Q&A: The Final Cut

Hello WSO. My investment banking journey started with my first post on WSO back in 2006 after I had just received my full time offer as an IBD analyst. After 15+ years of banking, private equity, and business school, I decided to call it quits and retire. On that note, I wanted to offer up one final Ask Me Anything to the community. Any topic is on the table, including career, relationships, mental health, travel, etc. I will try to be as open as possible, although I'd prefer to avoid rankings / compensation / hours type topics that have already been discussed in detail. Also, please post your questions for all to see, I'd prefer everyone benefits from the feedback, not just a single individual.

I have linked below my latest "Then and Now" post which gives a much more detailed description of my background, but my direct experience is in: MM IBD, LMM PE (LBOs), MBA with geographic experience in the USA and UK, and a wide range of sectors (e.g. industrials, healthcare, tech, etc.). Happy to discuss other career paths, but these are the areas I know best.

Compbanker - Then and Now (2020): https://www.wallstreetoasis.com/forums/then-and-now-compbanker

Comments (147)

9mo
BeautifullyConfused, what's your opinion? Comment below:

How has your life satisfaction trended throughout your years, and how has your career influenced it for better (promos/comp/stories) or worse (lost relationships, health)? Now with that in mind, if you were once again in your 20s in today's day and age, what are the main things you would do again, and what would you avoid doing

  • 10
9mo
CompBanker, what's your opinion? Comment below:

A few thoughts here. In terms of life satisfaction, the career elements are an important part, but not thing that drove life satisfaction. The thing that always mattered the most was the people (friends / relationships), then where I lived, then the job itself. The main exception was my analyst years. Those were absolutely brutal. I gained weight, barely slept, and was generally unhappy throughout those two years. It was a means to an end though, and I'm very happy I went through it in hindsight because it really did set me up for success both personally and professionally.

Analyst years aside, I have lived in a number of different cities from large to small. While I think that every city is only as good as the friends you make in it, I do think it is incredibly important to live where you want to live. Different cities have very different vibes as well as different 'types of people' - and it is important to be in a city where the vibe matches what you're looking for. My advice would be to maintain flexibility in your 20s in order to progress your career, but ultimately ensure you end up in a city you enjoy when you're ready to settle down. More to come on this topic in another post because it is incredibly important.

In terms of what I would do again, I'd say that I'm really glad I didn't make any major life commitments too early. I changed a LOT in my 20s and even in my 30s. How I spend my time, the people I want to spend time with, what I spend money on, where I want to live, etc. I was in a very long relationship with a wonderful girl, but ultimately we parted ways instead of getting married. In hindsight, I wasn't the right guy for her and she wasn't the right person for me (long term), and I'm very glad we didn't make the decision to get married in our mid-20s. I have a lot of friends that are still happily married to their college girlfriends/boyfriends 10+ years later, but my personal recommendation is not to rush it. You will change, your partner will change, and hopefully the two of you change in the same way, but it adds an additional risk. 

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 15
9mo
CompBanker, what's your opinion? Comment below:

I would say yes, I think IB/PE was a good career path for me. I have friends with such a diversity of jobs, from lawyers/consultants to restaurant staff. I've always felt IB/PE was very dynamic. I do get bored easily and while the big picture is always the same in PE, you are still encountering new situations, learning about new industries, and meeting new people 15+ years into the job. Plus, I had the opportunity to travel a lot for work, which to me adds an entirely new element to one's job. For a period of nearly 10 years, I was on a plane about once a week on average. While for some people this is hell, it enabled me to develop a unique set of skills including working from anywhere as well as gain extreme comfort navigating the world. This has paid off personally as I've always spent a great deal of personal time traveling.

That said, as much as I like PE, I think trading would have been an interesting alternative for me. I have always excelled a lot in math, particularly mental math and lightning math. Additionally, my 'gut instincts' tend to be accurate when it comes to both people and investing. While this is very helpful in PE, I think I could have built a successful career in trading or at a hedge fund without nearly as many late nights or painful days writing memos. That said - I don't truly know what these jobs entail, so I could be very wrong here.

I will say one thing that I have learned though: I truly despise client services. I don't think I would have survived long term in IB. I live for efficiency and the inefficiency in IB is mind boggling (PE has its moments as well). However, if I had to take orders from a client that I felt were a complete waste of time, I think I would lose my mind. The trade offs between IB/PE have been discussed extensively on this forum already, but this one aspect of IB is pretty much a deal breaker for me. Same reason I don't think I would have enjoyed being a lawyer. I'm happy to take the responsibility that comes with being the client in order to have full control over my day-to-day.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 7
9mo
Goldeneye25, what's your opinion? Comment below:

Just want to start by saying thank you for all your posts on this forum, you've given me a lot of insight into the finance industry. As someone who is going to be a trader (about to start at a high frequency trading firm), is there any general advice you could give me that you found useful throughout your career?

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9mo
CompBanker, what's your opinion? Comment below:

The answer is equally vague. I'm not 100% sure. I have a general idea, but I'm pretty certain my plans will change. If there is one thing that has been consistent for the last 15 years, it is that I've always planned, and life has never gone as planned.

Time wise, I'm focusing on my health and my hobbies. That means working out or playing sports every day to maintain fitness. I'm also now sleeping between 7 and 9 hours a night which is something I haven't been able to achieve since I was a teenager. It is AMAZING how much this improves my happiness and wellbeing. Sleep is so important. I've known this forever but for whatever reason, I've always been unable to sleep. Now I'm finally rested each night because nothing is on my mind and I can wake up whenever I want. In terms of hobbies, I'm trying out new things to see what I like. I'm currently working on my 3rd language through self-study and a private tutor, learning how to cook (I was a horrible cook before, still am really), and want to pick up something more artistic as well (drawing or perhaps an instrument, although that isn't an immediate focus).

Professionally, I really don't feel the need to jump back into working, mostly due to how much I'm enjoying sleep. I've told myself that going forward I will only do work that I enjoy, but the focus is no longer on earning money. I'm actually considering becoming a professional mentor and charging $100/hr or so to help people navigate their careers. Teaching at the university level could be fun as well, but I'm not in a rush - I want to spend at least the next few years in personal pursuits first. We will see.

Geographically, travel has always been important to me. At a minimum, I plan on spending my summers in Europe or traveling elsewhere. Winters I will probably also spend in some warm climate, be it Florida or Central America. I'm planning to just pick the country based on how I feel when the time comes!

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 12
9mo
iridescent007, what's your opinion? Comment below:

Thanks for doing the AMA Comp Banker.

What drove your retirement decision,  and what kind of lifestyle do you plan to live (assuming it's not Wolf of Wall Street style?)

Persistency is Key
9mo
CompBanker, what's your opinion? Comment below:

I've mentioned it a few times on these forums, but I actually live a really inexpensive lifestyle. I'm not a foodie whatsoever, i prefer not to drink alcohol (a few drinks a year), i don't care for cars/boats etc., and I like to fly under the radar when it comes to fancy clothing. The only thing I spend meaningful money on is rent, which is a function of wanting to live close to the office to minimize my commute. In retirement, this won't be a problem! So despite my annual compensation growing to 7 figures over the years, I have never really spent more than $100k/yr (if you normalize for rent). In fact, I've lived off my base salary alone since the start of my career, and I buy/spend on everything I actually want.

I think most people in this industry get absorbed by lifestyle creep. They go to very fancy restaurants, order expensive booze, buy expensive cars, fly first class, and otherwise live a life of luxury. While certain expenses are inevitable (supporting kids), there is an expensive way to do things and a cheap way to do things. I don't begrudge people who want to send their kids to private school, but it comes at a very real financial cost. I personally know with 100% certainty that I don't want kids. This lifestyle choice made it a lot easier to pull the ripcord and feel confident in my ability to retire.

I posted above about how I want to spend my time (hobbies / travel etc.). In terms of lifestyle, I don't have anything grandiose planned. It is amazing how much cheaper life becomes when you have time (aka, we spend a lot of money trying to win back the time that we lose making the money). Cooking at home is a great example. I finally have the time to look up a recipe, buy all the ingredients, cook it, eat it, and then clean up without worrying that I just squandered my night. Transportation is another. I really enjoy walking or cycling places - and now i don't mind walking 45 minutes to get to my soccer game whereas before I would be rushing to the game after finishing a conference call or email.

In terms of where to live - I don't intend to live in a high COL city anymore. I don't really see the point given my interests. I'd much rather travel around Europe and spend my summers discovering new cities and meeting people there. I have friends scattered across various cities in Europe and I plan on spending the next few summers visiting them, learning the language if i don't already know it, and enjoying life. In fact, I've already mapped out the first 3-4 years and discussed with friends! I'm certainly not on a shoestring budget but in some of these areas you can rent a huge place for 1,500 /month a live like a king.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 9
9mo
CompBanker, what's your opinion? Comment below:

I very seriously considered starting my own business when I was in my 20s (around the time I went to business school). My main desire to do so was to have freedom over where I lived and how I spent my time. I went back and forth between that and staying in PE for easily a year+. I even registered a website and told my friends in order to make it more real. Ultimately, I decided that after putting in 6 years in IB/PE, the 'grind' was mostly behind me. From that point, the compensation from PE was pretty much a sure thing while I could have epically failed as an entrepreneur. I actually make the conscious decision that I would just work in PE until I had enough money to retire early and enjoy my 'freedom' then instead of trying to achieve it through entrepreneurship. Looking back, I think I made the right decision for me.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
9mo
snowdaymoney, what's your opinion? Comment below:

How did your friendships with your hs and college friends evolve as you got older (obviously, this was when technology wasn't around)

Did they drop off immediately as soon as you graduated college / thought you would keep in touch but didn't / realised they weren't keeping up in terms of similar career choices / stay in touch with only the closest / stay in touch with only 1 or 2 / talk to once every 2 years / drifted but still acquaintances / still get drinks with them as a group if you had a group / all in a group chat now / all have kids so dropped off / live in different continents ... or are they solid business contacts?

9mo
CompBanker, what's your opinion? Comment below:

It is a good question and everyone's experience is different. I have friends that still hang out with their HS/college buddies and others that never speak to them. I'll share my experience but this is truly just a sample size of one. Also, Facebook came along when I was in college and everyone I knew joined, so we've had that element of social media. Most people no longer post though (myself included) and all the posts for the last 5-10 years have been of children.

Interestingly enough, many of my female high school friends went on to be quite successful while the male ones took on more blue collar jobs. For the females, we're talking MBB consultants, lawyers, MBA at Harvard, etc. For the men, ranges from engineers to working retail at the same place he worked in high school. Most of the women are all married with children and the guys are a mix of single / married without children. Anyways, I lost touch with nearly all of the guys shortly after college graduation. We just didn't have much in common and I wasn't interested in going to the bar and drinking. I also did my banking years immediately after graduation in another state, so I wasn't geographically proximate either. In terms of the girls, I still keep in touch with roughly half of them .. and by keep in touch I mean a call every 6-12 months to check in and provide life updates.

