Coming to terms with being "poor"
I work as a Principal at a sub billion dollar AUM secondaries fund. My education isn't impressive, and despite having significant deal experience and great returns, my past work history aren't from brand name shops. I did some interviews recently with larger well known competitors and despite having a very strong track record it was a no go.
My pay is very poor (125k base + 20% bonus) and our fund's fees are ridiculously low. Picture what an analyst at Evercore gets, yep, that's my salary, and the bonus isn't even worth talking about. Trying to raise kids and just finding it tight financially. I've come to terms that I won't be "poor" compared to people with normal 9-5 jobs but certainly when it comes to PE I'm not getting rich any time soon. Just wanted to vent.
Are the economics stacked towards the top? What's the incentive for someone at your level to work at your fund if the pay is this poor?
The firm is 100% owned by three people: 33% to the Managing Partner, and 33% each to two outside partners that have no input as to the day to day at all.
80% of the carry goes to those three people, I get 5%, another Principal gets 5%, and the remaining 10% is split across associates/VPs basically 1-2% each. We have just shy of $1bn in AUM but most of our products don't charge carry so the actual AUM to charges carry is only 50mm...Assuming that 50mm does a net 1.6x (to be conservative) and 15% carry then that's only $4.5mm in carry for the firm, so $225k for me. There is an 8 year vesting period so if you amortize that annually it isn't even worth talking about.
Bonuses are very low, like 20-30% of base salary.
In other words, apart from working with nice people, there is nothing to financially incentivize mid/senior level people to work here. The junior people get good experience and are paid not horribly but still far from market.
I figured that's what it was. Sorry man, really shitty situation to be in.
I've been in the situation on the sell-side - great people to work for, amazing learning experience but really really shitty pay. It gets really comfortable but the opportunity cost on comp just got too goddamn high and I'm glad I got out. Not suggesting anything in particular, or anything at all tbh. Just empathizing and sharing.
Heard FT Partners pays 140 :)
What is FT Partners?
Boutique investment bank focused on fintech
Should have googled it bud.
Did you start out in IB? You could potentially switch to IB since they pay street pretty much in any city. Your pay would be about the same the first few years, but continue to grow if you move up.
I have gotten offers in private capital advisory but I'm really more of an investor.
Are you in a big city? You could try to network your way into an investment seat at a large endowment or family office. They would invest in alternatives and your experience in PE could help them.
Sounds like you have really deep experience on the investment side already; why not just continue recruiting and take a gig that hits with better pay?
Also, is it really an issue to lateral to a PCA shop for a bit and clip higher salary for a couple years, maybe hop back into the investing side after the fact and pitch it as a skills boost sabbatical? Surely you would make tons of connections that would be invaluable if you hop back into investing. I've seen countless people do this.
Analysts at Evercore make ~$160-200k first year. You mentioned living in a LCOL city and that you're feeling tight financially while raising kids. How can this be? I don't mean to be crass. I ask because I may be moving from a high-paying job in a HCOL area to a job that pays ~$200k all-in in a LCOL city so I'm just trying to understand where all the expenses get drained. No kids yet but not too far in the future for us so I want to make sure we're thinking about our budget right.
Yeah, I don't know what the hell this guy is talking about. My Dad makes around that and my family is from a HCOL area and me and my family of 5 lived a comfortable upper middle class life growing up which I'm extremely thankful for. Mom also worked part time too which helped.
My base is $125k and I get a 20% bonus. So technically I make less than an Evercore first year analyst but have 12 years work experience lol.
I am actually in a HCOL city - not NYC, but equally as expensive. I just didn't want to state that when posting as I wanted to sound more generic.
I see. That makes much more sense (and was a crucial detail to muddy). I've been getting hits on fully remote corp dev opportunities paying $150k+ in salary alone. I don't know how bound you are to secondaries or PE but if you're open to relocating and/or doing something different but tangential, that remote flexibility/job change would help stretch your dollar a lot further.
