Anybody else scared for their job?
For context: I’m a 2nd Year PE associate at a mega fund, and have been closely following the progress of AI tools in the finance universe in the last 18 months. Initially, the tools in the market (SANA, Endex) didn’t look very promising and it never felt like they’d truly be able to replace what a private equity associate does on a daily basis. With Claude Code coming into the picture (and how quickly we’re seeing improvements in AI models), I’m genuinely concerned that it is a matter of time (18-36 months) before we will see PE associate hiring / class sizes starting to reduce and AI taking over meaningful work (modelling, slides, data packs etc.). We all know that software investments are anyways cooked. Is anybody else also seeing their fund / PE head in this direction and generally concerned that we might be out of jobs in the next 3-5 years?
Given all of software is such a large percentage, thoughts on the industry materially shrinking with less capital going forward?
Following
If you are already an SA you should be fine since you are in your final stages of being comped per output / model. But agree am worried how it looks for those just starting banking programs
Without jr people, how will folks get trained to do the job above that? I’m not in the industry but I don’t see how this will work
who will displace the boomer partners of underperforming PE funds
I think it just means the sector contracts significantly - replacements not needed . Enough VPs out there struggling for a seat
TERRIFIED. It’s all over soon
Definitely changed how we think about hiring already for this year although MFs have much more inertia than we do
Reading through that report from Citrini Research got me hella depressed. We are soo cooked.......
Why would YOU be scared? In 3-5 years, you would likely be a VP. So you wouldn't get replaced.
Here's a thought experiment:
Has anyone in the industry seen lifestyle get "easy" over the past 3-6 months as AI tools have ramped? I sure haven't.
Our associates are still grinding 70-80 weeks and are using AI to support their efforts. As a midlevel, I have no shortage of stuff to give them to do, and in fact, there are still many things I don't push hard on because they aren't high enough priority / a good use of resources. If the associates were leaving at 5 AND I was getting everything I needed instantly, think it would be a different story. That is categorically not the case. Curious what others are seeing.. Yes Claude can make a memo, but if you actually served one up to IC, they would flip out and refuse to take it seriously because the formatting doesn't match their expectations. Most of these senior guys cant even wipe their own ass, much less dig into badly recorded numbers to optimize economics on a NWC peg, sell a $2m EBITDA add on Seller to go to you, or hire a new portco controller. AI can't do any of those things.
Another thought experiment: is there more you could be doing if you had more time and capable capacity? Are you already completely maxed out on theoretical quality of underwrite, level of portco value creation support, quantity and depth of business development? Are you perfect at your job? Probably not even close.
I think there are still many things I could be doing if I needed to redeploy myself (VP) and an associate under me. Our memos could be longer, more thoughtful, easier to read, more precise, more congruent, have greater depth. I could be doing another 5-10 banker or target calls a month. I could be spending a week a month on the road with my management teams on projects. I could be sourcing and closing more add ons. I could travel more, which does matter. Bottom line (to me at least) is there is still a lot of stuff to do to create value that AI will hopefully allow me to unlock. And the associate is basically a less skilled, less polished version of me, that i could selectively deploy in similar areas, but with guidance. I think reducing the junior roles to just "You make memos and excel models" is refuctionist, and quite frankly, not congruent with actual reality.
Based on Viva insights (check it out, teams app), as a a VP, I spend 75% of my time on coordination and relationships (i.e. calls and emails). Im dealing with people all day. Honestly, it's exhausting. Communication is everything but man is it a lot. AI doesn't really change that, it just let's me do it better, kind of.
I agree with the above. Im now in a 4th yr assoc position and getting promoted later this year so fortunate to have associates beneath me on almost all of my work. i think its pretty clear that the end state will be associates who are just exceptional at using these AI tools -- and the best ones will actually understand their work and the underlying reason behind it, not just act as model prompting conduits.
we use most of the tools mentioned above and what is NOT a good use of my time is taking some new piece of data, popping open my claude for excel (or hebbia or rogo), coaching it for some amount of time, and getting the data cut into a presentable format. Yes, i can now ask my 'agent' to do this, but then all of the sudden i am not focused on the things the matter to me and the folks above me -- sourcing and banker coverage, thesis development, resolving portfolio finance and credit issues, and driving conviction in deals. that workflow (whuch was and should always be associate work) simply takes too much time and is not the highest and best use of vp calories.
what will be great is the ability to have our associates produce more outputs (to the extent necessary) and to explore trends in data that otherwise they would not have the bandwidth to explore. ai will let them run with ideas (assuming they know what to look for, but in any event thats where the midlevels come in). and hopefully creates efficiencies in exploring these ideas and outputting them
Finally, as the jr bankers / college kids come up, they are going to blow circles around us 'old heads' who cant prompt for shit. BUT were still gonna have the 60yr old partners run a cim through perplexity and send us the output with 'looks intersting - please dig in" lol
just my 2c
Excellent points by guys above. Look, the bear case isn't '90+% of associates are gone because of AI'. The bear case is 'bottom 25-33% of associates are gone because of AI' because the top 2/3rd will be excellent at using AI to augment themselves and dramatically increase quality & quantity of output
There's a good chance that headcount impact is minimal (sub-10%) because of this. The idea that there's a finite amount of work to be done is false. Excel did wonders for analysis compared to old method of pen & paper. Same thing will be key here
AI also produces predominantly consensus opinions (even assuming all of the objective stuff is correct). The real money is made in non-consensus opinions that are proven right (at least in public markets). Probably some angle to apply here in PE too
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