In terms of college, I wasn't in a fraternity or anything like that. I was a part of a core group of four guys and had an assortment of male/female friends from different circles. Sadly, I immediately lost touch with 2 of my 3 good friends. I'm still close with the other one though. We stayed in touch over the years, did dinners or went to sports games when we were in the same city, and have kept up with each others' lives. He was even going to visit me in Europe but COVID got in the way. He was never a 'business contact' - just a really solid friend and good guy. My parents have even gotten to know him and could spend time with him without me there. The female friends from college are a mix. I kept in touch with a few of them over the years. However, almost every single one of them stopped being social (with me and their girlfriends) the moment they got married. I am shocked at the number of people where the last time I saw them was at their wedding!! There is one friend in particular I keep in touch with who nearly has teenage children at this point (scary), but the rest have fallen away over the years. Note that none of these people is a solid business contact - while they are mostly business professionals, they work in completely separate industries.

So there are two other categories of people that you didn't ask about that are worth mentioning. MBA friends and friends made post-graduation. These have actually been my core.

MBA friends is easy. I keep in touch with a lot of them. I'm still going to weddings and holding FaceTime calls to catch up. We text back and forth more regularly. When I moved to London, I instantly had a group of friends from my MBA that welcomed me into their world. Whenever I visit a city, I would usually meet up with former classmates who were living in that city. Part of it is no doubt due to the fact that people from the top MBAs are fantastic at networking/staying in touch, and part of it is because we are on similar paths as business professionals. These people tend to be in IB, PE, consultants, entrepreneurs, or increasingly high-level executive positions. While part of the interactions are business talk, most of it is just friends hanging out the same way we did in our 20s. We talk about life, career, sports, people - pretty much everything.

And finally there are the friends I've made outside of school/work. My experience here has probably been a bit unique because I have moved cities six times since graduating from undergrad. Each time I moved, I've made a new group of friends. I will need to edit this post at some point to expand on this category, but I have met some really amazing people along my journey. In general, I have kept in touch with 1-2 friends from each of the cities that I have lived in. These are guys and girls that I really connected with and felt were very good humans. One of them, who I was particularly close with, would chat with me for 1-2 hours every single week for years even after we lived on different continents. To me, this was proof that while your friendships developed as a kid are very unique and special, you can still form strong bonds as an adult.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 15
9mo
KingKongHardo, what's your opinion? Comment below:

Super curious how you made friends each time in 6 new cities, it seems so tough outside of work if you don't know anyone in the city

Most Helpful
9mo
CompBanker, what's your opinion? Comment below:

You wouldn't be alone. Many of my friends have expressed frustration with making friends in new cities. Particularly as an adult, making new friends outside of school or work can be difficult. I'll share some anecdotes as well as advice.

1 - Get comfortable striking up a conversation with strangers. You won't establish a connection with everyone. You will find yourself in a number of awkward conversations. Shrug it off. Some of my best friendships have come from striking up a conversation with someone in an elevator or the lobby of the building I was living in. You'd be surprised at where you can meet people.

2 - Be helpful. Be kind. Be genuine about being helpful and kind. When I first moved to the midwest, I didn't know a soul. Every day after work I would go to a certain restaurant near my apartment by myself. The restaurant didn't have any TVs. I would sit at the bar, order dinner, and chat with the bartenders and restaurant staff. We would chat for a couple of hours and I would go on my way. Over the course of a few weeks, I got to know the staff and we started to build rapport. One day, at closing time, I offered to help them clean the bar, restock the fridges, and close up. I didn't mind - it was better than awkwardly sitting there while they did their closing responsibilities. After that night, they started inviting me out with them and other restaurant staff in the city. I eventually became friends with the whole group, regularly going to parties or inviting them to mine. Now, nearly 10 years after leaving the city, I still stay in touch with one of them and we have even visited each other.

3 - Acquaintances can turn into very good friends. When I first moved to London, I wanted to find football (soccer) teams to play with. One day while jogging through the park, I passed by a bunch of guys playing. Luckily, they invited me to join them, so I did. Turns out they play every week, so they added me to their WhatsApp chat and I became a regular. Out of the 20+ guys playing, there was one guy in particular I thought would be a good friend. Similar age, has an MBA, athletic, and appeared to be a generally nice guy. So I went out on a limb and invited him to join me and a couple of my friends for drinks. He meshed well with the group and has become one of my very best friends. I've since invited a second guy from football to join me for board games night, which is a small get together that I host every so often. He brought his wife, left his four kids (!) at home, and got along super well with the group. Now that we've transitioned from acquaintances to friends, I'm sure we will start hanging out more outside of football.

4 - An extension of the above concept… I randomly discovered that someone who studied abroad at Booth had moved to London. We had spoken a few times while she was at Booth, but didn't have any very meaningful interactions, and hadn't even chatted for about seven years. Regardless, I reached out to her. We met up and I gave her a book about all the best walking tours of London (COVID times). We had a nice chat so I introduced her to a female friend of mine who lived close to her and who I thought would connect. Lo and behold, they hit it off and the four of us, including the guy from #3 above, all hang out nearly every week and have even done trips to Europe together. It didn't take much, just a bit of courage to reach out and show a bit of kindness to someone.

5 - Last story. I moved to the south after graduating from college in New England. I didn't know a soul and I was an investment banker, with almost no free time whatsoever. Shortly after my moving in, one of my neighbors happened to have a block party. I decided to go. Well, turns out I was the youngest one at this block party by about 10 years, and the average age was around 50. So I awkwardly chatted with the older folks for a few hours and told them how I had just moved to the south. A couple of weeks later I received an email that read:  "Hi, so this is probably the most awkward message I've written in my life, but my parents are friends with Mr. and Mrs. (Jones) and they told me you had just moved here. Anyways, I'm having a party this weekend and would love for you to come." So I went and made a whole bunch of friends. Five years later, the same girl who invited me to her party invited me to her wedding.

I have dozens of stories like the above. The common theme amongst them is that I wasn't afraid to put myself out there. Plenty of my attempts at making friends have resulted in dead-ends. But as long as you are out and meeting new people, you will make friends. Be genuine, be kind, and people will gravitate towards you.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 24
9mo
Al's, what's your opinion? Comment below:

I'm not sure if you're still answering questions, but you wrote quite a bit about how great your friends from MBA are. Would you say that a top MBA is a cannot miss opportunity if the option arises? I'm a ways out, but I've thought a lot about whether the cost and effort would be worth it for me. 

9mo
Aristotle., what's your opinion? Comment below:

- What advice would you give to your 20-year-old self?

- Do you think sacrificing your social life during college to get a high GPA is worth it ?

- What's your favorite book ?

Thanks for doing the AMA 🙏

9mo
CompBanker, what's your opinion? Comment below:

Some good questions here. I'll answer the book question in a later post as the question was asked below as well.

In terms of advice to give to my 20-year-old self, I don't think I would do much different. To quote Boris Johnson, "we got the big decisions right." So my advice would definitely be to "stick with it" and "grind it out" in banking despite the immense desire to quit when the hours were long and torturous. I pulled so many all-nighters, left work each day after 1:00am, and lived with a perpetual throbbing headache as an analyst. There is no two ways about it - it was awful. However, it sets you up for a lifetime of success if you are able to grit your teeth and make it through to the other side. For many careers, your first job dictates your second job, which dictates your third job, which determines where you can get an MBA, and so-on and so-forth. While there are exceptions and pivot points (such as an MBA), it is amazing how much you are defined professionally by your first job. I highly suspect that had I not landed in banking, my entire career and earnings would have been substantially less exciting. It isn't worth sacrificing your long term health over, but if you can crush it during the first 2-5 years of your career, you will be set up for the next 30.

As for sacrificing your social life during college to get a high GPA … I think balance is important but it should skew towards academics for career-oriented people. If you think of it as a time allocation, I think 75% academics / 25% social is probably the right balance for the average person. Given the correlation between academics and your first job, I do think it is worthwhile to put in the effort to secure a strong GPA. That said, the difference between a 3.7 and a 3.9 is minimal from a recruitment standpoint but the social cost is generally quite high. So without contradicting myself too much, I'd say shoot for a GPA of 3.7+ but don't do so if it means having no social life whatsoever. Developing social skills is an important part of college and shouldn't be ignored.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 6
9mo
CompBanker, what's your opinion? Comment below:

It moved around a lot through the years. At the start of my career, I thought the number was going to be $20M+, but it adjusted down over time. I mentioned it in another post, but as long as you avoid lifestyle creep, you don't need $20M to live an impressive lifestyle.

I started looking at some other websites/forums about early retirement. A lot of people seem to be recommending an approach where you draw 3% of your savings per year and invest the rest. Depending on sequence of return risk, this will work for 30-50+ years. Using this model, there were people in their 30s / 40s trying to retire with as little as $1M in the bank. Personally - I think this is absolutely nuts and is too risky / low.

The thing about PE is that your carry pays out many years after you stop working. So you can theoretically have already hit your number, but not know it for certain. Given this, it is risky to retire if you are reliant on future carry payments to reach your target.

So to avoid your actual question as best as possible but still give some sort of response, I'd say I wouldn't have felt comfortable with less than $5M in the bank (realized, after tax).

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 11
9mo
Deal Team Six, what's your opinion? Comment below:

Thank you for doing this, you are a legend on this site and one of the most trusted users. I've read so many of your posts and they are always so well articulated and you clearly put in considerable thought to each one. 

1. Based on your background, I would assume you traveled across the country / globe a good amount and therefore it may have been hard to maintain a relationship. Did your SO come with you or did you not really seriously pursue anyone until you reached a certain point in your career / life? 

 2. What helped you reach your retirement goal after just 15 years? I am not on the traditional IB --> PE path but I would estimate you moved very quickly. Was it early carry at your fund, living below your means, just simply being smarter than the rest of those following a standardized cookie cutter career path? Were you the guy who banked every bonus in full as opposed to buying bottles? Any general financial advice would be helpful, because I anticipate I will be working much longer than 15 years unless I can successfully transition to PE asap. 

9mo
CompBanker, what's your opinion? Comment below:

I appreciate the kind words.

1. I don't think think the traveling puts much strain on relationships, but moving cities absolutely does. Early on in my career I had a long term relationship and was moving cities. I personally didn't think it was fair to ask her to move cities with me unless I was prepared to propose. She was a career-oriented individual and had no friends in the city I was moving to. Ultimately we decided to go our separate ways and are both probably happier as a result. To anyone in a similar spot, I strongly advise you to think carefully about whether this is the girl/guy you want to marry before asking them to move cities with you. Since then I've had a number of relationships but often find I enjoy the freedom of being single more than the benefits of a longtime partner.

