Do you have to be work addicted to survive in PE?
Had an interesting discussion with a friend recently. I've noticed that the most successful people in PE (e.g., MDs in their mid-30s at large-cap funds) all seem to have one thing in common: they’re completely addicted to work. Full stop.
It’s not about money or prestige. You’d expect people at that level to be spending their weekends at galas, driving sports cars, or jetting off to some luxury destination. But that’s not what we saw at all.
The ones who really rise to the top just live and breathe the job. We’re talking about people who choose to be in the office on a Saturday instead of spending time with their families. It's hard to explain ... I used to imagine buyout MDs as flashy types who mostly enjoy the money. But what we observed felt more like hyper-intense, work-obsessed nerds. No big parties, no summer time off in the South of France. Basically just grinding away every freaking day.
Like I don't get it . Maybe that it is genes. If I slave away for weeks until midnight or later everyday I just feel burned out, urging for more physical activity/sports, time with family etc. and meanwhile I see those people who are much older who work 7 days a week.
Wtf is this.
Yes. Based in the US at what would be considered a large MM. I’ve truly appreciated my time in PE and thinks it’s a great career where you’re given a ton of responsibility at an early age, but have also realized it’s just not for me. Even if you get to leave early and take some time to yourself at home, it’s one of those jobs where you inevitably log back on when you get home because there’s always something you could be doing to stay ahead of work. Reading CIMs, data room analysis, helping out at a PortCo with an ad hoc market map or quick analysis for your CEO who wants to know the value of his options. It truly never stops until you make it to partner level at which point you’re still grinding to prove you belong. The only person I’ve seen truly relax is the founder of our firm who essentially did the same thing nonstop to get to where he is and finally relax at 65+. No knock on the industry because you get exceptional pay, benefits, and access along the way but it’s not for everyone.
I'm not directly in PE (FO allocator seat) but I talk to dozens of people in the industry every year and I'm getting a general consensus of under 30s (maybe even under 35s) thinking that PE is just not worth it. This seems especially true up market where there is little entrepreneurial spirit and everything is pure grind for what may not amount to anything other than salary + bonus. Not sure what it means 10+ years out for the industry but I think culturally and lifestyle wise younger generations just don't think it's worth it (and the upside is without a doubt lower than it was as a 28 year old joining the industry 20-25 years ago) on a go forward basis.
You are observing what the industry has become as it has now more or less matured. The MD you are picturing joined the industry 20-30 years ago when it was still highly entrepreneurial, lots of start-up / new funds (which many today are well-established names) that scaled up, doing great returns over the last decades PE bullrun of which these guys enjoyed the fruits in the form of big carry pay-outs and GP stakes. These guys in turn hired hard-working slaves / robots with top pedigrees (that were drawn to the industry given prestige / $$) to do the time-consuming analysis/process management work for them (and these guys hired replicas of them in turn - cycle repeats), and all of these guys have now slowly made it to the top echelons as the OGs have (started to) retire(d). Combine that with how mature the transaction market is (relationship less of a component, often PE on the other side in brokered/banked processes, returns heavily under pressure), the large (public), corporate organizations many of these funds have become and you can see why these type of persons have become successful (key ingredient for success is not social, entrepreneurship, risk-taking anymore but grinding, office politics and sacrifising time/life for $$). If you want to become that next MD, better to pivot to another industry that is still relatively young and become enrepreneur(ish) yourself. Otherwise I can tell you with a 100% guarantee you have to become one of these workslaves to become successful at any of these larger funds, and maybe make $10-20m lifetime career earnings (carry is elusive at this point).
What would you say fits the bill of a young industry that's still entrepreneurial?
No just anxiety riddled, extremely insecure, dependent on external validation, and low self esteem. Or have a terrible marriage / home life, where you use work as a form of avoidance and repression of your problems.
Most senior people are complete boring losers who used their career to overcompensate for their deficiencies or to run away from problems in their home lives. Imagine the George Costanza personality more than the Patrick Bateman personality.
