Do people still want to go PE?

nah fuck that shi

IB is the play these days - although IB isn’t immune to selfish boomers / Gen X hogging all the comp at the top levels either. There are just more spots and there’s more turnover, so you have better odds of moving up. 

PE is saturated and no one leaves… and funds aren’t even doing that well anymore. I scratch my head at anyone who does it 

First year aso at top european megafund in NYC (previously at top banking group).

In aggregate, I think PE is still worth it because you learn genuinely important skills across a new platform, add-ons and portco work (which you do not in banking) and you can always go back to Ib (you may lost a year of seniority but who cares). There is a reason operators and hf like the pe experience.

However, I do agree attractiveness is going down. VERY rare to get vp promo at my fund and those that do are absolute machines and cracked (and sacrifice a lot) and performance of these buyout funds is quite middling.

Overall, if you are at a GS / MS / EVR / CVP type place in a strong group should think whether it is worth leaving. These banks are also harder to lateral back to (unlike a moelis for example whuch is perpetually recruiting).

Couple of thoughts that I used AI to clean up. 

Do people still want to go to PE? Judging by the fact that our off-cycle process has drawn more candidates from the same set of banks this year than when I recruited, yes, though some of that is just EBs running far larger analyst classes than when I started. Some of it is also because generally everything has seemingly gotten more competitve. 

That said, anecdotally from talking to candidates from my alma mater going through PE recruiting, more and more are treating it as a two-and-out, a springboard to whatever they actually want, whether that’s corporate, business school, or a HF. And honestly, that makes sense. If you don’t want to invest in private markets long-term, skip PE and go straight to your goal where you can, though that isn’t possible for everyone or in every case. To be clear, none of this means staying in banking is the better move, it isn’t. PE still pays comparatively, the work is more interesting (or at least different and thus a new skillset), the exits are better even if you’re just using it as a springboard, and it's very easy to go from PE to IB (often with a promotion) than the other way around. 

There’s a lot of false circlejerking here, both from disillusioned people in PE and from those who stayed, because the attrition rate is way higher than IB (where you can pretty much coast your way to VP3). At most PE shops, especially large-cap, there’s no path to VP at all. And even if you get the VP promote at a MF, good luck with the next one, every level is bloated, no partner is giving up a seat (zero incentive to), and MF fund sizes aren’t growing fast enough to justify adding partners anyway.

Ultimately: if you’re ambitious and want options, PE is the better springboard, more doors, higher upside, and a skillset / resume point that travels better. The real case for PE is the asymmetry: PE’s floor is a soft two-and-out with better optionality than you started with, and its ceiling is still theoretically uncapped at the right fund, while IB is the reverse, solid floor of bieng able to coast until ~VP3 or so but hard ceiling and significantly less optionality.

always thought it was funny to see retard PE guys think they are investors. its just IB 2.0. oh and also, no talented nor smart people stay in IB or PE. IB and PE are the new accountants in this day and age now

Well, as always, once everyone wants to get in and something becomes popular, the days of making big money are usually over.

With plenty of other investment-related careers out there and the decline of PE, I feel like it's mostly people following the herd who still insist on going into IB just to break into PE and call themselves an "investor".

How do the grievances here compare to PC. PC feels like banking with carry potential in my eyes. What am I missing?

I think it goes in cycles. Between 2002-2007 you were a king. Then 2007-2013 you were stupid to do PE. Then between 2013-2022 you were making money hand over fist. 2022-… pretty tough again. The problem is you never know how long the downturn will last. The other problem is that this is generally not a career you can just jump into so you need to have been in the game for a long enough time that you’ve got a ton of carry allocated to you the moment the tide turns and you can capitalise. Ultimately PE is a levered Beta play so obviously the most important thing is interest rates. I’m not going to do the whole spiel about that as it’s obvious

Whether banking is any better? I’m not sure. Right now, maybe. In 2022-2025 it definitely wasn’t with pretty big lay offs. It was pretty brutal with lots of junior MDs fired and Directors removed etc.  I also think that the skillset is quite limited as a banker. Not that PE is so broad or deep, but banking is even more limited. Most bankers I know are good at process and have a decent M&A playbook to make a sponsor believe they should bid more. Maybe some have some industry knowledge. But overall it’s pretty limited.

In PE you get at least some exposure to how boards work, how to understand legal agreements, some of the accounting, etc. Overall both are pretty specific career paths is you stay on them long enough 

In summary, who knows, it’s highly cyclical - pick you poison and close your eyes

as always, ye

I think it’s a more nuanced decision these days.

People who were in the last 40 years (starting 2018 and before) were luckiest people on earth, riding macro tailwinds of declining rates.

Nowadays, you need to give the choice some thought. If you kill at internal politics, have the gold plated CV MFs want (so you can climb and be presented for good optics), and understand it’s more of a corporation vs. investment platform that outperforms, it’s an option. If you want to actually outperform, you look to the mid market / smaller funds that can actually scale and your path up is more performance-based.

If you want to develop a skillset, pick your firm accordingly. Banking certainly pays more in cash in the mid levels at the boutiques, but it’s still banking. It’s also not free lunch, and with more people saying, there’s actually increased competition (you can’t be braindead and walk into a director role anymore).

I still think PE > IB based on my own personal preferences and interests (biased) but I also had bad experiences in banking. Theres some recency bias against PE as well due to COVID vintages, but the inverse will probably be true in a few years: rates are relatively “high” now and valuations depressed - if / when rates fall, firms will once again benefit from multiple arbitrage. AI is either a head or tailwind depending on your thesis too and we’ll see how that plays out.

The tax benefits towards carry are undeniable, however, and only modest performance is needed to still clip fat carry checks from big funds, which is achieved, and with firms offering levered co-invest, it’s still a very lucrative field (and in aggregate, probably more-so than banking).

I've had a lot of friends come back to banking after their aso stint in PE. I think you'd probably earn more, have potential to make more comp, and have potential to have a better WLB. But does that happen often? Certainly not. 

More friends say they're just as stressed / work the same than they did in banking. You definitely learn more in PE, but if you have a growth mentality, try to involve yourself as much as possible on deals, you can learn tons in banking still. 

I stayed in banking and like where I'm at. People are right where you can modestly coast through a while through VP2-3. Even then you could still work, not as hard, and stay on as D for a year or two, save a ton of money in the interim, then then pivot to something you'd enjoy after building a nice bank account

PE longterm is not as attractive as it once was given the decreasing WLB / earnings trade off compared to alternatives and the high competition, but doing it for a couple years in your twenties remains a great place to learn, get reps, and beef up the resume. Can always go back into banking from the buyside and some teams will even give you more credit for the years you spent there.

I totally get the conflict. The 'PE golden ticket' narrative is definitely fading. If you're at a good group in banking with a clear VP/MD path, the risk-adjusted return of staying might actually beat jumping to a mid-tier PE fund right now. A lot of those funds are struggling to deploy capital and are just collecting management fees. Unless it's a top-tier mega-fund or you really want the buy-side skillset, staying in banking (or lateraling to a better bank) seems like the more rational move in this market.

PE is still attractive, just not the automatic “upgrade” from banking it used to be.

I think moving to PE nowadays isn’t as automatically “golden” as it used to be. If you’re at a strong banking group with a clear VP/MD promotion path, the risk-adjusted return of staying might actually outweigh moving to a mid-tier PE fund. Unless it’s a top-tier mega-fund or you specifically want buy-side experience, staying in banking seems like the more rational choice in the current market.

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