2. I would say a combination of good decisions and a lot of good luck. I was fortunate enough to be granted very meaningful carry when I was 26 and the fund performed exceptionally well. I went on to get carry in other funds and each of those funds performed well above average. I was promoted along the way and my individual investments generated good returns. On top of all this, I have lived a relatively inexpensive lifestyle, which I outlined to a degree in an above post. Limited expenditures on food and booze, flying economy, staying in the Hampton Inn, and other similar decisions. I certainly wouldn't call myself cheap - in fact I almost always picked up the entire tab when I went out with friends to dinner and often hosted events at my place. However, I have always lived massively below my means, enabling me to bank part of my salary, my entire bonus, and all of my carry.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 7
9mo
BoBandy, what's your opinion? Comment below:

Hey Comp, congrats on hitting the big win. Your posts have always been great to follow.

On your second response, you mentioned receiving a significant carry allocation early on in your career. How big was the fund at the time of your allocation, and how have subsequent funds grown since then? How were you able to secure that carry allocation so early? Did you have a special relationship with the founder of the fund? Given the PE universe today vs. even 10 years ago, do you think PE is still a good place to build a career to try and replicate the success of someone like yourself?

I ask because I, along with a handful of friends, are increasingly doubting PE for other career paths and a few are leaving/have left. Some are going back to banking, others are pursuing corp dev, a few are joining strategy roles in funded startups and the rest are sleepwalking in PE while dusting off MBA applications to reevaluate their career path. Most of us are/were at funds that raised $300-750mm size funds and we are/were all associates/senior associates hoping that being in that LMM/MM space would unlock early access to carry, but for those of us that have received carry, it's been relatively insignificant, especially when you factor in the idea that PE is becoming more competitive and fees are/will be pressured down. Seeing your success and that of a few other online strangers produces a bit of cognitive dissonance with what seems to be a different PE landscape today. 

9mo
Deal Team Six, what's your opinion? Comment below:

+1 SB, I would give more if I could. I can't tell you how much I appreciate your feedback. 

Regarding 1, I am in a very similar situation. Potential opportunity to join my dream PE fund (tiny little LMM shop on the other side of the country but I interned for the partners in UG). Im deep into a relationship and trying to figure out if I extend an invitation to my SO in the event that I do pack my bags and leave. As you said it requires serious consideration. My logic so far has been almost identical to yours which I find heavily reassuring. 

Regarding 2, I am glad to hear you received excellent opportunities early on. Sounds like you were wise enough to find the right fund to join and used that as a springboard to continue the climb. Love that you lived below your means as well, it is something I have always tried to do. 

Thank you again for doing a Q&A, I hope your retirement is everything you hoped it would be. Don't forget to stop by WSO if you ever find yourself bored, I know we could all use more of your wisdom. 

9mo
CompBanker, what's your opinion? Comment below:

Thanks rabbit. Glad you found my posts from years past helpful. Also glad you're still here in WSO!

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

9mo
thebrofessor, what's your opinion? Comment below:

thanks for doing this!

Selfishly I'm curious as to the psychology behind it as retirement is a hyooj part of what I do

  • what caused you to make the decision (apart from the financial), was there a moment in time (vesting, liquidity event, argument with boss, health scare) that pushed you over the edge?
  • what worries do you have about it
  • how will you spend your time? Specifically I'm curious about the social circle as there aren't many young retirees, how you'll keep intellectually engaged, physically active, travel plans, philanthropic desires, all of that
  • roughly, whats your asset allocation in %?

i guess I'd just like to get inside your head a little, and I'm being a little vague as to my thoughts/predispositions because I don't want to lead you to an answer

thanks man!

9mo
CompBanker, what's your opinion? Comment below:

Ciao thebrofessor,

I had been contemplating early retirement for many years before actually pulling the trigger. I wouldn't say there was any 'event' other than a substantial liquidity event. However, it was all part of a plan that had been in place for a long time.

What worries do I have? … Well, this is a tough one. I don't live with any day-to-day concerns that keep me up at night (in fact I'm sleeping great)! However, there are a few risks that I know I will need to navigate in the future: (1) While I am confident I will not run out of money, I have chosen a very different path than had I continued to work and made probably $50M+ over the next two decades. I don't regret my decision, but I'll need to always live with the financial "what if." (2) I suspect I won't be employable in PE after a few years pass. What if I hate this life I have chosen? What if I get sick of traveling? What if I end up massively bored? What if I get injured and can no longer play sports, workout, and travel freely? (3) Technology / healthcare can change a lot in the next 50 years. I may find 20 years from now I cannot afford the life-extending synthetic heart. Or maybe they invent a really cool piece of hardware to plug me into the metaverse and I cannot afford it, having to instead settle for the 2400 BPS modem equivalent from our childhood days connecting to AOL! The future holds a lot of uncertainty and it will definitely cost money.

I answered this question above in terms of hobbies / travel / etc. But, as I'm sure you can appreciate, it will definitely involve molto Italiano :)

My asset allocation is theoretical at this point. I made a lot of cash last year that I have yet to invest. I'm concerned about putting it all into the market at once in the event of a recession. My future plan is to essentially buy a lot of dividend yielding, large-cap stocks. I should be able to live off interest/dividends of just 1-2% while preserve and growing the principal. At the moment I'm investing $5k / $10k every day with the objective of having it all invested over the next few years. That's my equivalent of dollar cost averaging. If the market craters at any point during the window, I'll go all-in with the uninvested balance. I may also take a portion of it and invest in some high growth stocks or throw it in an ETF, but all of that is undecided at this point. It's still early in the journey. I also rent out a property and have unrealized carry, so I'm at least somewhat diversified in that regard.

I'm happy to take any advice on asset allocation as I'm new to the whole game.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 6
9mo
Layne Staley, what's your opinion? Comment below:
CompBanker

I may also take a portion of it and invest in Layne's next deal

What a fantastic idea. thebrofessor there's room for you too.

"Son, life is hard. But it's harder if you're stupid." - my dad
9mo
thebrofessor, what's your opinion? Comment below:

Quali sono le tue seconde e terze lingue (imaggino che è italiano)? may be incorrect as I'm only like 2 months in...would love to compare notes

I love what you've said about lifestyle creep in the above comments, I see this in PWM too and you're very wise to avoid it

the worries bit I may have to ponder later, that's very interesting. I imagine I have several clients with your LNW, but probably 0 with your net worth at your age that built it themselves

if you've done the math and can live off a withdrawal rate of 1-2%, you don't need to worry about asset allocation that much, I'd personally just have 1-5 years worth of spending in cash/cash equivalents and the rest in a diversified equity portfolio (whatever your style, so long as it's diversified). I say up to 5y because you want to be able to ride out a downturn like 2000-2002 or 2007-2009 and maybe have some opportunistic funds in case you meet my wife's cousin when you're in Rome and want to buy a summer place to visit her (she is single btw). your single biggest risk is inflation, and unfortunately the best defense against that is living below your means and being patient with high quality stocks, just accept low returns for a bit until the Fed gets it under control

since diversification is a guarantee you will not get the highest return possible, there has to be a point. as I see it, the goal is to protect against the following

  • concentration risk - a single sector/stock blows up and gives you a permanent impairment of capital, this can be as specific as a single holding or as broad as TQQQ (because it's all tech)
  • weak stomach - often times having some part of the portfolio that's not sucking as much helps people stay the course, whether this be cash, dividend paying stocks, etc., though this is tough to gauge and is more art than science
  • sequence of returns risk - in most market environments you can be 100% equity with an emergency fund of 1-2y of cash and be totally fine, but if we go through a 2000-2010 or 1970-1980 environment and you're 100% SPY, your withdrawals will eat away your capital if you don't have other asset classes that you're withdrawing from. the magnitude of this is also highly dependent upon your initial withdrawal rate (as in since you're 1-2% of principal versus 4-5%, your risk is significantly lower)

and that's pretty much it. if every investor had a strong stomach I'd advise 100% of the funds not for emergencies to be in stocks (not just public, I also include private in this), and then depending upon your initial withdrawal percentage, have some amount of money in more stable stuff (cash at today's rates, maybe strategic fixed income, HELOC, etc.) so in case we do go through a lost decade you won't go bankrupt or have to go back to work. 

9mo
ZetaMale, what's your opinion? Comment below:

Really appreciate this and genuinely enjoy reading your posts as they are very insightful/relevant.

I'm always curious about these and I have no agenda here. It would just be great to hear from you.

1) What was your best day, week, or month in your career? Basically, where everything-or mostly everything-went your way.

2) What were the top 2-3 surprises in your finance career that you could not believe happened (whether good or bad)?

3) If you had a magic wand, what-if anything-would you have changed about your career?

Thanks again!

9mo
CompBanker, what's your opinion? Comment below:

1) That's hard to say. I don't think of my career in terms of days / weeks / months. I think of it in terms of key events. There are a few that stand out though:

- When I was 26, I was put on the board of a portfolio company that was underperforming (write down). Over the course of 18 months, did an acquisition that doubled the company's earnings and put it on a growth trajectory. The partner wasn't involved because it was a failing investment and I got to basically do an entire deal on my own. Definitely a 'fake it til you make it' scenario where I was negotiating a purchase agreement for the first time. Ended up selling it for a strong gain within two years. This company was definitely the one which made me feel like I was actually good at my job.

- When I sold my first portfolio company where I played a key role from the initial deal all the way to the exit. Was a really good feeling having seen it through the full cycle. It was subsequently followed by my first $1M+ carry payment, so the combination of the two had me on cloud nine for awhile.

2) Eh, there were a number of surprises, mostly negative. It was one of the reasons I decided to retire early - I didn't enjoy working day-in, day-out with some people. On the flip side, it is amazing how fast a portfolio company can go from 'bad' to 'good' or from 'good' to 'bad.' I was always surprised when companies that started off as losers turned into great investments, and of course the reverse.

3) Hard to say. If I were being truthful with myself, it would be walking away from unvested carry at a couple different points in my career. In hindsight, I gave up an 8-figure sum. Probably shouldn't have walked away from that. But I've mentally put this behind me and am very happy with where I ended up financially.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 7
9mo
ZetaMale, what's your opinion? Comment below:

Good answers. I'm sure you have covered 3--perhaps indirectly--in other forum threads, but it would be interesting to get in your head a bit on the decision process that led you to walk away from the unvested carry. Of course, I can completely respect your privacy if you'd rather not answer.

Thanks again, man. Really good color in this thread. 

9mo
Layne Staley, what's your opinion? Comment below:

Congratulations on your success. Along the way, you've positively influenced the lives of countless finance professionals, myself included. I sure hope this isn't a farewell post, and I selfishly hope that in your retirement you may continue to find yourself in this corner of the internet.

