Hi all, I was wondering if someone could please discuss the advantages and disadvantages of working at a family-owned private equity firm on the pre-MBA level. Certain advantages I can think of include working on small team and having lots of access to senior professionals, as well as flexibility of capital and focus on deal execution (with family money, there's less of a need to preoccupy yourself with fundraising and deal sourcing activities, at least from what I understand). However, I've also been told that for future private equity opportunities, pre-MBA work experience at a family-owned shop may not be as well-respected as a more established mid-market or large buyout shop, from the standpoint of prestige, training, deal experience, and so forth. I have no personal experience to speak of, however.
Can someone please share their thoughts as to whether it would make sense to choose an offer at a family-owned private equity shop over a more established mid-market firm (say $3-6 billion in investments), from either the standpoint of b-school prospects or potential of moving to a larger PE shop in the future? Assuming you liked the people at both firms and felt you could have a good experience in either opportunity, what would make you choose the family-owned PE opportunity over the larger firm (perhaps location, compensation, etc.)?
Thanks in advance for your thoughts.
Numi,
I sent you a PM but of course your inquiry is contingent upon the network and clout of the family/firm.
What is the size of the fund? Do they have a specific niche, or are they generalists?
junkbondswap, thanks for your note. I had a chance to read it over and really appreciate your detailed insights -- I will reply in greater depth later this afternoon.
As for the size of the family-owned fund, I couldn't tell you -- it's a family owned business and they never did tell me how much capital they have available. (Is this something that family-owned PE shops normally disclose?) However, what I do know is that they generally look at investment opportunities across different sectors, and target companies that do $10-20M in revenues and $3-10M in EBITDA. The firm currently employs five people and was founded in 2005. It's completed three acquisitions so far, and the team has indicated that as part of their investment philosophy, they are pretty operationally-focused and have no problem with working with their portfolio companies over the period of 8+ years (as opposed to turning around a buyout investment in 3-5 years). If I had to guess, it seems like this firm would be comfortable doing 1, maybe 2 acquisitions a year.
Given what I mentioned above, what can you glean about this opportunity? Thanks again for your thoughts.
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