Agreeing Exit Plan with Firm
I work in a regional European office of a UMM / MF. As it's regional, there's a much smaller market of comparable firms and lateral moves are difficult. Industry is pretty tight (everyone knows everyone etc) and it's hard to move between firms as a result (people don't want to hurt relationships by "poaching" staff). I've gotten pretty burnt out in my current fund and want to find a new role. I've been told I'm up for Principal promotion next year so performance is good, but I'm not that interested in staying in PE long term as I'd prefer something with better WLB / closer to day to day operations of the business.
I'd like to go into something similar such as corporate development or strategy. My plan is to sit down with my MD, explain my position and try agree a plan which would allow me to be "phased out" over next 12 months. I think this would work on basis of I still give it 100%, I get a bonus at year end, and I help recruit for my replacement + train them in if there's sufficient overlap. The quid pro quo from my MD / fund would be they help me find my exit once we're in a position that I can leave without it leaving a hole in the team (runs pretty lean). Does anyone have experience of this and how they framed the conversation / was it ultimately the right choice vs. just recruiting and leaving?
Interested to hear from other people. The right approach might change depending on the culture of the firm, MD's personality, country where you work, etc.
Personally, I would avoid doing this. Try to slow down a bit at work (without making it evident) and start networking more with people around the industry, headhunters, old colleagues, etc.
It may take more time but it's a safer strategy IMO
Thanks. It's a funny situation with headhunters, there's only 2 of real quality in our city and we use 1 of them so they're conflicted (they also have the best mandates). If I agree an exit plan, that opens up their mandates as we'd also be using them to replace me.
I have a good relationship with my MD and it'd help avoid leaving a significant hole in the team if I go down this route. If I find out the grass isn't greener and want to go back to PE, leaving on good terms could be very beneficial to that (either return to my firm or ask MD to use their network). If I didn't have a good relationship with my MD I'd completely agree as it'd be too risky of a strategy. I.e. working full year, getting a crap bonus and mimimal assistance on being placed into a new role.
Definitely a tough spot in a small market. It ultimately comes down to your relationship with your MD and your tolerance for risk if things go downhill in some fashion. Not sure if this is high on your priority list, but if you do all of that after principal promotion, I suspect you may get a nice bump in either title or comp when you switch over to CD / strategy.
Thanks. That's definitely a consideration I'm taking into account. Will explore it with headhunters to work out comp uplift and if it's worth it (pretty unhappy right now and it's feeding through to happiness outside of work). If CD / strategy didn't work out, getting Principal would definitely help with transition back into PE.
Thanks, that's a good suggestion. Keeps it open to coming back, or moving onto another portco once the other is in good shape or exited.
I think it’s best to play with open cards in your situation and think your approach is generally right. However 12 months in advance seems like a long time. What’s the typical hiring timeline at your firm / country? You don’t want to get into a situation where they replace you 4 months in and then let you go because they have no use for you.
Thanks. To find the right candidate at VP level my guess would be 6 months minimum (3 months search + 3 month notice period). Employment law is pretty tight in most European countries, you typically can't let people go because they've no use for you without either going through PIP / termination, agreeing an exit plan, or making someone redundant. The payout for redundancy is significant, and the team would also be concerned about it getting into market that they reneged on an agreed exit plan. Better for them to accelerate exit timeline and still have me work rather than make me redundant.
I contemplated a very similar approach about five years ago and ultimately decided against it, but not because I think it was actually a bad approach. If your relationship is very, very strong with your MD, I think you can pull this transition off. A few considerations:
1 - Discuss it ONLY with the MD. Do not broadcast the situation to any other employee or even hint at it until you’ve fully discussed it with the MD. Once word gets out that you’re looking to leave, you cannot get it back.
2 - Be open to alternatives. Joining the portfolio company is one of them (or a project if you’re in RE, for example)… but also be open to different roles within your own fund. I’ve seen people become “Chief of Staff” or “Head of Operations” at investment banks when they were sick of their front office role but the firm wanted to keep them on. Before you approach your MD, make sure you’ve got clarity on what it is you DO want to do. I don’t think “I’m not sure, I’m just burnt out” is a good answer.
3 - You can offer to train your replacement, but you shouldn’t delay looking for a new role — and you definitely shouldn’t start looking AFTER you’ve begun training. Optimally you want the hiring of a replacement and training them to be on a “best efforts” basis while you’re out looking for a new role or serving your notice period. I doubt they will want to carry your cost on their books for a long time once the replacement is hired and trained (and they may not even need much training if coming from an equivalent role).
4 - Give some thought to if you are open to changing geographies. For example, if you’re in Manchester, the limited opportunities in your market may require you to at least keep London as an option, even if it isn’t your first choice.
I have other thoughts, but I’m heading out for the evening and can only type so fast!
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