We're pretty similar in age. I've observed mostly two camps of peers: those who have "dug in" and stuck it out at a firm (IB or PE or consulting), gutting out challenges in growth pains or leadership or whatever; and those who have not, climbing the ladder by lateraling or moving firms. On the balance, it looks to me that the most successful at this age are those who jumped around very early (first 2-4 years post-undergrad) until they found a lane/niche/team that was a good fit, and then stuck it out there through thick and thin. Does this foot with your own experience, or that of your peers?

"Son, life is hard. But it's harder if you're stupid." - my dad
  • 6
9mo
CompBanker, what's your opinion? Comment below:

First, this isn't a farewell post. You should continue to see me here making contributions where I can.  Anyways, definitely a great question!

I've seen both paths work. I switched firms a few times, generally due to geography more than anything else. Had I skipped my MBA and just stuck it out, I would be a much, much wealthier man. I even liked the people too, but I really wanted to get my MBA and spend time abroad. So 'digging in' and sticking it out just wasn't for me. Others I know worked their way up from associate to partner at just one PE firm.

I will say, looking across my peer group, one of the biggest indicators of success is overall firm performance versus individual performance. I personally think it is pretty hard to get fired in PE if you're well liked by your colleagues and getting your work done. It is a 'team' sport, so very hard for people to assign blame for bad investments to a non-partner or even a partner. The more talented people do tend to get promoted faster, but not a heck of a lot faster, because promotions often occur around fund cycles anyways. So ultimately when a fund is deploying capital quickly, growing AUM, growing the team, generating carry, this creates opportunities for the non-partners to grow their own wealth and position. If I were to advise someone who was solely focused on climbing the ladder, my best advice would be to hitch your wagon to a successful, growing firm. Obviously much easier said than done and requires a lot of luck, but this seems to be the best indicator of success. (Note: it also means you should consider jumping ship if your firm is struggling to deploy capital / raise a fund etc.).

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 8
9mo
SafariJoe, what's your opinion? Comment below:

jmonkey21

Favorite books? From investing/self help/entertainment perspectives.

Great question

SafariJoe, wins again!
9mo
CompBanker, what's your opinion? Comment below:

I don't really read books on investing. I personally didn't find that they were useful in my actual job - most of the lessons taught weren't applicable to PE or I had already learned on the job.

Most of the books I read are either for pleasure or psychology / personal development (I hate the term self-help, which is often used in place of personal development!) Two that I found very memorable were (1) Moonwalking with Einstein and (2) Stumbling on Happiness.

The first is a book about memory recall. There are a whole bunch of them out there, as well as TED talks, that essentially promote the idea of a memory palace. The idea is essentially using unusual images that you associate with things you need to remember. It works shockingly well and I've always been a promoter of the method.

The second is a book about happiness. I've read a number of books on happiness but this one is the one I liked the most. I read it very early in my career. It would be impossible to even summarize it appropriately, but I do recommend that everyone takes the time to truly assess what makes them happy in life. Most people are very bad at predicting what will make them happy in the long run, so we all end up in a constant pursuit of things/experiences, only to be disappointed or dissatisfied shortly after getting them. I've am constantly doing a lot of introspection and adjusting my life to fit what ultimately makes me happy. In fact, this is how I've managed to avoid 'lifestyle creep' and was how I came to the conclusion that I should pursue early retirement.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 7
9mo
CompBanker, what's your opinion? Comment below:

Thanks for the questions itdoesntmatter. To avoid repeating answers, see my response to Symfuhny above (it was the 3rd or 4th question in the thread).

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

9mo
Hölder, what's your opinion? Comment below:

Congratulations on such a successful career.

With most of your life still in front of you what will you do now that you don't need to work 100 hours per week? Will you just relax in a low COL country? Would you use some of your retirement money for angel investing or otherwise still contributing to finance but without a full time operating role? Would you use your name and connections to directly back a start-up? I bet a PE veteran joining a start-up as the CFO could secure hundreds of millions of funding just out of your personal contacts.

9mo
CompBanker, what's your opinion? Comment below:

Thanks Holder. I've had a number of opportunities present themselves. I've had past executives I've worked with offer me a finance type role, an opportunity to build a startup with an MBA classmate, and a bunch of other opportunities that wouldn't typically fit someone with my profile. At the moment I'm enjoying my retirement too much to even contemplate doing something professionally. There are a couple of PE-type roles that I would consider doing, but unless it is something really exciting, I don't plan on jumping back on the corporate treadmill.

Random, but I've also thought about becoming a twitch streamer (for fun, any money would be upside). Ultimately I don't think I will because I'm not really interested in signing up for days in front of my computer.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 4
9mo
TheBuellerBanker, what's your opinion? Comment below:

Again, I appreciate your insights. Is the retirement more an indefinite sabbatical? In the sense that you aren't ruling yourself out of the workforce just yet and would consider rejoining whatever industry in a suitable role? For example, if a hypothetical CFO role opened up for you at a reputable company / a company which you were passionate about, would you take it? And if so, would it only be between after a set number of years or something? Thanks

  • 1
9mo
RonMexico1, what's your opinion? Comment below:

Thanks CompBanker, really enjoy your contribution to this forum. Had a few questions: 

1) How was your stint in Europe? 

2) What were the main differences in working in PE in Europe vs. the US? 

3) Will you be returning to the United States? Or staying in Europe? and why?

9mo
CompBanker, what's your opinion? Comment below:

I have SO many thoughts on the comparisons between Europe and the US. Could fill an entire thread with them.

1) I don't like to refer to it as a 'stint'! I'm still here. Europe, or more specifically London, is absolutely amazing. The thing I appreciate the most is the international aspects of the city. As someone who loves meeting new people and learning about their backgrounds, it is almost as if every single person in the city has a story that is completely unique. This makes social interactions that much more interesting and, from my perspective, the women that much more attractive/appealing. Again, I could write a whole book on this topic, but in general I feel much more at home in London than I felt when living in the US. It is a shame it took me so long to move here and validate something I suspected to be true for more than a decade.

2) Overall, my PE experiences in the US were almost identical to the ones in Europe. The same issues come up in every single deal. You're negotiating more or less the same things in the legal documents even though the terminology is completely different. People issues are people issues in both geographies. That said, there were a few noteworthy observations:

- It seems 50% of companies have a growth plan of 'expanding to the USA' given the size of the market. However, I was surprised at how little people actually know about doing business in the US. Most people didn't appreciate how certain industries are dominant in different cities (such as Tech in San Francisco, Energy in Texas, industrials in the Midwest). They don't know how healthcare works, don't appreciate the differences between federal / state laws, and have no idea what a 401k is. I wouldn't expect them to know any of this, but there is a very real gap in the market in terms of helping European businesses enter the U.S.

- The PE universe is very small in Europe, or at least in the UK. Everybody knows each other. Furthermore, information seems to flow rather freely. It takes very little effort to find out what multiple was paid for which business or even who is bidding on certain assets. I was surprised at the complete lack of confidentiality across the whole industry.

- Pay in Europe is substantially lower than the U.S. across the board. The difference is painful. But on the flip side, you get loads more holiday time and you can actually use it.

3) I am planning to split my time between the U.S. and Europe. If forced to choose between the two, I would choose Europe for sure. However, it makes sense for me to split time in order to see family, simplify my taxes, and reduce my expenses by leaving London (which is absurdly expensive).

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
9mo
MidMarketMcLovin, what's your opinion? Comment below:

Thanks for all your posts, they're extremely interesting. Re simplifying your taxes, can you expand upon this? Is the idea to spend enough time between different countries that you're not tax resident in any? I'm in Europe and thinking of pursuing a very similar path to yourself. Once I hit the number, retiring and spending the year between 3-4 countries sounds very appealing and would also lead to being non-resident in any if done right from what I've researched so far, open to correction on this though. Does being an American citizen negate all this, I'm not familiar with your tax system but remember colleagues with American citizenship doing their annual taxes despite not living in the country for years.

Funniest
9mo
CompBanker, what's your opinion? Comment below:

Mid-30s and nothing!

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
9mo
WolfofWSO, what's your opinion? Comment below:

Does money buy happiness?

(for those in early 20s, I already have my answer to this question)

Array

9mo
CompBanker, what's your opinion? Comment below:

Yes, sort of. Money obviously doesn't buy happiness directly, unless Amazon has figured out a way to sell that now too. My viewpoint is as follows:

- There is a base level of money that is crucial to avoid unhappiness. I'm talking about money to be able to afford to live in a reasonable place, put food on the table, take a basic vacation, and generally buy the things you want. Most professionals are above this financial threshold.

- As you go beyond that, money provide incremental happiness. It isn't life changing, but being able to afford a lot of conveniences certainly improves quality of life. I'm talking about being able to call an Uber instead of taking the bus, hiring a personal trainer, building a home gym, flying first class, eating out whenever you feel like it, and other such things. They are nice to haves and certainly make life more enjoyable, but they aren't the difference between happiness and depression.

- Lastly there is real "wealth." Wealth that provides you actual freedom and control over your time and schedule. No more reporting to a boss. No more bending over backwards to meet ridiculous client demands. The ability to do what you want, when you want to do it, without fear of interruption. This, to me, provides actual, real happiness. However, this sort of wealth isn't just about having money in the bank. There are plenty of people out there that have tens or even hundreds of millions, but no control. So the combination of wealth and being able to take advantage of it to achieve freedom - this is how money buys happiness.

People might find this controversial, but that has been my experience to-date. Most young people are in category #1 striving for category #2. Ultimately they achieve #2 but don't find themselves substantially more happy and conclude that money doesn't buy happiness. However, if you're able to accumulate enough money to achieve #3, then I think happiness spikes.

Note - all of these are ways in which money 'influences' happiness. It is not the only factor in the happiness equation. If you are in a horrible relationship, lack self-confidence, or lose a loved one - then no amount of money is going to supplant your unhappiness. But if the foundation is there, money can indeed make you happier.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 8
9mo
shakethatmoneymaker, what's your opinion? Comment below:

How do you make friends quickly? I will be moving this year for the first time in my life for college and that is something I am worried about.

9mo
CompBanker, what's your opinion? Comment below:

Entire books have been written on this subject. You'll need to find what works for your personality as well as the types of people you are trying to befriend. 

First, don't worry about making friends in college. Pretty much everyone is in the same exact position you are in. They are in a new city with no friends. They don't know what to expect and want to make friends.

Second, be yourself. Don't try to fake things. If you start talking to someone and they rave about how much they like basketball, but you don't like basketball, don't fake it. If you build friendships on a foundation that is ultimately fake, you will eventually find that the friendship is not very strong or you will have less fulfilling interactions with this friend. Establish genuine friendships and you'll find them much more sustainable.

