Investment Banking VP vs Private Equity VP
Everyone knows it's hard to make it to the top levels of IB or PE. There's very few spots and a lot of competition. If VP was the highest level you made in banking or private equity and spent the rest of your career in that position, which would be better in terms of comp, lifestyle, and the actual day-to-day work?
Assume BB/EB and MF/UMM in tier 1 city.
First, I'd like to commend you on an astounding post.
Comp: PE (your getting carry)
Lifestyle: It's a toss up. It's both very difficult and challenging. I would say PE is more difficult
Day-to-Day: PE. Much much more interesting work.
Overall.
Private Equity VP is in fact > Investment Banking VP
Thoughts?
"Comp: PE (your getting carry)"
^-not if this is the extent of granularity in your analyses
But what if it was CVP or Q?
Shitty questions get shitty answers, so - it depends. VP level is where people start to get axed so you should probably be good at what you do, and have the motivation to do it day in and day out. Posts like this are useless for many reasons, but mainly because it’s difficult to predict where you will be in 1-2 years, much less in 5-7 years. My guess is that you want someone to answer this question by saying “PE VPs make $xxx and IB VPs make $yyy” and you’ll pretty much stop reading after that. The truth of the matter is, very few people make it to that level in the first place, and if you do, congrats, but if you happen to be like numerous other analysts who decide to go a different route, that’s completely fine and you shouldn’t worry about it.
BB/EB VPs probs clearing 400-700k depending on tenure and performance
MF/UMM VPs probs clearing 400-600k plus 3-5M of carry vesting over 5 years
Pretty accurate.
Do they all vest at the end of 5 year or in portions across 5 years?
Looking for thoughts on this- in my networking/what I've heard, it seems to me that generally people get 'stuck' at VP in both fields, but for some reason investment banking VPs who are stuck at that level continue are able to continue that role indefinitely (just never get promoted so some choose to exit) because there is value in having experienced VPs who might not be MD material, whereas PE is more of a move up or move out mindset- if you don't get promoted, you get fired, and you don't see as many of the lifer type VPs as there are in banking. obviously this is firm dependent, but can anyone confirm/deny?
Don’t think that’s true in banking - still up or out at VP. I think Director / ED is where most people get stuck before moving to MD. GS is obviously different.. VP and D/ED are combined so people do get “stuck” at VP.
Following
Very different risk profile that I don’t think people appreciate.
As VP in PE, you’re getting close to needing to contribute. One of “your deals” need to happen and will be the main reason for your next 5 year job (looking for bolt-ons, exit…). If you fail to get one of those you won’t make it to principal+.
Job changing is also pretty much a single bullet. People don’t do 3 PE jobs in 6 years. It screws your carry, and show that you’re not really getting anything done. So VP is basically when people decide to move shop for the next 10 years.
As a VP in banking, you can still hop around a couple of times. Your contribution is execution only, no-one gives a fuck about your clients. No one wants you to bring mandates because that takes resources from the bank to execute and make Mds look bad. VP in banking is a glorified associate). The good thing is that it’s somewhat low risk (you get canned at director promotion if you can’t handle a client), but most likely you’ll get the benefit of the doubt until you don’t.
100%
You can get promoted to principal at most large cap and even umm without any deal sourcing chops
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