I have received two offers: 1) Small/LMM PE shop with 500M AUM 2) DCM BB.

in addition, I am in the last stage of the interview process with an Elite Boutique firm for a generalist role (M&A and Rx)

My end goal is the buyside (PE or HF). Could you please advice and compare:

1) Small PE (+responsability, interesting work, overview of the whole investment process, possibility to be a board observer and good WLB) vs DCM (less interesting work and worse hours, solid brand name, may be more optionality for internal mobility)

2) Small PE vs EB (brand name and interesting work, though it could be less interesting than PE, Higher comp than PE, worse hours)

Comments (15)

Jul 3, 2022 - 1:47pm
laodaliscarubia, what's your opinion? Comment below:

I think that even though you are referring to a little fund, you'll be gaining further exposure and expertise. You don't sound excited regarding DCM, am i wrong? You have like the mindset of a value investor , so yes, start investing and gaining fortune dude! 

Most Helpful
Jul 3, 2022 - 3:31pm
pe_imposter, what's your opinion? Comment below:

Not at all. Following is a copied response I sent a graduate recently who wanted to go into PE directly for a smallish MM fund.  

I would advise against going directly into PE for a few reasons (if you have the option to go into IB);

Firstly, the exit ops for someone who's only ever worked in PE are much narrower than someone who's worked in IB. HF/AM from MM PE is rare (in the UK anyway) and the only thing I regularly saw people do was go into CD and sometimes FoF. Whilst PE is a cool job, your career is going to last 40 years and at some point you're probably going to want to do something else. 

These MM/LMM PE funds will have no structured training programmes like the IBs do. 

MM/LMM PE deals are very repetitive. I worked in PE for 3 years and every deal we did was so similar. They were either buy & builds or organic growth with dev cap. Pretty boring after a while. You wont be doing public to privates, corporate carveouts, hostile takeovers, distressed equities, IPOs etc.....Which is the interesting end of the market (in my opinion). 

You'll also be working for a small institution of around 20 people with few junior staff. at an IB there will be 3-8 analysts on your team and you all go out for dinners together and have fun in the office, go out partying - which is great when you're young and making good money. If you start in PE you'll be in your mid 20s working with 30/40 year olds. I cannot tell you how important this was for me personally. Since I started banking I've met loads of friends at my bank, we chat all day, have dinners together, stay late together, go out after work together. I personally missed this social aspect of the job massively in PE - all I did was speak to people about their kids. 

You will also get far less deal experience. My PE house did 4-5 deals a year. IB teams do 15-50 so overall you get way more exposure which is so important. FYI your worth in this job is your network and your experience, you wanna do as many varied deals as poss in the earliest stages of you career IMO.

I went directly into PE and did it for 3 years. I have now left PE and I work as an investment banker in M&A because of the reasons I just listed. Also, PE doesn't pay as well as IB in the younger years (it does in the older years). The IB I work for have paid me 50% more than I was getting in PE. Carry structure arguments is a different convo but was also not great at my fund.  

So in conclusion, if you really want to go into PE and have a successful career I would recommend 2-5 years at a IB with very good structured training and solid deal flow. Then move to PE, you will be a better investor for doing this. It also means you can go to a UMM/ top top PE fund which do way cooler deals and pay better. Theres a reason why IB -> PE is the traditional route; its the best. 

Jul 3, 2022 - 2:36pm
value9929, what's your opinion? Comment below:

Thanks Guys. Agree that the base experience + training + brand and network will probably be better at the EB.

And if I dont get the offer: What about small pe vs dcm? Any recommendation there

im based in europe btw

Jul 4, 2022 - 1:24am
emergingmkts, what's your opinion? Comment below:

For me would recommend EB, then DCM BB (and aim to move to M&A, coverage within 2 years - shouldn't be hard, have seen many examples over a decade +. Of course you have to work hard and accurately especially on x product pitches / deals, given - perhaps unfairly - perceptions of DCM from M&A teams) then PE LMM. Reasons for not joining a small PE shop at the start have been given above.

Jul 4, 2022 - 7:51pm
Tracer85, what's your opinion? Comment below:

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