Third, participate. You won't make friends by staying in your dorm room. Do things. Join clubs, Play sports. Invite people over to hang out. Sit down next to people in the cafe and strike up a conversation. Not everyone will respond positively, but you don't need 100 friends, just a few good ones. Move on if someone isn't responding well to chatter or reciprocating the friendship.

Do these things and you'll be fine. Heck, don't do these things and you'll still be fine. Either way, you shouldn't be worried.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 6
9mo
JoeCamel, what's your opinion? Comment below:

Congrats once again. Actually decided to do something entrepreneurial post mba from an M7.

I know you mentioned that you considered something entrepreneurial also in your late 20s. True, most entrepreneurs fail, but maybe someone with an M7 mba and a good background has a higher probability of success compared to your average entrepreneur.

From your mba class, how did your entrepreneurial friends do? Would they have been better off if they stayed in PE? 

Array

9mo
CompBanker, what's your opinion? Comment below:

We didn't have too many people go the entrepreneur path, and generally not those who did PE before their MBA. I can think of one person who 'failed' before graduation and ended up just fine. The others had varying amounts of success, including raising a ton of VC money and expanding their businesses nationally. One has even sold her business already. They have certainly made more money than any of the PE folks.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 3
9mo
Smoke Frog, what's your opinion? Comment below:

Can you share rough figures on your financial picture, since you said you now feel comfortable to retire?

Did you have a net worth figure in mind? 10 million?

How much do you have in retirement accounts? Taxable accounts? How much do you keep in cash? Do you use things like annuities or life insurance policies?

9mo
CompBanker, what's your opinion? Comment below:

I shared a rough financial profile in one of the posts above, including an approximate asset allocation. Regardless, I don't understand why people are so focused on other people's net worth. This information really isn't useful to anyone. Each member of this forum is going to have a unique set of objectives and corresponding expenses.   

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 4
9mo
Smoke Frog, what's your opinion? Comment below:

Ok thanks, I'll check above for the answer.

i think people just like hearing actual figures because we are all competitive and like comparing ourselves to actual numbers.

i love it how on bogleheads people give actual numbers when discussing things, but totally understand if you don't want to share.

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  • Anonymous Monkey
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9mo
Anonymous Monkey, what's your opinion? Comment below:

The legend of legends. Thanks so much for your myriad contributions to the community over the years, and to me in particular. We all salute your navigation of the Wall Street jungle to quote Monkey Business. Congrats on all your success and best of luck on the next stage of your life!

9mo
CompBanker, what's your opinion? Comment below:

Thank you sir!

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 1
9mo
WallStreetOasis.com, what's your opinion? Comment below:

Yes, truly a legend of legends! It was great catching up with recently and I'm not one bit surprised at all of your success (career wise and life decisions).  If you ever make it out to California, you can crash in our basement and get woken up at 7am by three kids scampering around above you...

Thank you again for all of your contributions to WSO over the years and being such an awesome member people can count on for brilliant advice.

THANK YOU! 

Patrick 

9mo
CompBanker, what's your opinion? Comment below:

Thanks Patrick. It was great catching up over zoom after all these years. My how old we've become! And I appreciate the gracious offer to suffer through an evening with three young kids - I think I'd rather take my chances on the street!

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 2
9mo
Deo et Patriae, what's your opinion? Comment below:

Thank you for doing this.

1) How would you describe your childhood?

2) What is your favorite "go-to" story, one you like telling over and over?

3) If you could travel back in time to any country and any era, knowing you'd be completely safe and could come back, where and when would you go and why?

4) What is something that you have changed your mind about over the years? (does not need to be career related)

5) If you could thank anyone, who would you thank and why?

9mo
CompBanker, what's your opinion? Comment below:

Interesting questions, although perhaps a bit odd…

1) I was very independent as a child. Lots of support but limited oversight - left to figure things out on my own and keep myself entertained. It was normal in the sense that I struggled with all of the same issues you'd expect from a suburban kid. I definitely wasn't part of the cool kids in high school, but I had a solid group of friends. We partied, played sports, and all of that.

2) My favorite stories to tell are the ones about how I made friends when I moved to different cities. I made a post with some of the stories above in response to a follow-up question. I like these stories because I think they offer support and encouragement to people who are alone and want more social engagement, but are unable to find it. I've also made friends in somewhat unconventional ways, which I am proud of.

3) I've always been a bit of a Dungeons & Dragons fan, so it would need to be Medieval times in Europe (in general). I like the idea of an unchartered world that still has a lot of mystery to it. Nowadays we have satellite images of everywhere on earth and there are so few things that remain undiscovered. I think it would be fascinating to rediscover the planet and live in a time without technology. A time when your cleverness and cunning could make a big impact on your life. Of course, I probably wouldn't enjoy being a peasant in this era, so I would want to be a minor nobleman or something like that. Maybe some neutral role that never gets you killed like the town blacksmith.

4) I have changed my mind about a lot of things over the years. I'm hardly the same person I was at age 20. Some things are just minor preferences - I used to hate the idea of living in a city, but now I couldn't imagine living in the suburbs as a working professional (retirement is different). Early in my career, I swore that if I got married, it would be a dealbreaker if my wife didn't want to work. Now that is less important. I also used to think a 10+ year age gap between couples was crazy, but I've since realized it doesn't matter. So to answer the original question - many things, big and small.

5) At the risk of sounding cliche, the person to thank would be my dad. I'm not just saying that because he is my dad and everyone is supposed to admire their dad - mine is actually amazing. He has incredibly strong morals, better work ethic than I ever had, and would do everything anything he possibly could for his children, without hesitation. Just an overall incredibly good person. I definitely got lucky.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 7
9mo
marcellus_wallace, what's your opinion? Comment below:

Congrats on the retirement man, remember your posts way back when you first started posting here. Great thread and content as always. Gotta ask based on your responses seems you are still fairly detached and not settled into family/kids yet maybe I am wrong and missed something. If so, do you plan to pursue and take time in that part of your life now. If already settled down, were they apart of your decision process to retire early.

9mo
CompBanker, what's your opinion? Comment below:

Your assumption is correct. I feel pretty strongly that everyone should pave their own way in this world based on what they individually value, regardless of how it is viewed by society. Society seems to place immense pressure on people to get married and have children. Somehow that has become the 'goal' we are all supposed to strive for. For me, while I have had relationships with wonderful women, getting married is not a priority. I'm not opposed to it, but I'm not willing to settle just to check the box.

Another way to think about it is the idea of BATNA, or best alternative to no negotiated agreement (people who have taken a negotiations course will know this one). It basically measures your next best alternative outcome. As someone who is very happy with single life, I need a very compelling reason to get married because my alternative option is good. So until I find myself staring into the eyes of my dream girl, I will continue to enjoy single life.

I mentioned it in one of my early posts above, but I'd actually encourage others not to rush into marriage. People change a lot in their 20s, particularly in the few years after graduating from college. What you look for in a partner similarly changes a lot during these years. Sometimes this works out and strengthens relationships, but often times I've seen this weaken relationships. Note: Don't go breaking up with your partner because you read a post by a stranger on the internet that says you should wait, but do take the time to re-assess your values before you make a potentially lifelong commitment to someone who may no longer be the perfect fit that they were when you first met.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 7
9mo
CompBanker, what's your opinion? Comment below:

Going to follow-up my own post with another to share an anecdote that may shed some light on my thinking. When discussing my retirement plan with my parents, they asked me:  "But what if you meet the perfect girl and she doesn't want to subscribe to your lifestyle of a retired man in his 30s?" My response was: "If she isn't comfortable with my living this life, then she isn't the perfect girl."

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 2
9mo
Teller in Branch - Personal Loans, what's your opinion? Comment below:

Congrats on your retirement after just 15 years - that's impressive. Wish you the very best with the next chapter.

Might be an odd one, but given your experience in PE and the growing global interest in private credit - particularly direct lending - could you please discuss how were some non-bank direct lenders able to build good relationships with you and your team? Particularly interested in those guys that were on your speed dial to send NDAs / CIMs to when you have a new deal on your desk. What separated the best from the rest? Presumably, many lenders were new shops on the block that have proven themselves capable over time. Why did you decide to partner some but not others? Thank you for the insight in advance!

VP
  • 3
9mo
CompBanker, what's your opinion? Comment below:

Choosing the lenders for deals differed at the various PE firms I worked at. In one case, the lender selection was left to the junior members of the deal team and the senior guys didn't really care. Unless a senior person had a negative experience with a lender, they wouldn't veto nor push for any lender in particular, and they certainly wouldn't get involved in any of the lender document negotiations. At another firm, one of the partners in particular managed most of the lender relationships and would run a full lender presentation to solicit bids from multiple firms. This partner negotiated most of the terms and had the final say in lender selection.

From my personal perspective, the lenders were essentially undifferentiated in nearly every way. I picked lenders almost exclusively on the basis of whether or not I liked working with the people, or in some cases, whoever had reached out to me most recently. I don't mean to be too negative on lenders, but I would get hit up literally daily with firms that wanted to introduce themselves, existing relationships who wanted to check in, or people I had met with but not yet done a deal with. I never, ever mistreated lenders, but they were more of a distraction than a value-add. At the end of the day, I never had a lender refuse a deal because i hadn't met with them before, and I never had a lender agree to do a deal they didn't want to do on the basis of maintaining the relationship. As a result, I always viewed the return on time invested as low.

The best way I've seen lenders get the fast track would be if their organization was ALSO a limited partner in our funds. If you're an LP, you almost always get the first look. Alternatively, if you'd done a few deals with us in the past, you'd also get preference due to ease of documentation. But for a lender looking to establish a new relationship, there really aren't many things you can do to differentiate. That said, it didn't matter to me, but I know there are PE professionals out there who will steer deals towards those who take them to sporting events and nice dinners. 

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 7
9mo
TheBuellerBanker, what's your opinion? Comment below:

 When you say a lender also being an LP, what were some examples of this? Like how could an Owl Rock or Golub be an LP in the fund given it's not their mandate? Or unless these are smaller LP roles they took to enhance the relationship angle with a fund? Unless I'm totally misunderstanding.

9mo
nightowl777, what's your opinion? Comment below:

Many others have said it better, but thank you for your presence on WSO over the years - you definitely helped my career grow and got me to think about life/career differently than I would otherwise.