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Honestly believe a big part of the problem is the "credentialism" where u grind away your highschool years to get into a good college, then grind away your college years to get a good job, and so on and so forth. And along the way, you fail to experience (or experience a half baked version of) the things required to be a normal, functioning human, like falling in love, learning about yourself/the world, creating art, etc.
Of course....it's true in every PE fund, when "theoretically" you can make generational money, there will be people willing to work like a dog to get there to feed their ego. They need to find religion really, I know several people in PE worth $30-$50m who are some of the saddest people out there..
That’s insane, are they just driven by love of the game? With that much money and taking time off you could go do anything you wanted to do anywhere in the world.
You're observing a trait of most successful people... and you can end the sentence there. It's not limited to PE. To be successful in any career, you need to really be immersed in it and enjoy it. It's not quite the same enjoyment as recreational activities - but it is a form of addiction that drives you to be always thinking about it.
If you don't have that mentality - you'll eventually be outworked / out-hustled by the guy who does. In any field.
Are you sure? I grew up around loads of ppl in top positions in corporate. Even owners of mid-market companies. When I grew up those ppl were considered extremely hardworking but I barely saw/see them leaving past e.g., 8 pm with limited weekends.
This notion that ppl work regularly till 2-3 AM incl. Sundays I never observed in any other career outside banking/consulting/PE.
ignore my username. But I ran a search fund early in my career. Owners of $2-5mm LMM businesses who have built some semblance of a middle mgt/senior leadership team do 100% work 1/2 the hours of the average PE MD. If you ever drive by a golf course on a wednesday and wonder who the middle aged guys playing golf at 1pm, they are these guys. There's no free lunch of course (personal guaranteed debt, the weight of providing for 50+ families so on and so forth) but hours wise, it can be far less than you think, based on the probably 1,000 owners i talked to over 18mo.
Agree with the above poster that that's the cost of success anywhere. You have to enjoy the grind (or a lot of it)... look at any successful entrepreneur, athlete, exec etc. Now, whether PE still carries the potential rewards today to justify the sacrifice involved might be a better question.
That's true for making it to the top of literally every industry. The person that does the most of the best work is going to by default be more successful than people who do less.
Maybe not addicted to work, but certainly addicted to the "thrill" of the deal or at least having quasi-obsessive interest in PE work. It's a highly demanding job, so to succeed you either need to love the job itself or be able to work like a dog. I think many high achievers in the field start in the former, but transition to the latter as they end up doing the same thing over and over across decades.
My father who is almost 70 is the number 2 guy at a UMM private equity firm that virtually everyone in PE would have heard of.
Most of my friends from high school/college have fathers that are already retired or semi-retired. Not my father. I asked him once about potential retirement, and he curtly said: "Not in my lifetime." (I think he intends to die at his desk...)
Is my father addicted to work? Probably. My father has an insane travel schedule that would make David Rubenstein blush (Rubenstein said that pre-covid he traveled for business 240 days a year. My father somehow exceeds this...)
I remember as a kid if my father was at home (not away on business), after mass on Sunday, we would have lunch together as a family and maybe do something else together as a family, but then afterwards he would always head into the office to (in his words) "clean up his desk." (though he would always be back in time for dinner)
I have asked him why he works so hard, and he says he likes "being useful."
Don’t get me wrong, much respect to your father!
But think about yourself for a second…
Do you see yourself living like that????
Let’s say you already made it (hopefully before 50), what’s wrong with finding intellectually stimulating job that you work at for a few hours a day, and spend the rest of the day - working out / playing golf / going to the beach / seeing friends / spending time with family / doing a hobby / reading etc…. Just fucking enjoying the passage of time!
I also have a hard working parent and grandparent like that in my family, and plan to work really hard as I have observed first hand it’s the price you have to pay if you want to achieve anything meaningful in your career (have a chance at least- there are obviously no guarantees…), but while I’ll always want to do something and stay relevant, I’ll probably just want to take it easy at some point.
What are your thoughts?
Do you plan to pursue a same career as your father? Or what different stuff have you seen that made you start at IBD?
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