$150k total comp for a HCOL market while raising a family is going to be tough. Still plenty doable as others live in NYC/SF on less but if you want your money to go further, you can either leave for a higher paying gig (could mean more hours), move to a new market or get your wife (assuming married given the kids you mention) to get a job to contribute to your family's bottom line. It feels like you're boxing yourself in in terms of options but I don't want to speculate too much off your original post.
Either way, I wish you the best of luck dude. Your experience sounds like it's definitely worth more than $150k.
OP Can I DM you?
OP Can I DM you?
Are there any more reputable shops in your city that you could leap to?
Not really, unfortunately.
Every city has reputable shops. Especially if it is a city as expensive as NYC. Change your mindset
How're your hours? For better pay and decent hours, would suggest suggest looking into CorpDev at a large tech firm or something. Decent number of hours would be PE practice of a consulting firm. High hours (and highest pay) would obviously be IB or another PE firm. Either way, I don't think it makes sense to stay where you are. That pay is not at par with your qualifications at ALL. As a first year MBB consultant, I almost made that much and had no kids to think of.
To be fair, I only work 45 hours a week. I've tried energizing the firm to work harder and get more deals done but no one cares so there's no point.
Earning 150k all in and working 45 hours a week isn't bad but I'm also in prime earning years and I can work harder but I don't want to work harder to make the other 95% of the company rich and not myself.
Ah got it, IB, Consulting, and larger PE firms are much worse on the hours side, and I'm guessing you don't want to suddenly disappear from your kids lives in that case haha. Would definitely look into CorpDev at big tech co or Strategic Finance / Corporate Finance at big tech or startups. Even late stage startups will probably match your comp + give you equity (obviously less job security there though, especially in this market). CorpDev at big tech could be cool and more stable (as long as its not Facebook), I imagine many of those firms will be hunting for acquisitions with all the struggling / shrinking startups right now.
You’d probably be making more in back office at a big bank at this point. Or, at a normal 9-5 in some tech ops role. You need to look around for other jobs instead of just resigning to your situation.
I know you said you didn't want to do sell side, but you'd make multiples of that on the sell side
True. I have been offered some high-profile positions on the sell side. My understanding of that kind of work is that you're really 100% sales so if you have a mediocre year they say "bye bye" quite quickly. I am considering it, though.
do you already have kids or are you looking to have them soon?
I have a one and two year old.
Lol get a better job then dummy
Thank you
Secondaries firms are hiring a ton (including mine), I think you should find something. Or are you unwilling to switch cities
Most firms I talk to want someone with experience deploying hundreds of millions per deal where as I mostly did small deals due to our fund sizes. Hard to get your foot in the door at the VP+ level tbh.
MBA pivot? I understand that may be difficult with a family already. Just trying to throw an idea out there that may help. You may be beyond that opportunity, I'm not sure if / how that would work. Maybe network with some of those larger buy sides and see how it would be perceived and what doors that may open for you at the VP+ level
Let the man vent…
The firm seems to be extremely top heavy. Is that main partner someone who was in your shoes 3-5 years ago? Or did they get lucky and get setup.
Seems the main out will require risk tolerance and to stake on your own like they did, or is that options many years away?
Temporibus aut aliquam autem eaque velit pariatur. Qui ut molestiae architecto molestias repellat soluta. Qui omnis rem in quas.
Officia ullam officia qui deleniti necessitatibus. Necessitatibus aut est repellendus corrupti autem autem incidunt.
Et mollitia tenetur veniam beatae autem. Saepe error iusto blanditiis. Dolorum harum nihil dolore velit dolores qui. Quia at ipsam doloribus ipsa ut. Omnis repellat voluptatem voluptatum quos debitis maxime ea.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Sunt quidem sed quasi iure. Exercitationem illum odit iusto eaque suscipit itaque voluptas.