Several of your posts hit on the importance of the "softer stuff" (office politics/relationships vs. grinding, finding and creating mentors in and outside of your firm etc.) which I've not seen talked about as much on WSO. So to try to fill that void before your break: 

  • What has been critical to your success in navigating office politics or creating relationships with higher-ups that help them want to help you progress? Anything you used to do or believe in that you now see in hindsight as a faux paux?
  • What has been critical for you to find real mentors outside of firms you've worked at? What is important to you in committing to investing in a mentee when people reach out to you cold for advice? 
9mo
CompBanker, what's your opinion? Comment below:

You're right that the softer stuff is very important to career progression. I made a number of comments on the topic in the CompBanker: Then & Now thread. (https://www.wallstreetoasis.com/forums/then-and-now-compbanker)

To your specific question, I don't think I was particularly good at office politics, and definitely not early in my career. I hate the topic and I hate the idea of modifying my natural behavior to influence people. Unfortunately, I've seen office politics influence my own and others' success throughout their career. The reality is that putting your head down and grinding does not guarantee that your efforts will be recognized. Some tips based on my experience, which may be controversial, but hey - that's why they are considered office politics:

- It is important to be liked. When someone likes you, they will give you the benefit of the doubt. You could show up late to every meeting and your friends will have your back, assuming you were on an important call or cranking through work. If they don't like you, they'll assume your being late was because you're unreliable or lazy. Same exact action, but different reactions based solely on like ability. So invest the time in getting to know people and go out of your way to make their life easier.

- It never helps to make enemies in the organization. Lots of gossip happens on business trips or behind closed doors and you won't be there to defend yourself if someone is saying bad things about you. Never give them the option. Be super nice to everyone. If they are frustrated by something, agree with them even if you feel they are wrong. Offer them encouragement and laud them for the things they do well.

- Always be neutral in group settings. If two factions emerge within the organization, you want to be Switzerland. Agree with people 1on1 but don't take a strong stance in the group setting. Caveat your comments to demonstrate that you understand the opposing point of view even if you disagree with it.

- Give credit to your teammates, even if you did the work. This may sound counterintuitive to some, but people within the organization generally have a very good feel for who is pulling their weight and who is underperforming. You'll win over your juniors and your seniors will appreciate your positivity / team-oriented approach. When you manage other people, it is annoying when one of them tries to take credit for everything … so don't be that guy.

In terms of mentors outside of the firms I worked at - I didn't really have anything like this. I've always been rather independent and have guided myself along the way. That said, my parents were helpful in thinking through the big life decisions such as geographic moves or my retirement. I also had a very close friend that was not in the industry. I would complain to her and talk through the interpersonal dynamics, which was helpful in enabling me to keep any negative feelings out of the workplace. Her personality and life view is very similar to mine, so her advice was always consistent with what I prioritized and valued.

On the flip side, I've spoken to so many people over the years about their own career paths - many from WSO. I've mostly found that I enjoy advising the people who actually want advice, as opposed to those who are just looking to confirm the decision they have already made. The difference becomes very obvious in the way that they react to advice (curiosity vs refuting the position). I also admittedly prefer to help people that have put in the effort themselves to position themselves for success. There is a huge amount of information available online, whether on this forum or elsewhere. I get frustrated when people ask questions when the answers are readily available to them if they just did a bit of googling. So make sure that you use your mentor to obtain information or viewpoints that you cannot get anywhere else. So do your research before you chat with a mentor, and demonstrate a willingness to put in the work once they've given you advice. Oh - and - be sure to follow-up. I hate spending hours helping someone only to have them disappear into the ether. Send a note explaining where you ended up - even if it is six months after you spoke to them.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 6
9mo
CompBanker, what's your opinion? Comment below:

I'd also like to provide an anecdote to illustrate the point about finding a mentor. It is pretty critical that they share or at least understand your priorities and values.

I hired a personal trainer once. He asked me what my objectives were. I explained how I didn't really care for huge muscles, but wanted to improve muscle tone and maintain stamina. Unfortunately, he didn't listen. His words of encouragement centered around being 'huge' - because that was his personal objective for working out, even though it wasn't mine. He measured my biceps and told me how I was going to be able to lift up women with one hand (I was in a long term relationship at the time). After five sessions, I stopped using him. He was trying to project his own vision of 'success' onto me, and his workout advice was therefore tailored inappropriately for my own needs.

Mentor/mentee relationships are a lot like the personal trainer relationship. If your mentor thinks making as much money as possible is the key to happiness, their advice is likely going to point you in that direction. It is therefore important to find a mentor who sees the world through the same lens you do, or at least has the capability to separate your desires from their own. This particular skill is very challenging for highly successful people to master and one I personally took many years to learn.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 6
9mo
123xX, what's your opinion? Comment below:

Thank you for sharing your valuable insights! Being surrounded by business owners and seeing their journeys, did you ever regret not following the same path?

9mo
CompBanker, what's your opinion? Comment below:

I think I can say with high confidence that I did not and do not regret not going down the entrepreneurial path. I know that a lot of entrepreneurs fail and that it involves a tremendous amount of hard work. I wasn't willing to take the risk and I don't assume that I would have been successful. It probably would have been more fun and dynamic, but I'm happy with the way things worked out for me.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 1
9mo
gryphus, what's your opinion? Comment below:

CompBanker, thanks for everything over the years. With all the demands of the job, how did you find time to truly relax and reflect? 

I'm finding that even 1 - 2 week vacations are difficult to get true disconnection, and I enjoy the work and my firm. But at times I feel like I have difficulty keeping perspective or get wrapped in a work personality. 

9mo
CompBanker, what's your opinion? Comment below:

I really struggled with disconnecting in my early years. Work was the most important thing in my life and I was willing to make most any reasonable sacrifice to focus on my career. This meant bringing my laptop with me on vacations, responding to emails late at night, working full weekends, canceling plans, or whatever else I needed to do in order to success professionally. Disconnecting was hard, if not impossible.

This changed with time and seniority. I would say that being able to disconnect from work requires a certain mindset. One where you are secure in your position, confident in yourself, and place value on things beyond your career. If you are worried about losing your job, getting a promotion, or otherwise lack confidence in your performance, you will struggle to disconnect. You won't be able to convince yourself that you can put off work, that you can go into a meeting without knowing all the answers, or any one of a million other pressure points people put on themselves.

So there really isn't a method or trick to disconnecting. You need to get to the point where you are okay saying: "I'll respond to this email tomorrow" or "They aren't going to fire me if I don't get this done by the ridiculous deadline." If you are able to achieve this, you'll find that you don't need to take a vacation to disconnect. You'll be able to relax at night, on weekends, or when you are away on vacation. This should be your objective - because you don't want to be living a life where you are relying on 2 weeks a year of vacation to relax. 

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 7
9mo
CompBanker, what's your opinion? Comment below:

Hi mooyi. Reflecting on your question, the women I've worked with were very outliers in terms of performance - they were either the best of the best or the worst of the worst. I'll give some examples:

The best Investing Banking associate I ever worked with in banking was female. She was super efficient, always willing to help out, and very kind despite the demanding environment. She ultimately left the industry to raise a family, but I imagine she would have been a superstar had she continued along the path.

The best board member I ever worked with was a retired woman who had served on a half dozen boards of other PE firms, each of which generated a great return. I loved working with her. She was no nonsense (she was German). She didn't care about office politics or hurting anyone's feelings - she cared about getting things done and getting them done well. She held our CEO accountable, applied reasonable pressure where necessary, and wasn't afraid to speak up and take action. She also had a very good head on her shoulders in terms of making good decisions. If would literally put her on the board of any portfolio company if I could. A true gem.

The best "non-partner" lawyer I ever worked with was a woman. She had a lot of patience and never complained. She had a very solid memory and wasn't afraid to make decisions without running it by the partner on the deal. Her husband worked as well and they had kids, but she never pushed back on deadlines and was always available. We had a lot of 11pm and weekend calls, many of which were initiated by her. I always felt well covered on legal aspects of deals when she was on the deal team.

I also worked with a couple of really competent women who did in-house business development for my PE firm (I'm talking about meeting with bankers, etc.). Exceptional ability to build rapport and maintain relationships with literally hundreds of bankers at the same time. Impressive.

I won't talk too much about the women on the other end of the performance spectrum, other than to say that as a woman, you need to try extra hard not to fall into the negative female stereotype. People are very quick to judge, particularly when judging women, and you may struggle to win people over once they've built a negative narrative in their head.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
9mo
CompBanker, what's your opinion? Comment below:

I'll entertain this question even though it feels like a troll post.

No, I don't own a Porsche. There are a thousand things I'd rather spend my money on. If someone were to gift me a Porsche, I'd sell it and buy a bicycle. I don't begrudge people who want to spend money on cars, but I'm not a car person and never will be.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 2
9mo
CompBanker, what's your opinion? Comment below:

This is a hard question to answer. The best tip I can really offer is: When facing something you don't want to do, you need to convince yourself to just "get it done," because it isn't going away. This applies to everything in life, from cleaning your room to writing an investment memo. I certainly haven't perfected it, but having incomplete tasks that I don't want to do looming over me can be crippling. Just knowing I have tasks to do ruins my enjoyment of other things - it damages sleep and basically haunts you. When I finally get around to doing the task, almost inevitably it isn't nearly as bad as I had mentally envisioned it to be. So dig deep and embrace a mentality of 'just get it done.'

If you are unable to do this, there are some things that will help. When I'm in the middle of procrastinating, I don't allow myself to do anything unproductive. No TV shows or games or anything. Usually this means I'm cleaning my apartment, paying bills, or doing literally anything on my "to-do" list that isn't the task that I'm procrastinating. By the time I reach the end of my "to-do" list, I'm forced to do the thing I've been putting off - but I haven't lost any time because all my other to-do items are done. It's a bit silly, but I call this "productive procrastination."

Separately, I truly believe in the power of just getting started. I used to really hate writing CIMs, investment memos, or anything that involved a lot of text. I would really struggle in an effort to write each sentence perfect the first time around. Eventually I realized I could work so much faster if I just threw whatever thoughts came to mind on the paper and didn't stress out about making it perfect. After everything was written, I would go back and edit the language. Surprisingly, I often found that the initial language was really good and didn't require too much work - I was just psyching myself out trying to make it perfect instead of just writing. Writing aside, the strategy of 'just getting started' is very important regardless of the task. 

As for learning, the key in my opinion is that you must WANT to learn the material, otherwise you won't remember it. This applies strongly with things such as learning languages - your memory is going to really suffer if you don't personally want to learn it. Finance and work-related things work the same way. Attitude matters and will influence your retention. So if you are trying to learn something because you feel like you have to rather than you want to - drop that subject and focus your efforts elsewhere. I never took the CFA - but I believe most people will struggle to pass if they don't actually feel like it is something they want to do (this probably isn't groundbreaking).

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
12d
TheCleaner, what's your opinion? Comment below:

Agree with all of the above. I especially love the productive procrastination tip, also recognize that you can not focus fully for more than 1-2 hours at a time anyway so might aswell clean something when working home. Just do not get carried away with your time, its your most valuable asset.

