This site has become so pessimistic
I have frequented this site for years and come to realize that many of the members are very pessimistic on the future of Wall Street. Obviously most members are obsessed with IB and PE and I agree that those are probably the most stable places to be long term, but what about other areas of finance? People are constantly saying S&T is dying, ER is dead and HF business is dying.
Is this because we’re getting advice from mentors that started in the business in its hay day or is this really not a good place to be? I believe that we will always need people in these roles but there will be much fewer seats. There is also a need for people to sell services such as prime brokerage or electronic trade execution. I also understand that the money will never be what it once was, but can you not still make $400k-$1M in any of these areas? This might not be what it used to be but is a lot relative to the rest of the world.
I’d love to hear what others think about this. Am I being to optimistic?
You're right in that those jobs will always exist but there will be fewer jobs and those jobs will be much less lucrative than they used to be. The issue here isn't that there's some temporary downswing but S&T, ER, and HFs (maybe less so) are structurally disadvantaged. There is simply no way for S&T desks at banks or ER departments to be massively profitable with Dodd Frank, MiFID II, etc. It's really tough to advise someone to go into an industry that is actively shrinking and which already has a surfeit of talent.
I'd argue IBD and PE, while increasingly commoditized and competitive, will be much more stable over the long term. Companies will always need to raise capital and buy / sell things, and institutions are practically throwing money at PE funds despite lower returns.
technology is taking over. change is inevitable. reasons for this site becoming pessimistic a whole different story.
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Most of the forum is IB kids gunning for exit opps though.
We're competing against time in a dying industry as quants and swe are better off in the long term with their knowledge of coding and maths. It really doesn't have much upside as it used to and won't in the future unless deregulation.
PE is facing an existential crisis right now. This will be the end of the industry as you know it, so it's not just S&T. People who are pessimistic are correct to be pessimistic.
Absolutely stupid comment. PE isn't going away it's just getting more efficient. It's much harder for your typical small (200-500m) fund to compete against the others. That's why you see larger funds building out internal functions like strategy teams, talent teams, etc. and switching from generalist to sector specialists. To say the industry as a whole is facing an existential crisis and "this will be the end of the industry as you know it" removes all credibility from you as a poster. The good firms are still 2-3x+ oversubscribed and are raising $1b+ funds in less than six months.
The Carlyle Group recorded a $1.2bn investment loss and said it was withdrawing all earlier financial guidance, citing the fallout from the coronavirus pandemic.
The losses were severe enough to completely wipe out the accrued “carry” on three funds, meaning that Carlyle and its executives would receive minimal performance fees or other sweeteners if the investments were realised at current valuations.
lol get the fuck out of here you shill. I bet those strategy teams and industry specialists are huge differentiators when everyone with over a $1Bn in AUM has the exact same thing.
PE isn't going away but the days of consistent 25% IRRs are long gone. Funds are oversubscribed because there's a ton of LP capital that needs to find a home, not because there's anything special about the funds themselves.
To your point about "the good funds" look at Berkshire Partners--they're clearly a top tier fund and they haven't done a platform deal since 2017. That should tell you something about how absurd valuations and competition are at this point in the cycle.
So what’s the next best thing? Where does one go that loves markets. Is that dream just dead completely, or is there something better?
Everyone is obsessed with tech but if people all go for tech over the next decade, won’t that market become over saturated as well?
Not the most informed opinion on the matter at hand, but I have noticed a lot of people on this forum focus purely on top end earnings (which is a bit ridiculous in my opinion). Suddenly that $400k base and $400k bonus is abysmal because if you are a mega fund PE Partner, you’d earn multiples of that. Everyone on this site acts like if you’re an IB Analyst you’re destined to be the next Henry Kravis. Not to shit on anyone’s dreams, because Henry Kravis does exist and somebody is bound to be just as successful. But picking an entire career as if it’s destiny to be at the highest top end isn’t logical.
It’s like becoming a SWE and saying you’re going to be bigger than Zuckerberg or Bezos. Sure, it could happen. But don’t be a SWE based on that bet.
TLDR: People need to realize being worth billions isn’t the only measure of success. Earning $200k a year before kids is doing damn well.
Edit: to connect this back to what OP was talking about, my point was that people see $500k a year + equity in investments + large bonus and say it’s horrific and dying.
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