Do I need GP experience?
Hi guys! I am at a weird junction right now and would love your advice. I am currently a second year analyst at one of the biggest coinvest shops. It’s honestly great, hours were pretty good at first, pay is in line with peers in banking, got to see a ton of deals from all industries, GPs, check sizes, etc. I have internships in bulge bracket IB and PE. I’ve always seen myself staying in the LP world, I’ve always really loved impact so can see myself being CIO of an endowment or pension or foundation later in life. Would like to do something government related as well. Also reallyyy enjoy work life balance haha. The issue with my current shop is that since it’s so big, there’s little upwards mobility and the hours are getting longer as I approach to associate. A lot of associates at my shop work the same hours that you would at a normal GP. So now I feel like I am in a weird place: What is the point of working longer hours at a coinvest shop? I also feel like the amount that I’m learning is starting to plateau, it’s all pretty repetitive. I know I could get into a high position at an LP staying where I am now, but I am also wondering if a stint at a GP would be the final check on my resume to lock in stability as an LP in the future. I haven’t seen many LPs with GP experience, so it would definitely be a differentiator. I started recruiting a few weeks ago and it has been going quite well, mostly LMM/MM shops but have been progressing through the rounds, the case studies are not a problem. I know the lifestyle is quite miserable at a GP, but I also think I would learn a lot. However my question is, is the few years at a GP worth it? Or should I just stay in LP land? I’ve heard LPs internally promote a lot so it might not even be worth it to exit. I’m also considering secondaries. But I know being at a GP would preserve more exit optionality. What do you guys think? I am in processes with smaller coinvest and secondaries shops as well. I figure if I don’t get a GP spot, I might as well go to a smaller secondaries / coinvest shop with better hours.
Based on the most helpful WSO content, here's what you need to consider:
GP Experience as a Differentiator: While it's true that most LPs don't have GP experience, having a stint at a GP could set you apart. It would provide you with a deeper understanding of deal-making, strategy, and execution, which could be valuable when evaluating GPs as an LP. However, this isn't a strict requirement for success in the LP world, especially if your long-term goal is to stay in LP land and eventually become a CIO.
Work-Life Balance and Career Goals: If work-life balance is a priority and you see yourself staying in the LP world, it might not be worth sacrificing your current lifestyle for a few years of intense hours at a GP. Many LPs internally promote, and your current trajectory could still lead to a high-level position without the need for GP experience.
Learning Plateau: If you feel like you're no longer learning and growing at your current shop, moving to a smaller coinvest or secondaries shop with better hours could be a good middle ground. These roles often offer more exposure to different aspects of investing while maintaining a better work-life balance compared to GPs.
Exit Optionality: A stint at a GP does preserve more exit options, especially if you ever decide to pivot back to the GP side or pursue entrepreneurial opportunities. However, if you're confident in your desire to stay in the LP world, this optionality might not be as critical.
Secondaries as an Option: Secondaries can be a great alternative, offering a mix of deal exposure and a more balanced lifestyle. It could also align well with your long-term goals in the LP space.
Recommendation:
If your ultimate goal is to stay in the LP world and prioritize work-life balance, it might not be necessary to take on the grueling hours of a GP role. Instead, consider moving to a smaller coinvest or secondaries shop where you can continue learning and growing without sacrificing your lifestyle. However, if you feel strongly about gaining GP experience as a resume differentiator and are willing to endure the lifestyle temporarily, it could be a valuable move. Ultimately, it depends on how much weight you place on optionality versus your current and future quality of life.
Sources: best job for work life balance?, GP vs LP - Which is better, Is it worth leaving banking if I have it pretty good already
Im in a somewhat similar position. Associate at a small co invest shop after a year in IB. Would like to jump to a HF but if that doesn’t work out maybe secondaries
Not worth it, recruit for LP positions. Delayed gratification for no reason imo.
Thanks, do you really think so? I know if I get an LP role right now I’m pretty siloed into it, and I worry I may not like it because it’s a lot more fund investing than direct investing. Being at a GP would at least allow me more exit optionality … but I know the hours are brutal lol. Also considering growth right now, but I feel like that’s an even further stretch from LP land, though it seems more interesting to me than PE
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