Some other pragmatic implications I have tried, liked and sticked with:

1) Cut out all digital distractions for 6 months. You will get more enjoyment out of work and life experiences in general. To avoid temptations, use freedom.to which allows you to block apps, websites, and all that stuff on all your machines. Just buy a license and you are set for life. If you do that for 6 months, there will be zero craving by no procrastination because your craving for distractions disappear. Btw, I am not saying do not have fun, make sure you get social time in, do a workout, call a friend/family, date a girl or 

2) Cap of your evening with 30m reading on a topic you cite above. Great to get your mind off things and you get some reading in which will translate to skills if practiced.

9mo
CompBanker, what's your opinion? Comment below:

Hi packmate. Take a look at my responses to thebrofessor above for a discussion of my investment plan!

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 1
9mo
Masallery, what's your opinion? Comment below:

Are you married or involved in a relationship currently? How is this part of your life working out / evolving over the years, as you move around cities and maybe making life decisions? I know that in your previous replies, you mentioned that you previously parted with a girl that you had been with for many years. 

9mo
CompBanker, what's your opinion? Comment below:

I'm not really sure what to add beyond what was shared in the posts above. Not married nor in a relationship at the moment. I've been in a number of relationships since college … some short, some long. Almost all of them were with really great people. Outside of my one very serious relationship, I have purposely avoided anything too serious over the years because I knew that I was going to make geographic changes. Many of the city moves were planned before I even arrived. For example, I was pretty certain that I wasn't going to stay in Chicago after my MBA and I didn't want to find myself in the same situation - a situation where I was moving and had to ask a girlfriend to come with me. As a result, I was free to make big life decisions without interrupting anyone else's life.

Going forward, we will see where life takes me. I'm no longer beholden to a job and therefore a geography, so I have a lot more flexibility. That said, I have no idea how women will respond to a retired/unemployed guy in his 30s… maybe I've made myself completely undateable. I'm not too worried about it though - I truly believe that life is about the journey not the destination, and I'm enjoying the ride.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
9mo
IB Associate, what's your opinion? Comment below:

Thanks a lot for doing this and fascinating answers. A couple quick questions: 

1. I know you touched on how you would manage your wealth. Unless I may have missed - at what point (if ever) would you consider a private wealth manager? Would they give you access to other investments (PE/VC) that you would like to have exposure to? It seems like top VC firms have had great returns lately - any interest in allocating there and if so, how would you do it? 

2. What's your view on the PE sector going forward? Do you think higher interest rates, high valuations and amount of capital chasing limited number of deals will reduce returns over time? 

3. Related to number 2. It seems like PE firms keep buying assets/portfolio companies from other PE firms and to then sell to another PE firm etc. What's your take on this dynamic in terms of how it may affect these companies and broader economy in general? Do you think it is "risky" for PE firms to buy platforms now given valuations and where we are in the cycle?

4. What sectors were you focused on and were there any that you found more interesting than others? 

5. You mentioned at one point that some of your friends who were successful as entrepreneurs were more successful than even senior PE employees. Any idea of the delta? For your friends that are entrepreneurs and may have a high net worth on paper, have they been able to cash out at least partly prior to a sale or an IPO?

Given your experience and great insights I may have other questions. Thanks again and congrats on taking time off. 

9mo
CompBanker, what's your opinion? Comment below:

1) I actually spoke to a private wealth manager recently. I don't think I would ever feel comfortable paying a PWM to manage my wealth. I don't have a really good appreciation for their full value add, but it is hard to imagine it would be worth it for me given I possess a high degree of financial literacy and a fair amount of free time. Perhaps if I needed some advanced tax planning help like setting up additional trusts, but I don't personally foresee that need. The access to PE / VC funds that I couldn't achieve on my own is definitely interesting, but when I talked to the PWM guy about this, he indicated that they have their own fees which are layered on top of the PE fund's fees. Not sure I would want to swallow 2/20 AND PWM fees … that's a whole lot of middlemen taking a cut before I see a penny.

In terms of allocating to top VC firms - that's not really consistent with my model. First, I don't know how I would even access it as I'm not prepared to make a $2M - $5M or whatever minimum commitment is necessary to get access. Second, the VC model is too volatile for me. Given I'm living on this money for my dividends, putting a few million in a VC which could blow up in 15 years is too much concentration. The upside isn't worth the downside - I'll stick with broad market diversification and just accept likely lower returns.

2) I mentioned it above, but I think the PE sector remains very attractive. I don't foresee this changing at any point in the future. The biggest risk is that carry gets taxed as ordinary income rather than capital gains, but even with that change, it would still be lucrative / worth it. In terms of things such as higher interest rates squeezing returns - if you run the models, interest rates don't actually have a tremendous impact on returns. Sure, every bit counts, but the difference between L+650 and L+800 actually isn't that huge unless you're using an absurd amount of leverage. As for high valuations, this could actually increase returns (hear me out). Simplified Illustrative Example: 10 years ago you could buy a small manufacturing company for 5x and sell it for 5x. As a result, every $1 of EBITDA growth netted you a $5 return which was split 80/20 LPs/GPs. Fast forward to today and the same company requires a 10x multiple to buy/sell. Now, every $1 of EBITDA growth results in a $10 return. For anyone that invests in high growth businesses, higher entry and exit multiples can actually help. On the flip side, the higher multiples means the impact of using cash flow to pay down debt is lessened. I therefore think what you'll see is that growth oriented PE shops will outperform those who are reliant on debt pay down to produce returns.

3) I've never had an issue with PE firms buying from other PE firms (at least in the middle market). As a new investor, you are wiping out the existing capital structure and putting a brand new one in place. So you're pretty much indifferent to the existing capital structure or the fact that the company is already owned by a PE firm. You probably lose the 'low hanging fruit' that comes from being the first institutional investor in a business, but that is only so valuable. Just an anecdote - throughout my career I can think of a few businesses that traded amongst PE firms 2-4x. These businesses grew a lot for each PE firm and most of them made a killing as the business grew. So don't think just because you're buying from another PE firm that you won't get a good return.

As for it being 'risky' for PE firms to buy platforms now given valuations and where are in the cycle … people have been saying for 5 years that we are due for a recession. It's always risky. PE firms cannot just sit on the sidelines and wait out a recession, they need to keep going. Besides, LPs compare you to other funds of the same vintage which are investing in the same market environment. As long as you beat out your competitors, you'll be able to raise another fund and do well long term, even if you get unlucky with a recession.

4) By the end of my career I had invested in a lot of different sectors, with the heaviest focus on industrials, healthcare, and tech. I personally found tech the most interesting, but I am a bit of a geek and really enjoy things such as building PCs and coding. Healthcare I found challenging in the US but much, much easier in Europe. The complications associated with healthcare payers in the US (read: Medicare, Medicaid, Private Insurance, Private Pay, etc.) require both sector knowledge and continued study, making it difficult to play in US healthcare unless you are a specialist. Industrials is a really significant market in the US and you get to explore the dynamics of offshore manufacturing in China / Mexico (and a bit of Eastern Europe). In the UK it is less pronounced given the service economy - but there are plenty of opportunities in various European countries (for example, Italy).

5) I don't know the exact figures, but some of the entrepreneurs my age walked away with as much as 9 figure sums when they sold their businesses. I'm not talking purchase price, I'm talking their personal take. Most fall in the mid-8 figure range though. Obviously it varies widely - but the numbers aren't small for those who are successful. I don't know what % of those who cashed out prior to a sale/IPO, but I don't think any of them had more than a few million in the bank until the liquidity event. This is more of a guess than hard facts though.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
9mo
afsfasf, what's your opinion? Comment below:

What's your thought on becoming a career LP?

Array

9mo
CompBanker, what's your opinion? Comment below:

I don't know a lot about life as an LP - and I imagine a lot of it depends on the type of LP. LPs can range from high net worth individuals, family offices, insurance firms, endowment funds, fund of funds, and other entities. I'm guessing the experience at each of these types of companies is rather different. I'm going to have to defer on this one - I'm not really well positioned to answer it.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 2
9mo
SacrificingAdolescentYears, what's your opinion? Comment below:

What are your top tips for improving yourself mentally? I would stress tips for time management / avoiding procrastination, learning in general, psychology, and more.

9mo
Nitemare12345, what's your opinion? Comment below:

Thank you for doing this - your insights are always extremely helpful. What advice would you give to a new VP in PE? For context, background is someone who did the traditional banking analyst program + a few years as an associate / senior associate at a MM PE firm with direct promotion. I think this background is common enough for your response to be helpful to a broad group of folks here. Thanks again.

9mo
CompBanker, what's your opinion? Comment below:

Hi Nitemare12345,

My first piece of advice would probably be to find ways to give yourself exposure to senior learning opportunities. This generally means volunteering to 'do stuff' or at least ask to join the partners at various meetings and activities. For example, if the Partner is going down the street to meet with an LP, ask if you can join. Even if all you do is carry his bag, you are building your network and understanding what is discussed in these meetings. Similarly, if you're meeting with an acquisition target, ask if you can be the one that delivers the 'pitch' of your PE firm. You're in a partner-track position as a VP. Good Partners will want to groom their VPs and should encourage you to partake in these sorts of activities. I always had a lot of pride when a junior guy stepped up and did a really good job delivering a pitch - it shows well on both you and the firm!

Second, you aren't in that position for your analytical skills. Be careful allocating too much of your time doing intense analytics or fixing up a presentation. You proved you could do this as an Analyst / Associate, so you don't really gain much by demonstrating command of these aspects of a transaction. You have junior guys to do this for you - make sure you understand it all but don't lose too much time here. You should be trying to 'play up' as much as you can, rather than 'play down.' This is difficult for a lot of people because it is easier to play down and do tasks that you've already mastered versus take on new tasks and risk screwing up, but you'll stagnate if you don't challenge yourself.

Third, it is really hard to make an irreversible mistake, so don't be afraid to make decisions. Any decent lawyer will be able to tell you where the landmines are in a legal agreement - a VP with limited experience could negotiate one with 90% effectiveness just working with the lawyer. The Partner doesn't want you running to him/her every time you need to make a decision. Sure, run the really important things by him/her, but 99/100 times (s)he couldn't care less about the type of arbitration used in a working capital dispute. This is true not only for legal negotiations but also for pretty much all aspects of the deal, unless the Partner is an extreme micromanager, in which case … that is great while you're learning, but will stunt your growth after the first 1-2 deals as a VP.

Note: The exception to this is that every PE professional has been burned at some point in their career by something dumb. Maybe they didn't have an anti-sandbagging clause in the SPA and the buyer pulled a "gotcha" suing them the day after close. Figure out what these issues are for each Partner (or the firm in general) and make sure you avoid them. Otherwise, you're good to go.

