On this forum there is quite a bit of discussion about the analyst/associate lifestyle (a.k.a Hell) and becoming an MD is sort of seen as the light at the end of the tunnel. I'm curious though about what the life of a VP is like, in the middle ground between these two. Some specific questions:
-What does it take to be promoted to VP from associate? How many associates become VPs?
-Do most/many start to settle down (i.e. start families, move out to CT, cut back on models and bottles)?
-Hours? Travel? Predictability?
-What does a VP actually spend most of their time doing? Are they sourcing deals? Managing Associates and Analysts? Kissing MD ass?
-What does it take to be promoted from VP to MD? How many VPs become MDs?
-Alternately, what are other exit opps at the VP level?
Thanks for any insight.
lol that south park was hilarious......underpants gnomes
Associate to VP is more common than you would think. Most associates who make it through the requisite time and want to continue in banking can get the promote. It is very hard to get and keep good talent at the middle management level in banks. Basically, the best analysts goto PE/HF or leave banking, the best associates do the same, this leaves all the middle of the road people to be VPs.
The way it was once described, which I find accurate, is the job of a VP is to manage MDs in their interactions with everyone below them. That is, MDs come up with big ideas, VPs make them into reality and tell them when they are being silly. Depending on the firm, VPs may staff associates and analysts or just associates (with analysts having a separate staffer).
VPs are as varied as analysts in their models and bottles approach. However, in general you tend to find VPs be much more settled down. Factors that lead to this include age, generally being tired of it and ability to pull in a trophy wife.
Unless you are on a deal, VPs don't order seamless in the office (that is your timing). You also tend not to come in on weekends and instead just do stuff via phone and email. More travel, slightly more predictability.
VP to MD requires deal flow. As you move on as a VP you go from managing deals to sourcing them.
Exit opps at VP level are the same as at other levels (PE/HF/VC/Corp Dev), just at much higher levels. A VP who leaves an IB after working all the way up can generally enter at the low C-level (COO for example) in corp-dev.
Lots of good info.
Based on comp tables it looks like VPs typically take down $500-800K per year, yet you say that banks have a hard time keeping talent at that level. Are PE/HF VP-level exits making $1M+? Or is it more about lifestyle? Or just better work?
Also, if many of the VPs are middle of the road, banks must have trouble finding great MDs? Or is this just a recent trend with the boom in PE?
AltESV: In response to your question about why so few good middle managers, I think that's actually a general trend across more than IBD. At lots of companies the top people are very good (you generally have to be to reach the C-level) and the new hires can often be good. But the people in the middle have been there so long that that they are kind of tired of the whole routine and aren't super-motivated anymore. Whereas those at the top may have some equity or serious cash at stake and new hires want to impress.
At higher levels I think VPs tend to be pulled away by other banks just as much as they are pulled away with PEs/HFs... basically until you reach the MD level it gets hard to just hop over to the PE/HF world because they generally like to take Analysts (exceptions apply of course).
There's also attrition because some VPs get really bored of this job and just leave the field altogether.
Many of today's "star" MDs have been in banking for a very long time, since well before the recent PE/HF boom - at that level it's easier just to stay and do what you know you're good at. But yes, finding great MDs can be hard because it's very difficult to win clients and huge deals even if you have a brand name behind you.
Also, don't forget about those people who actually love banking and want to stay in it forever - that probably explains where at least some of those star MDs come from. :)
VPs can make far more than $500-$800k at a PE/HF. Pre-MBA associates can make that much including phantom carry at places like KKR and Blackstone. At the VP level, you would have the opportunity for actual carry. While your base and bonus would still be higher than at a BB, including carry you can make much MUCH more.
Are associates' work closer to analysts or VPs?
I assume it would depend on what type of associate you are, right?
If you are a post MBA associate, I'd expect for it to be a first year where you learn from analysts more than VPs and as you progress I guess you may interact more with the VPs. Now if you are an analyst to associate promote, I would expect you to have proven yourself and your commitment to the group/firm. Thus, obviously, VP's who have been there for a while would have seen all that and would give you perhaps more responsibility hence involve you more in their work (to groom you) right off the bat.
A question I have is, do post MBA associates have any disadvantage to internal promote associates in becoming VP's? I understand that post MBA associates can have advantages too because of having industry contacts or field expertise in whatever industry they worked in prior but I ask because those associates that were promoted from analyst level obviously are the "stars".
I'm hoping to lateral after I finish this analyst stint in a non IBD area of my firm and if that doesn't work I'm sure I can get into a top 5 world MBA program and then come in at the associate level so I'm interested to know my chances of making it to VP versus the competition (even if it's so far ahead)
Phab - I won't retread it here, but there is a great thread on the difference between post-MBA associates and direct promotes: http://www.wallstreetoasis.com/forums/mba-vs-direct-promotion
Thanks for the additional color Dosk, that's insightful as well. I could definitely understand how middle-management becomes a sort of collection pool for those that don't have the chops or ambition to advance to MD/C-level positions. There certainly are plenty of people like that at my company (mid-size tech company). Even among "star" directors (middle mgmt), there are very few I can ever imagine running a company. Once people hit a certain pay and authority level, along with a comfortable work-life balance, I'm sure it's easy to become complacent.
thanks for the link altesv
Life as a VP? (Originally Posted: 11/19/2013)
To cut a long story short I've been approached for a VP role in a mid-cap focused PE shop. I'm not in the banking game anymore, having moved to a corporate a few years back when the market shat itself. The coin is obviously a lot better than what I'm making now given there's carried interest, but I have zero interest going back to a 60-70 hour work week.
For those already in a PE shop at this kind of level, I'd be interested in hearing what your work/life balance is like. I'd mostly be doing origination and sale strategies for assets that have a natural corporate owner.
Highly depends on the shop. I think you can expect about 60 hours as a baseline. Fewer hours for more family oriented shops and more hours for "hardcore" shops. Hours definitely continue to improve once you're a VP, though travel picks up. The best part is that the type of work you're doing changes substantially, making work a lot more fun. You get to manage a team of associates that will complete a lot of the grunt work while you can focus on driving value and relationships. It really is a whole different feel when you're not at the bottom of the totem pole.
Note: If you're cold calling and sourcing, this advice goes out the window. I can't help you with those sorts of PE cultures/environments.
CompBanker is spot on, as usual. Although, most MM PE shops are sourcing heavily right now b/c of the slow M&A environment this year. Therefore, I would expect to be heavily involved in BD work.
But, to expect working 40-50 hours every week is unrealistic at most places. But, you won't be putting in 70 hours/week unless you are on a deadline.
Thanks gents. I've got an interview soon so I'll test them on this then, but the current hypothesis is that I'll knock them back unless the points and structure of carry is too good to pass up.
Hey Wage Slave Number 9, what happened with your interview...
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