IB vs PE
Hey Monkeys, hoping to get some insights on whether moving from IB to PE still makes cents. IB today is a lot different from the pre-COVID days as banks are more flexible with WFH, higher pay, and seem to be more aware of healthier WLB. PE associate's hours will definitely range fund by fund, but generally are given more responsibilities than IB associates and will experience more stress on the job. PE pay hasn't changed and is now is on-par or below IB associate pay. Not to mention how after your PE associate stint you have to go to B-School to try to progress up the ladder. Carry is only for seniors at PE and is only on paper, not easy to obtain.
I'm currently an analyst at a BB and am currently prepping for off-cycle, but am failing to see the rationale behind moving from IB to PE anymore. Are there any strong rationale from you guys for moving to PE besides "more interesting work"?
Hi Analyst 1 in IB - Cov, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:
More suggestions...
Hope that helps.
del
I also am considering to just stay in banking I like my role and the pay is good plus no MBA required like you said.
My guess is that IB total comp will not be as high as it was last year given lower deal activity. This in combination with most pe firms raising comp will help to even out the playing field. PE aso will almost always be a haircut to banking aso pay, but the difference will be lessened. Also, if we head into a recession, I would definitely foresee some layoffs happening in IB.
To the MBA point, every pe firm I interviewed with has been open to the idea of promoting from within. I think most shops have understood that its a stupid idea to kick out a high-performing associate for no other reason than to get a degree.
The way I thought about the decision personally was this:
- if you know for a fact that you wanted to be a senior banker some day, or just want to maximize cash comp for the next few years and completely exit the industry, then go A2A.
- If you see yourself staying in finance for the long term and are interested at all in being an investor, there's no real downside to going to PE. Banks would be more than happy to have you so that door is never closed. The short term comp hit for a couple years means nothing in the grand scheme of a career in finance, either IB or PE. Optionality to B-school, corp dev, startups, etc. is likely improved going the PE route as well. Who knows maybe you go to a smaller, sector-focused shop where you really resonate with the thesis and like the team, and end up staying for your entire career.
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