Fourth, speak up in meetings. Don't always defer to the Partner, particularly if you know the answer to something. Don't assume the Partner always knows the answer - you can bail him/her out by stepping in, particularly if they are giving a non-answer (although if you want to be a PE Partner, you better become an expert at answering every question, even if you don't know the actual answer!!!)! Similarly, as a VP, you have a point of view that is at least based on 4-5+ years of experience. You start to have credibility at this point, particularly if you can reference past situations where you've encountered similar issues and clearly explain how you successfully resolved them.

Fifth - be articulate. This is important for everyone at every point of their career, but definitely true for VPs who are trying to work their way up to Partner. The more articulate you are, the more credible you are, regardless of the words coming out of your mouth. So much of PE is just opinion anyways - no one actually knows if something will be a good investment or not. If you can articulate your position well, people will back you. Whatever you need to do to master this, it is time well spent.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
9mo
Taxman1001, what's your opinion? Comment below:

Thank you very much for doing this - great insights as always. Given you've been on both the buy and sell side, what would you say are the truly valuable things that sell-side bankers provide to strategic or financial (PE) M&A deals (e.g. what is the real value-add advice / service)? Valuation and execution seems a small part of the equation given financial (PE) buyers/sellers have this expertise and large strategic buyers /sellers have corp dev/M&A teams. From my limited understanding, it includes being able to tell buyers/sellers what price they could transact on in the market given relationship with sponsors/corporates (e.g. to get highest/lowest price) and when the deal/structure is truly complex (seems rare). Of course, there's also financing where the bank isn't just providing advice and a lot of mid/small strategic buyers/sellers don't have internal M&A teams.

9mo
CompBanker, what's your opinion? Comment below:

There will be a lot of different opinions on this one, particularly depending on which segment of the market you're in. You're right that pretty much any sell-side banker is able to do the valuation and the execution work. I also think that 'unique relationships' are overblown - every single middle market banker has the same 'unique relationships' with the same 500 middle market PE firms and cohort of strategic buyers. To me, sell-side bankers really earn their stripes by truly understanding all aspects of the asset they are selling and the industry in which it operates and then using that understanding to excite buyers. It is particularly noticeable when buyers are conducting diligence and throwing out potential risks. If the banker knows the asset very well, they can usually produce a thoughtful and accurate counter argument to why the identified risk is mitigated. If they don't - they will come up with a generic answer that generally causes the buyer to drop or lower their valuation.

An example:  The banker is selling a widget business. During diligence, a buyer uncovers that revenue from the company's largest customer dropped 25% 3-years ago and rebounded the next year. The buyer is concerned that earnings are volatile and the relationship with the largest customer is at risk. They ask the banker for an explanation.

A 'bad' banker might say something like:  "That was a number of years ago and the company has not seen an issue like that since. It was a complete one-off and management is very confident in their customer relationships going forward. None of the other buyers is focused on this issue and your bid is going to be viewed negatively if you focus on it. You should instead be focusing on the tremendous upside and growth!"  

A 'good' banker might say something like: "Three years ago a factory strike at the company's largest customer caused the customer to put a halt on all purchases for a 3 month period. The business was never lost and the relationship remains as strong as ever. We've prepared an analysis that demonstrates exactly this - showing how products manufacturer at this customer's plant were the only ones impacted and have steadily increased over the last three years."

For all the investing banking analysts out there, I encourage you to listen critically to the way your senior bankers answer questions. I know plenty of MDs with good reputations that have gone their entire careers never learning the intricacies of the companies they sell. M&A markets are so hot that you can actually get away with this, particularly once you're very senior and your job is only to win the deals, not to execute them. But the really, really good ones will take the second approach.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 8
9mo
Taxman1001, what's your opinion? Comment below:

Thank you for the detailed response - super helpful as always! It sounds like after learning the "basics" (valuation and how to manage the process), at senior associate/VP level aside from learning how to sell, it's important to really understand the industry and assets covered (almost building an equity research associate/analyst's understanding of the industry and individual companies covered) to become a good banker that can actually add value.

9mo
CompBanker, what's your opinion? Comment below:

I've lived in many different cities in my life. While I've enjoyed most of them, they've pretty much all been very cold or rainy. I'll be looking to spend more time in warmer climates as well as do extended travel in general during my retirement. 

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

9mo
Kirk Lazarus, what's your opinion? Comment below:

I've been on this site for a bit over a decade, but not around too consistently anymore.  Glad I popped in and saw this.  You're an OG on this site and have provided a ton of useful information to myself and others over the years.  Congratulations on your retirement and all the best in your next adventures!

9mo
Brio, what's your opinion? Comment below:

Been reading your stuff since like 2015. Congratulations on retirement and and thank you for your contribution to this site. I think all readers need your self-awareness/discipline/perspective and I hope to follow a lot of your advice.

9mo
OracleofBromaha, what's your opinion? Comment below:

Congratulations on hanging it up. You have been one of the most valuable authors on this site. Great career run and great contribution.

Two questions from me please: What lessons have you learned about how to manage the stress that comes with these careers over the long term and maintain physical and emotional health.

I'm a similar age to you, enjoy my intense buyside job, and want to sustain high level performance. Been thinking a lot about sleep, diet, how to mix in professionally and personally rewarding activities. You seem to have thought hard about this and I would appreciate your perspective.

Also, besides your enormous contributions on the WSO message board, any other forms of giving back that you've found rewarding. I'm reaching a point where I want to do that more.

Thanks.

9mo
CompBanker, what's your opinion? Comment below:

Stress has always been a strange one for me. I have encountered very few things that truly stress me out. Stress seems to stem from a fear of failure … essentially worrying that things will go wrong, or at least not go as planned. For some people this is a motivational tool; they use this fear to work harder and minimize the risk of failure. I've always had a different mentality. I know that the negative ramifications of things going wrong, even catastrophically wrong, are not as bad as we convince ourselves. I never had the fear of losing my job (especially for performance reasons) - I was always confident I would get another job or land on my feet. I was also confident that I would be able to perform 'well enough' - so it didn't make sense to stress out over work.

If you're struggling to find motivation without stress, you can attempt to reposition the work as an opportunity to overachieve. Think about how badass it would be to walk into a meeting and absolutely dominate every question thrown at you by the investment committee. Imagine the upside - a huge carried interest payment when your investment does well. I used to love presenting in front of LPs and large groups. Presenting is one of my strengths and was a relative weakness for my colleagues. I used to get very excited for our LP meeting knowing it was an opportunity to shine. If you can adopt this approach, you can motivate yourself to perform well out of excitement and not stress.

Alternatively, and this probably isn't the answer you're looking for, but to avoid stress you need to focus less on the negative outcomes and essentially 'care less.' Sure, you can do breathing exercises, meditation, etc. … but that is stress alleviation and does not eliminate stress at the core. The same thing holds true for taking a vacation or going to the gym. They serve as distractions, but you're going to be stressed again the moment you step back into the office, or perhaps even stressed out during the vacation with work weighing on your mind.

In terms of giving back, I haven't really done that on a formalized basis since my community service days. While I do enjoy making contributions on WSO, it really isn't the same when doing things on an anonymous basis. I find much more enjoyment in helping my friends with whatever challenges they face in life. Some of this is career related; I frequently serve as a career sounding board for my friends. But I also help with the day-to-day stuff. Sometimes a friend really just needs someone to watch their puppy or run an errand for them. However, they usually won't ask for the help, even if they need it. So I'm always quick to volunteer to accompany them to the vet, join them for their errands, or help them out with whatever is burdening them. It makes a difference in their life and can really solidify the relationship.

Giving back on a broader scale - that's something I haven't figured out yet. Maybe ask me again in a few years and I'll have a better answer for you.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 6
12d
TheCleaner, what's your opinion? Comment below:

Great mindset to have on knowing your value in the market place say to speak and your performance. To quote Michael Jordan which I always find helpful 'Work ethic eliminates fear.'

On presenting, this is also a great viewpoint to have when you will present for an audience. A time to shine. Next to that, the parts of your brain responsible for feeling a little nervous or anxious are spawn in the same core of your brain, the amygdala. Guess what, this part of your brain is also responsible for the (strong) emotions such as excitement or pleasure. 

One practical implication you can use is:
1) prepare the first 2 minutes of your presentation and the last (wrap-up) ~2 minutes. These are the parts people will remember the most anyway and give you good training wheels to kick things off and finish well.

2) Use a mental trick that you can not be mentally touched for the first 20 second of your presentation. You "20 seconds of courage". Almost always you will see any anxiety you had will turn into excitement. 

Think about as stepping to a few new girls in the bar or during the day, you will that pebble or your shoe or perhaps you are just scared as hell to go and say hi. Almost always the moment you do, any anxiety you had falls away in seconds, you will start to relax and excitement will takeover. 

9mo
LondonKid, what's your opinion? Comment below:

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9mo
CompBanker, what's your opinion? Comment below:

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Sed sed aut asperiores ad nobis incidunt sed. Et eius eos ut. Voluptatibus consequuntur autem aut molestias illo labore sunt. Est quasi exercitationem delectus nobis omnis.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

9mo
brobby, what's your opinion? Comment below:

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Voluptatem ipsa aut omnis quidem cum similique. Ducimus non id error quis dolor corrupti ipsam. Aut maiores occaecati cupiditate eos inventore doloremque recusandae.

Nihil rerum consequatur et pariatur debitis. Maiores pariatur hic et illum. Sint magnam assumenda est reprehenderit dignissimos est vel ratione.

9mo
ZetaMale, what's your opinion? Comment below:

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11d
wavespurple27, what's your opinion? Comment below:

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11d
bddjfj1345, what's your opinion? Comment below:

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Career Advancement Opportunities

December 2022 Investment Banking

  • Jefferies & Company (▲08) 99.6%
  • Lincoln International (= =) 99.3%
  • Financial Technology Partners (+ +) 98.9%
  • Evercore (▽01) 98.5%
  • Bank of America Merrill Lynch (▲01) 98.2%

Overall Employee Satisfaction

December 2022 Investment Banking

  • PJT Partners (= =) 99.6%
  • Evercore (▲02) 99.3%
  • Greenhill (▲05) 98.9%
  • Canaccord Genuity (▲15) 98.5%
  • William Blair (= =) 98.1%

Professional Growth Opportunities

December 2022 Investment Banking

  • PwC Corporate Finance (▲14) 99.6%
  • Jefferies & Company (▲05) 99.3%
  • Lincoln International (▲02) 98.9%
  • William Blair (▽02) 98.5%
  • Evercore (▽01) 98.2%

Total Avg Compensation

December 2022 Investment Banking

  • Director/MD (10) $613
  • Vice President (38) $392
  • Associates (220) $255
  • 2nd Year Analyst (139) $163
  • 3rd+ Year Analyst (19) $160
  • 1st Year Analyst (466) $153
  • Intern/Summer Associate (88) $151
  • Intern/Summer Analyst (337) $92