Is Lateraling to Senior Associate Risky?
Hey everyone, I have a fast approaching decision to make and am looking for some advice on my current situation. Would appreciate some candid views to help me build some conviction.
Background: Top ~25 undergrad with high GPA (not Ivy) > top bucket at Elite Boutique (not EVR) > large/megafund PE (3 years) > admitted to Wharton MBA
At the PE fund I had a very solid experience. Two start-to-finish deals as lead/only associate and a very deep turnaround situation (spent multiple months at the portco working with management).
I was hoping for a promotion or return offer from my current fund, but unfortunately that did not pan out. They are being very supportive (offering me a lot of time to stay on if needed), so I unfortunately think the spot wasn't there or had a very high bar because the VP class above me is pretty big. At the very least, I haven't yet been able to ring out any meaningful constructive feedback to watch out for while making the next jump.
End goal is to break into the VP/Principal role at a solid, and ideally large or MF, shop. Since the promotion didn't materialize, my fear with lateraling is unexpectedly hitting another dead end like I did with my first program. I'm early in the process, but my guess is that there is no way to "guarantee" a career track is a sure thing (provided I perform well, of course). It also feels riskier with COVID if the next year ends up just being putting out fires and working remotely, which seems harder for a fund to make a promotion decision off of.
If this scenario does happen it seems very high risk: how do you recover from 5 years as an associate at two funds with neither promoting you? Am I overthinking this risk? Alternatively I've been accepted to Wharton and could just accept the ~$200k of debt (as well as a really good time). This feels relatively reliable to get that mid-level PE role with my background and seems like a cleaner story than lateraling, but I know it's still very competitive and it's not HBS/GSB so feels less safe than I would like. What's your take on the likelihood of successful with this route? Is there meaningful chance of bombing that process or should I be OK?
To summarize, how do you view the relative risk of these two tracks when it comes to securing the mid-level PE role, especially now during COVID? Appreciate any views!
In a similar stage as you right now (albeit different fund size -- lateraled as an experience associate from a bigger fund to a LMM / 5-10 person team) and can share at least how I'm thinking about it. What I came to realize over the year is that there's no option that will eliminate the risk of getting booted out of the industry. In going to b-school, you're effectively delaying the gamble of betting on yourself for 2 years (will you break in as a VP or not), whereas lateraling pushes that risk onto you now / in the near-term (assuming an offer as a sr. associate, will you break in as a promoted VP or not in a year). With that being said, I think you have to think about this from a "what do you want" perspective as opposed to a "what route maximizes my chance of staying in the game" perspective, as you really can't do much to control the latter and that risk will exist no matter what.
If you go the MBA route, I would imagine that keeps your optionality high for two reasons: (1) hopefully broadly just a better hiring environment than now, and (2) having an MBA + with your background at an UMM/MF, you won't be limited from any fund other than the one you came from. With regards to HBS/GSB vs. W, I've got a bunch of friends at all three and while there's a definite benefit to the former over the latter, it sounds like with the exception of a handful of funds, Wharton will definitely not prevent you in any way (you may have to network proactively versus having some funds come to you first via campus recruiting, but the door is yours to open).
On lateraling now, socialize with headhunters and see what's out there. If there's a great fit and you make a run for it, and it's a firm you can see yourself making a career out of, then you should go for it and take the gamble on yourself - by all accounts it sounds like you've had a great experience and have what it takes to make it to VP. If you don't find what you like, then you've got a great option in the MBA and should take advantage of all the benefits that go with the MBA without so much worrying about the risk of getting back in.
That's great advice, thanks. Ideally I want to run hard at the lateral opportunities like you suggested to see what's available. The downside is timing, as I have to lock down an apartment in Philly relatively soon and lateral processes have been pushed out from COVID.
To a degree I really am just trying to talk myself into doing the MBA, I just need to feel comfortable I'm not taking on wildly more risk than lateraling. Candidly I do feel a bit stiffed by my current firm, so a change of pace is welcome and I have no doubt the MBA experience will be a life changing one. It also doesn't hurt being able skip another 1 1/2 of associate work...
Cheers and good luck with your next steps too.
For sure, I hear all that. It sounds like you're leaning to an MBA and if that's the case then I think you should do it - from my point of view I've always been much more scared of the regret of not doing an MBA than the regret of getting one (candidly I think that's been a real benefit of being in our career field). Given everything that's going on with COVID, it sounds like if there's ever a time to justify an MBA even when you might be able to get a solid lateral spot, now's that time. For me, coming from a LMM, I do think there's materially more risk in getting a mid-level gig after an MBA. With your background, however, that risk vs. finding a senior associate spot now feels pretty minimal such that I definitely wouldn't force / consider taking a lateral role that doesn't absolutely check all of the boxes for you.
I fundamentally don't understand the senior associate role at all - won't go on a long diatribe, but you should do the MBA. With a solid UMM / Large-cap PE experience + Wharton MBA, you'll more likely than not be able to land a job (although it will more likely than not be at a smaller fund than the one you were at - which honestly is fine).
I've seen more lateral senior associates than you can count end up exactly the situation you describe at which point they are in no-man's land - have to go through recruiting at the VP level explaining why they didn't last at two firms, and too old for MBA.
Go for the MBA. The alternative is go to a portco at your current fund, and re-apply for HBS / GSB. That would be the only alternative I would consider (but you should really only take it if for some reason you think there was an issue on your resume that clearly 1 more year of work experience + time can overcome).
I think I know the fund you're at btw - and I think the issue is there's a large VP class incoming along with the fact that the portfolio is in the gutter.
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