Optimal Time to Move Back to Hometown
Im an undergrad student planning on going into IB after graduation. I am from the midwest and I want to eventually move back to my hometown after doing finance in a bigger city. I want leave NYC, Chicago, etc around 10 years after starting banking FT. What is the best path to plan on taking to make as much money as possible in 10 years? PE? VC? HF? The most common exit seems to be PE but this gives me trouble because of the pay nature of PE. If I am wanting to leave in 10 years I feel as if I am screwing myself in terms of comp. Say I do 2 years in IB then 4 years of PE before I get any sort of substantial carry (which seems to be the real driver of major comp in PE). If I leave after 10 years I would be leaving carry on the table because firms usually hold for 5-7 years right? That would have them selling 1-3 years after I leave and me missing out on carry. It just seems so tough to leave in that time frame and seems like I would be building up a career to the point where it gets very lucrative then just leaving at that point. Best to bite the bullet and stay 15 years? 20? Life?
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I definitely can relate to this. If your goal is to torture yourself to build as much cash as possible, I think banking might be better than PE. After 10 years, you’ve had a couple years making director money, mostly cash. HF also is obviously great for building massive cash, but that’s much much harder to do (especially do well).
PE is a great career, but the carry really would make it not worth it in your situation. I’d be careful not to get sucked into something for life if it’s not what you want. I’m worried about the same thing, but it’s just not worth it.
Seems like staying in banking is the safe route, HF is the high risk high reward route. PE just doesn't make sense in terms of comp if I am going to leave after 10 years.
Why not work in IB up until you're ~VP and move to a LMM shop as a Sr Associate or VP? Have seen it done a couple of times, and it's easier if it's your hometown and you have some connections
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