driving your burnout? Do you think you could have stayed in finance knowing what you know now (although I understand building a business is a very different and rewarding life experience so your decision then likely would be the same)?
Also, I assume your stake in the business is worth a material amout now
corp dev/M&A at a pe portco is not the place to go...no matter how much ib experience you have it pigeonholes you
First guy to get shitcanned when teh portco gets monetized for ass on the dollar
I don't fully agree. I have several friends who went PE associate -> corp dev at portco -> CFO -> CEO, exit. Rinse and repeat. The next round you go straight to CEO, plus the PE network knows you managed through some things. People talk. I have one friend who went this route and had to take a portco through bankruptcy. He was bonused out, did fine (>$2M on exit) and is now in hot demand as a turnaround guy for PE funds. He's 44.
Chose to stay. Similar to you, fantastic WLB, top bucket, great comp, love my team but two years ago had a period of zero motivation.
Had a good think about why I wanted to exit and it really came down to my boredom with "process". Every transaction might have unique quirks and interesting aspects but the nuts and bolts of execution outside of strategy / negotiation get very cookie cutter and that was grinding me down. I do more coverage now and bit more hands off on day to day execution so am much happier.
I did explore moving to industry, with a corp dev seat at a sponsor portco or chief of staff role my preferred outcomes. Was less focused on comp (figured I'd get paid either way) and more on what I would find interesting.
Corp dev role at portco was my #1 pick but the ones I went down the path on felt very banking 2.0. There was either a strategy group, or C-suite / sponsor ran strategy so really were execution roles. Great gigs if you pick the right one IMO. Just didn't want to keep doing execution with integration now thrown in.
The chief of staff roles were interesting but very hit or miss. I tried to feel out what expectations were and a lot of the time they were nebulous at best. "Be the CEO's right hand, do special projects" type shit, avoided those like the plague. The best one I came across, responsibilities were very well defined with some admin work and a plan to place into a business unit in 2-3 years. Thought that was cool.
Just my 2 cents. If you end up in industry, a lot of advice I got was to try and pivot into the business / ops side or into more of a strategic CFO role once you have your legs. Having operator chops on top of a banking background apparently has a lot of value.
Very helpful, appreciate it
Are Port Co. M&A roles reliable for long-term tenure though? My fear with that path is that it's just a 2-4 year mission (PE Hold term) and then you end up with a ton of unvested stock in some public or private company you may or may not have any conviction in and don't necessarily want to work for (or are even given an employment offer to work for).
I have a surprisingly similar background (except A2A) going through that exact same period as a sr VP (where I decided to try another bank because I wasn’t sure whether it was my bank or me) and as a sr Director (where I thought I didn’t like banking?m, but turned out it was me).
In both cases, I ended up staying in banking but changing firms. 10+ years later, I am very happy with the choice. The PE jobs on offer were tier 2 and I think I’d only be happy at an Apollo / Carlyle / H&F etc since those are my clients vs the smaller folks, and the corp dev jobs were on paper interesting but in retrospect none would be have worked. In banking, I ended up toughing out the rough years and now run a group quite happily.
I would note a few things
- sometimes when you’re a top performer somewhere and burned out (I remember being cooked), a change of scenery is what you want. you have all your skills and can reinvent yourself
- MDs come in all shapes and sizes and the roles are hugely varied across institutions. I don’t think I could be a BB MD but I’m very happy in my role I am. There is no one size fits all and you can very often create the role that works for you if you’re good and willing to find that seat.
- Being a VP is the shittiest role in banking. There’s nothing redeeming about. All the responsibility with no authority. It gets better after that and you’ve done all the hard work, so there’s merit in seeing it through
This is a very surprising take. My VP years were the most chill of my career...by far. Goes to show that its all very firm/group/team dependent.
My VP years were chill too, chill because my career was going nowhere (which I agree was firm / group / timing dependent) which creates its own sense of burnout. Like everyone around me is useless and political, and why we are all getting paid because this is a disaster, sort of burnout
Thank you for this, appreciate your perspective
.
Lol@ those relationship skills being worth nothing to hiring managers.
When my client CEOs want to hire for their executive team, one of the things they value most when they hire senior bankers into senior corp dev / CIO / CFO roles is the industry network, ability to forge relationships with key counterparties, experience presenting to Boards, experience managing complex stakeholders.
