Direct / Co to Endowment

Hi guys, I just got a FT offer from a pretty big FoF firm for the direct / co invest team (100bn+ AUM). In all honesty I really want a WLB in finance and I’m mainly interested in ending up at an endowment / investing for a nonprofit. I am in a few processes with OCIOs / endowments (10bn AUM +).  I’m wondering if anyone with experience in this space knows how easy it would be to recruit for endowments from this group in the future - should I start in an endowment role or this team? Would it be harder to go from endowment to direct investing than the other way around if I find out I don’t like endowment investing? I also want to get an MBA and I also know I may not like endowment investing since I’ve never actually worked in it, it just seems like an area with some sort of impact investing as well as great WLB, which are two things I really care about.

Anyways, based on my criteria, anyone have any advice? Anyone know of areas in finance that have good WLB / impact investing that I’m missing out on? Thanks in advance!

Hey there! Congrats on your full-time offer from the FoF firm, that's a big achievement! Based on the most helpful WSO content, it seems that people do make the jump from FoF/Co-invest roles to endowment/foundation asset allocation type roles. The skill sets are indeed pretty transferable. However, one thing to note is that institutions like endowments tend to have pretty lean teams, which is why they outsource a lot of work to FoFs and LP consultants. Some endowments may only have a CIO and a handful of investment professionals compared to the much larger teams at big LPs. As for your question about whether it would be harder to go from endowment to direct investing than the other way around, it's hard to say definitively. However, it's worth noting that people usually want to go the other way around (i.e., from less direct investing roles to direct PE). In terms of work-life balance and impact investing, endowments could indeed be a good fit. They often have a more long-term, holistic approach to managing capital, which could align well with your interests. As for other areas in finance that have good work-life balance and impact investing, you might want to consider roles in ESG (Environmental, Social, and Governance) investing or SRI (Socially Responsible Investing). These fields are growing rapidly and could offer the combination of impact and balance you're looking for. Hope this helps, and best of luck with your decision!

Sources: Direct PE to Pension/Endowment, Direct Invest to FoF/Co-Invest?, Differences between Co-invest and Secondaries?

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Congrats on the offer! Really interested in your thread so hoping to build some interest with a couple of questions l was curious about. What’s your background (target/semi/non) and did you get a return?

Also, anecdotally have seen more people transition from direct investing to endowment than the other way round, but will defer to the more experienced folks here

It moves you closer to the goal but you’ll still be competing against those that have direct endowment experience. As much as people denigrate the “allocator” role, they still like to hire those that have done the job before. It’s a helpful step to be able to say you’re evaluating GPs but it’s not as helpful as being at another endowment.

Oh Okay, thanks! What would you recommend for someone in my position who is just graduating? I'm scared that if I start in an endowment and I don't like it, it would be much harder for me to switch into something else without direct investing experience.

Most Helpful

To echo the thoughts above, direct investing experience is helpful, but not the same as direct endowment experience. Sure it's doable to make the transition, but if you're really interested in endowment investing and have a few endowment role processes that you're currently in, I'd recommend going straight into it if you have the opportunity. A lot of people stay in those roles for their entire careers because of the WLB / impact, and given that a lot of these places recruit out of undergrad now, it's hard to say for certain how difficult to will be to pivot into an endowment that you like after your analyst/associate years. At the very least, you should try to accelerate the endowment processes now that you have an offer in hand.

That is great advice, thank you! I will definitely accelerate the endowments. How would you weigh optionality in this (I am also interested in corporate development / product or strategy in a company - would direct investing be more applicable than endowments here?). Furthermore, would you go so far to choose a lower tier endowment (e.g. 10bn endowment, T20 school) over a top FoF? Overall, I'm just scared that I can't switch out of endowment investing if I don't end up liking it, and it seems like direct investing has more applicable exit opps (corpdev, endowment, portfolio management, etc.) Thanks in advance!

Thanks so much! You can apply to HYP directly on their websites and the mid tier ones (UNC, Vanderbilt, Emory, etc) posted on my schools job board. I believe each endowment is hiring only a couple analysts (Harvard is only hiring one). PM me with any other questions!

I believe Emory has a massive endowment greater than half the Ivies

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