What buyside role has the most value-add to society?

Not in RX / distressed but from all my friends at distressed shops, I’d think this is one of the hardest to live with types of investing if you care. You’re frequently in positions that are less than friendly whether it’s taking over a business, forcing bankruptcy, etc. lots of layoffs, restructurings, all that. As the saying goes, no such thing as a good outcome for everyone in the RX world.

I work in classic buyout and, at least in theory, we’re helping businesses grow which makes everyone better off. When things go sour we still do layoffs and all that, but probably less soul sucking than a buy and build strategy (where your constantly doing layoffs) or distressed.

The “best” in my opinion is arguably infra financing stuff, if you’re building wind turbines or cell towers it’s typically improving the lives of everyone around them and there’s less human capital stuff (meaning less firing people)

Which is the most profitable?

Mentioned above but Infra PE, especially more greenfield development focused. You're building and maintaining assets that serve very fundamental needs of society as a whole and your strategy isn't predicated on outsourcing or headcount reduction.

Arguably none of them, but the easiest argument is likely made for VC and real estate development (principal side) since speculative investment spurs growth and leads to future investments by others. You could argue those are necessary for society even outside of the “capital allocation” type arguments 

I would look into the buy side of the buy side: joining an LP. Endowments are great places to be and incredibly rewarding. Not to mention great hours and great pay (MDs at the firm I'm at make 1.1m)

(No longer an intern, graduated and now I'm an analyst 1)

I would say that as long you work in finance and apply working ethics strictly and empathy toward your neighbours, then you're extremely valuable to society. There isn't a lot of people like this

Don’t mean to burst your bubble but thinking of some jobs as “adding value” to “society” and others as not is probably the primary reason we have so much going wrong in the world (yes, I fully agree that, on balance, more is going right than wrong but we still have serious problems). It’s also an especially Western affliction and brings with it other kinds of destructive beliefs. Prime among them is the implication that making money is bad or, at best, not affirmatively good. The problem with this world view is that, since people are (intellectually) lazy by default, they tend to settle for signals rather than acting on what they claim to believe. That can take the form working for specific organisations, types of organisations or doing certain jobs. The real-world outcome, though, tends not to be as clearly “good” for “society” as you’d believe if you thought about it on a shallow level.

Let’s take doctors in the US. The public perception that doctors like cultivating is that they do what they do for the benefit of patients (stand-in for “society”). The problem is that they get hungry like everyone else and want to live comfortably like everyone else. Also, with all the personal sacrifices they make to get a “Dr.” before their names, they want some kind of reward. That reward is inevitably financial. So they go on to make pots and pots of money, which comes out of “society’s” pocket. That is a major reason the US spends trillions on healthcare. As of 2017, something like half of health expenditure was on compensating doctors and hospitals (~$1.6T) according to CMS. Bear in mind that a substantial number of them, if not a majority, are supposed to be “non-profit”. They are supposed to be the model of “adding value” to “society” - non-profit organisations, staffed with expensively-educated people exclusively from rich families, “dedicated to healing the sick”. Maybe if “society” collectively viewed doctors and other healthcare professionals for the rational economic actors they are (as opposed to the altruists they have deluded themselves into thinking they are) we’d get a bit further on dealing with needlessly expensive healthcare.

To use an example you might relate to more, you could, in theory, join the IFC, which is the investment banking arm of the World Bank. Again, it would give others all the signals that you and the organisation you’re working for are “good” and “adding value” to “society”. However, consider that the World Bank is controlled by the US government - its largest shareholder. That means that it is beholden to the political ideology of that government. Said ideology is known as the “Washington Consensus”. World Bank programmes designed to fit within American ideological preferences have wrecked countries across the world. The structural adjustment programmes it has forced on poor countries have actively harmed their development prospects and consigned generations to poverty. The best part is that the World Bank is actually the better of the BWI. It has done some good work alongside damage. The IMF -another organisation ostensibly “adding value” to “society” - has done nothing but destroy economies and make the world poorer than it might otherwise have been.