I have no idea why so many people spend years working hard in banking and then willingly choose to remain grunts.
A thousand times this. The absolute most important skill in all of business (whether banking, PE, corporate, etc.) is the ability to build a network, build relationships, and sell. Banking MDs need to win new business, PE partners need to attract investors, CEOs need to attract the best talent for their management teams. Every aspect of that is selling someone on doing something that benefits you.
The banking hierarchy is a pretty perfect ranking of what skills are valuable and in and in what order (and these are obviously paid commensurate with that). Technical skills (analyst) managing juniors (associate) project management (VP) client relationship management (Director) winning business (MD).
.
Grass is always greener. I was an A to VP promo and top bucket at a top BB and EB.
I’m currently in a strategy role and was previously in PE. Every job has only gotten worse or stagnant in terms of hours and a helluva lot worse in terms of stress, pressure, and responsibility.
Either I’m always landing the craziest jobs, or, in my opinion, when you make over $250K base in finance, you’ll never find work-life balance, and your neck will always be on the chopping block if you don’t perform (my role was a replacement for an underperforming McKinsey consultant and Harvard MBA).
My 2c: if you can manage stress—I know your pay is fine, and it’s just the hours getting to you—stay, because it can get a lot worse. At least there’s ebb and flow in banking.
I’m working on a transaction right now and am closely working with a senior associate at GS. He looked really sad on Zoom, saying he worked until 1 a.m. all weekend. He even asked if we were hiring. If he thinks his job is hard, any role I’d offer him would be taking his soul.
Jesus dude
Let me get this straight. You went from banking Analyst to VP then to PE VP then to strategy and it's only gotten worse? Rare to lateral from banking VP to PE VP so kudos and curious about that move since it's on topic for this thread.
What strategy role are you in now and how could it possibly be worse than banking or PE? Comp that much better too? Are you head of strategy at an investment firm or in corporate
I have a hard time believing this. Maybe if it’s a MF PE role it could be more stressful than IB, but I’m shocked that an internal strategy/biz dev role would come with more stress. It’s true in IB you might have less “skin in the game” vs actually trying to grow a company in strategy, but the stress in IB is still astronomical.
Hours in banking are what you what them to be when you’re senior and good
On the downside, I’m on the road three / four days a week and can never really switch off
on the upside, I took 50 vacation days last year
Are you me?
bumping, good discussion to hear about alternatives to banking especially for the junior folk
i'm a junior VP and am very VERY afraid of longevity in this sector in the next 10 years or so
What specifically concerns you the most?
Personally feel i have no marketable skills, no network, scared i will have no origination capability, not sure how I can get promoted to Director/MD, where I can lateral to, everyone's firing etc.
What is your NW (roughly of course)? That will ve important for the answer. I’m an mba vp myself
Including or excluding primary residence? $74mm/$82mm, respectively.
If you come from wealth why are you doing banking lol
WHAT THE FUCK is this shit
The pay cut to corporate development may not be as bad as you think once you factor in equity. If you get in as the head of a PE backed company, your all in should be at or near 1mil.
can you explain the breakdown of that all-in comp? it doesn't sound accurate when you divide the equity over a 5-7 year horizon
In my previous role in Corp Dev I was number 2 in seniority. My cash comp target was 300-400 and the equity I earned over 3 years was worth 750k. I actually walked form the equity to go into IB. I am hearing offers - literally get a call every quarter - for head of M&A. The comp ranges from high 300s to mid 500s cash with equity being in the 750k-2mil range in today's value depending where the PE group is in their hold. So say you get in around year 3 and assume another 3-4 years so your equity goes from say 1mil to 2.5m. In that time you have earned 2.5m stock plus ~1.5 cash in 3 years.
Charles Aris has a really good comp report that they publish on Corp Dev compensation.
I'm sure some sophmore college student threw shit on a post by someone with over a decade of experience.
Good reminder as to why I always tell college and MBA students recruiting for IB to take what they read on this site with an entire shaker of salt. For every well-intentioned, thoughtful response, there are 5 people making it up as they go along and 5 more who are college students playing dress up online.
Allowing totally anonymous posts (a new development since I last spent much time reading this site) has made this worse, if I had to guess.
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