Corporate Banking to Family Office PE?
I am currently 2nd year Associate in Corporate Banking (Investment & Corporate Banking group) and have received an offer to join a reputable Family Office focused on LMM private equity as a 1st year Associate on the origination team.
Compensation is slightly worse at the Family Office.
I expect the culture and hours to be better at the new firm as well which is an important consideration for me.
Long-term, I would like to get out of lending and into a investing role, so I think that this move likely makes sense. However, I still have doubts about leaving a reputable global bank to a small family office.
Are there any other critical points I should be considering in making this decision?
A few considerations...
Reputation - A big part of this decision is how reputable the FO is. If its a MSD tier in FO quality, the role sounds interesting. If it's a random FO with a large AUM that thinks they're reputable, I'd be very careful.
Culture - Part of these FOs are about the family staying wealthy, instead of becoming wealthy. This results in a very risk off and low incentive to outperform environment. if you want WLB, that's great, but if you're ambitious I'd make sure you understand the culture before you join.
Incentive - I'd also find out how your bonus incentive will be structured. Many of these FOs promise market comp, but they don't understand what market comp is. It's very strange they aren't going to match your current base, $15k isn't a lot of money and if they can't match, it says something about how they pay their employees. That's a red flag.
Career path - What is the career path in this role? Large banks have a fairly structured path, but FOs can be very unstructured.
I'd also talk to former employees of the firm before accepting any offer. This is a huge must.
Best of luck!
Thanks for the terrific reply! Working through your points, I feel a bit more comfortable about taking the offer.
Reputation - They are a reputable firm in my geographic region and are well regarded in the market. They have been operating for >25 years as well and are quite acquisitive.
Culture - That's a fair point and to be completely honest, I am not sure how much incentive they have to outperform. However, my understanding is that they differ from normal PE in that they typically hold their investments long-term and are operationally involved (another aspect that interests me).
Incentive - That is a fair point as well. While I feel like I could have pushed more base salary, I opted not to as I felt I had limited leverage coming from a lending role. That being said, the people who currently work on the investment team have strong backgrounds and there has been very little turnover which makes me feel like they are fairly compensated.
Career path - Agreed, that was a major consideration for me when I interviewed with them and they assured that they have a structure in place. They are very focused on retaining talent over the long-term and junior development. While it's much more opaque than a large bank, I feel like they will treat me well!
As someone who worked at a FO be careful on the operations experience. Do they fully own some companies, or are they partial owners? Depending on the companies the operational work can involve some pretty random shit
Appreciate the heads up. They generally have wholly or majority ownership of their portcos. As I understand it, the operational aspect is not part of my job responsibilities, but is something that I have expressed an interest in for the future.
Bump. For reference I'm a first year analyst at a FO in Boston/Chicago with total comp of $135
Thanks for the reference point.
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