Do people get let go before the end of their programs ?
Ignore title, coming from MBB, and am fighting for my life here lol. I am working insanely hard and still making mistakes, some of them kind of “careless”, but when you work on a complicated model and have to spend half the time figuring out what’s going on, these things seem to be happening.
Anywho — am starting to get quite anxious. What are the chances that a firm would let go of someone before the end of their 2 year program? What about in the LMM/ MM space?
And does it really get better lol? I check my work thoroughly and have been working very hard, but still am having problems here.
Most firms won’t do this - you are at the end of the day, going to be gone in a year or two. I have seen it happen a few times but those individuals weren’t putting in effort.
Most MMPE firms structure their associate roles as two-year programs. Many high-performing associates choose to leave after completing the program to pursue more interesting or higher-earning opportunities. Only caveat is if the PE firm itself is struggling to raise capital—under those circumstances even senior partners may be let go to downsize (you can read online how a few PE partners were laid off when their PE funds closed down or struggled to raise)
As long as you are genuinely working hard and trying to get better you should be fine. I've seen a couple associates get fired before their 2 year program finished and in both instances the associates were repeatedly making big mistakes and not putting in the effort to get better.
Unless you are at Audax. Widely known the firm has no regard for its people and will cut underperformers a year in
+1 to this. They're far and away the singular firm I think of when I think about firing associates prematurely
The biggest risk is if you do not culturally gel with your group. If you got to PE, you’re likely qualified enough to do the job. The big wild card is that PE firms are inherently cults of personality around the founder / partners and if they don’t like you or don’t feel like you’re sufficiently deferential / grateful enough to be there, they will have a vendetta against you. Small company politics are far more toxic and there is no HR to come in and enforce objective annual reviews or any sort of holistic review of your performance. Your bonus and longevity at the firm is purely how well you’re liked and people’s perception of your competence. Do not underestimate how vindictive these seemingly pleasant and vanilla agreeable people can become if they feel slighted.
Unlike MBB or IB, there is also no incentive to not burnout junior talent. You are entirely and quickly replaceable with another eager body and they don’t want to dilute the carry pool promoting people up. They literally hire your replacements before you even get started at the firm because they know you likely have no future there - you’re just 2 year rented labor. So there is no incentive to care about the WLB or happiness or career longevity of subordinates.
Oh and it’s impossible to plan your life around your bonus timing because at small mm and lmm firms they have no HR calendar and will just pay you whenever they get around to it, which can be weeks delayed. The incentive is for them to delay paying you to keep you around.
That’s why the single most important thing to prioritize in this industry is finding a firm where you culturally gel at and there is room for upward mobility. If you can’t find that, then focus on getting experience and lateral out as soon as you can before you get burned out and have to carry that weight through the rest of your career.
Same here OP. 6 months in and hate this every single day. Feel like I am constantly underwater and at this point think I will try to leave after I get my first bonus.
same boat. wake up everyday just nauseous and confused af, but i am 1 year in, dont mean to scare you and maybe i am just dumb, but it has not gotten better.
I’ve seen it happen but it was mostly political / market-related as in someone had to go due to group performance and they picked someone who the group head just didn’t like / had it out for.
Curious is your firm adopting any AI tools to improve your efficiency? They are growing by the day, like Hebbia for research/model creation / pulling filings, F2 for excel related tasks, ProSights for data extraction, Tie for quality control/reviews/making sure your numbers tie, etc. — might help
Not at a 2 and out, but fwiw we've let go of people 1 year in, usually one per cohort of ~10 people. Last dude who was cut was quite smart and insightful, one might even say brilliant in parts. But he was unreliable af, would go off and do random analysis I hadn't asked while ignoring the core of what was asked. Last straw was when he disappeared on a Thursday without mentioning to me that he's at a family thing and had taken time off (I knew he had Friday off but he didn't mention Thursday too). Came back online on Monday all well rested and jolly.
I often find that people who actually get to the seat and then actually get fired are sometimes the smartest ones, but they never really (or haven’t yet) developed the whole “this is my job, this is my life, I need this job” mentality. Without that you really do have to be somewhat special to even make it to the seat, regardless of connections / target school making it easier / etc.
Curious the % of the PE that is 2 and out vs. the ones that are not. Are most still 2 and out nowadays?
I was at a $5bn+ firm and underperformed for the two years (sounds exactly like you describe it) as it was Covid so I couldn’t get properly trained, but I fit in well and put in unbelievable effort. They sent me on my way to H/S, have been great references, and I’ve found different investing work where I do a great job.
It’ll be fine. It’s not for everyone and that’s part of why there’s a whole class of associates. Usually half of them end up pulling most of the weight.
It’s OP. FWIW, in my case it actually does get better. I reread this and can remember how anxious I was feeling so wanted to offer a couple thoughts if anyone in the future reads this:
1. MBB to PE is very hard. Breaking in is actually the easy part and it is quite difficult. Doing the actual job is quite tough. The transition for basically everyone is actually extremely difficult. I’ve found though, there is a bit of a selection bias in that if you’ve pushed hard enough to go from MBB to PE , you probably really want it, and then will be willing to push through walls to get through it .
2. Relatedly , your first 6 months or a year is going to be pretty difficult , especially from MBB. That doesn’t make you dumb, it literally just means it’s a different skillet than what you’ve had before
3. If you want it , power through it, it DOES get better.
4. Relationships are everything. To the points in this thread , there are inevitably going to be seniors at your shop you don’t jive with. What is absolutely key is you find ppl you do jive with and you stick by them, and avoid the people you don’t jive with at all costs (though you do get better as I say, so someone who doesn’t like you might actually like you in 5 months when you work with them again). It is absolutely just like consulting where you need supporters, and just like consulting , if you have no core supporters, you’re probably not going to enjoy it nor will you be there for VP+. PE is a bit different than big consulting firms in that there are fewer ppl who work there, so it is certainly possible , depending on the firm, you have no core supporters and that can have nothing to do with your skills and abilities (and in some firms and cultures it can be harder to get these supporters than others). If this is you , just learn what you can and lateral if you want.
5. To answer my own question, firing PE associates is generally a very bad look and only something a firm would do under very extreme circumstances, if even that. I’ve heard of people being complete jokes and doing their 2 years. For all intents and purposes, if you actually want to be there , are trying hard, etc, you should not worry about getting fired within your program.
6. Finally, your career is not everything . This is a bit of a nuanced topic because I do actually stand by it being better to grind it out in your early to mid twenties, and to be ruthless with feedback etc. But as I say, you’re prob going to suck for your first bit in PE, that is certainly not fun, but it’s rewarding and part of the process,
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