Neocons, Jihadists, Communist leaders and revolutionaries and the Inquisitors all thought they were “good” even as they murdered and / or impoverished millions.

All this is to say that the search for moral purity (especially convincing oneself that you are good or better than others by virtue of your job / employer) leads to distortion and destruction. It’s like those evangelicals who are addicted to porn and engage in sexual behaviour that we might politely call objectionable. Instead, I would argue that you’d do more good for your community if you acknowledged that you want to live comfortably and that there’s nothing wrong with that. Living comfortably requires money. There’s absolutely nothing wrong with the pursuit of money to provide for yourself and your loved ones, as long as it is done within the confines of the law and you’re taking all reasonable steps to not gratuitously harm others.

My advice:

1. Find a role that requires you to solve some kind of problem that you care about enough. You mentioned enjoying working in RX. My view is that allowing a company to go bankrupt doesn’t help anyone if it can saved - even if that requires painful cost-cutting measures. Eventually, you could lead an organisation that ends up “creating value” for the world. That value will outweigh harm only as long as you remember that it exists to serve narrower interests than “the good of society”.

2. Understand that there is a trade off between effectiveness and harm done. The more effective you or your organisation are, the more people you or your organisation will harm (and have harmed). The important point is to ask if you did your best to minimise harm (not maximise good).

3. Be kind to those in your immediate circle and try to spread that kindness as much as you can progressively outwards. A lot of supposedly “good” people turn out to be atrocious to those around them (at best) and even use their outward appearance to serve as cover to not really do the kind of “good” they claim to be doing (at worst).

Apologies for the long post but hope this helps.

Value to society = value of LPs + value provided by the portfolio.

Low end: rolling up payday lenders in low income areas and your LPs are the Onlyfans retirement fund and the Bin Laden family office.

Normal: investing in B2B software and services and your LPs are insurance companies and teacher / firefighter pensions.

High end: deep tech / bio research fund and your LPs are endowments and foundations.

Most buyside roles are reasonably valuable to society.

Probably healthcare-related IB. Actually, HC growth equity/VC is probably the best.

Of course, you're primarily trying to make a profit on what you're investing in, but you wouldn't have the opportunity to make a great profit unless whatever you're investing in has a tangible and positive effect over the current status quo for something related to health. 

If you find a founder with a great idea and provide them with capital and guidance and you help bring a company to market and expand it such that it changes the world for the better, then I think that's pretty value-add.

One could also argue public pension fund investing employees?

People who work at OTPP are the ones who provide teachers with their outlandish pensions. Though it could be argued that it's a net benefit because it's to teachers' benefits and everyone else's detriment, depending on what OTPP invests in (my buddy who is a farmer tells me they are infamous for buying farmland from farmers and renting it back to them which they hate).

Early-staged Venture capital. Many of the greatest companies nowadays survived because of some VC had faith in them. They were so fragile during the early days, no track record, no cash flow, only a vision. Many of multi-billion-dollar-worth companies were suffocating in early days due to lack of cash and survived solely based on 10M-ish VC money. If the VC wasn’t faithful enough to give them the money … they would have died in crib for good.

Biotech Buyside, less so on traditional L/S but definitely see activist & early-stage funds making a huge impact and can drive drug development & approvals, can be huge (eg Acerta, Pharmacyclics etc)

ESG

Biotech Buyside for sure. Also the biotech SS ER community seems to be a solid group of people who actually care for the development of medicine and therapies.

Easily would say infrastructure private equity. Providing capital to companies and assets that allow people to live the high quality of life they enjoy as well as the basic necessities for survival.

None of them? What kind of a question is this?

I mean if you really really had to pick one, I'd say you'd go with like, an impact fund or something, but still that's really grasping at straws. 

If you want to feel good about what you do, or feel like you're benefitting society, either quit your job in finance and move into an industry that does generally benefit society, or donate some of your sizeable RX paypacket to a charity that benefits society. 

Infrastructure PE, ESG Funds or Pension Funds (if you do it correctly)

Go join an "impact" fund. A bunch of firms like KKR and TPG have funds that only invest in ESG centric companies.