Do you just stay in PE forever? Is there a next big thing?

So I fast tracked the path and did target undergrad -> 6 mo IB -> buyout PE. I feel strange not networking and interviewing 24/7 for the next “level.” What has everyone else done since making the PE move?

 

HF seems to be pretty similar comp over the long run with more risk/hours, no? I initially wanted to do VC, got offered 70k out of college and found out most most shops are paying under 200k all in unless you’re in a senior position. Growth also just seems like lower comp PE.

 

People hype up "the path" so much that they lose sight of how short into your career it gets you.  There's tons of opportunity out there beyond just PE.  I've had friends go the start-up route, get into more corporate roles, jump to the LP side, try to launch their own search funds / family offices, get into real estate, etc.  Had one former colleague that moved to South America to just lay on the beach and bum it for a while. 

Sounds like you have a nice pedigree - would highly suggest you do some self-reflection and figure out what interests you and what you like/dislike about your roles thus far.  

 

I think people trying to follow the path are trying to accumulate as much wealth as possible in order to have access to as much fun/fuck you money as possible.

I tried the startup path, blew 100k on that, and realized just buying out a steady company with $3m+ EBITDA is a lot easier to succeed in/much easier to get a team in place and coast. I’ve

I guess my real question is, how, as a 21 year old PE associate, can I best position myself to accumulate as much money as possible to build a family office by 30 and chill out? I’d assume the $8-12m range would be best for starting a multi-strat with a mix of 1-2 decent EBITDA companies and some real estate.

 

I can tell you right now that there is slim to no chance that anyone in PE is accumulating $8-12mm in wealth by the age of 30.  Building that kind of wealth from scratch in PE requires sizeable carry allocations across multiple, successful funds and that typically isn't happening until you're a principal/partner.  PE is a solid career path and will guarantee you a comfortable lifestyle, but if you want that kind of outcome by age 30, I would look elsewhere.  

 

Is the $3mm ebitda co buyout something you have done or just considered? Seems like an interesting path post PE associate stint

 

You will shoot yourself in the foot if you keep moving with short stints. Do at least 2 or 3 years in your current seat. if you decide a different type of PE, a different area of finance, or even MBA makes sense for you, do it then. Until that point, focus on doing your job well and use the extra time to develop your real "adult" life - hobbies, friendships, and relationships are a lot harder out of college.

 

A competitor of my company's PE sponsor (O&G) has started this program in house where their associates work at the fund level for 3-4 years and then formally get placed into a Director/VP of Finance role at one of their portfolio companies. It's fairly nascent, so not sure if in the event they monetize the investment via sale if they then go back to the fund or go to another PortCo or what. But I think that's probably a good precedent .... IB > PE > Corporate Officer

 

They do, they just dont realize it until they hit Y2 VP and suddenly find themselves stuck or shown the door (i.e., once its too late). I think in LMM it is a bit more manageable and also easier as hours are typically (not always) better, but again it requires a ton of effort over a very long horizon before you're even potentially make that leap. I'd estimate 98% of the people beginning their career in IB / Consulting never even reach VP+ eligibility. 

 

Congrats on finishing step 1. You are approximately 1/20th of the way to finished.  The next thing is just doing the work day-in and day-out and developing the skillset to advance/get promoted.

Put in consistent effort for 15-20 years to be a top performer, hope that a number of things out of your control work out (fund growth/returns/promotions, lateral transitions, macro environment), and you end up making partner.  With some luck and years of grinding, you'll have your 10M realized NW and maybe anther 20M in carry by then.

My advice (from someone ~10 years in) is to stay humble, put in consistent effort and try to just enjoy your career and life.

 

This hits the nail on the head. Congrats on the success so far... target undergrad, IB (short-lived), to PE. You've shown you can network and recruit.

But now you need to prove that you can actually do the job and consistently get better. You'll hit many rough patches in your next 5-10 years on the job - your ability to overcome these hurdles will be a testament on how far your career will grow. Work hard, stay humble, and best of luck. 

 

It's a good question and there's not really a straight answer as there are lots of paths that you can take that others have mentioned. 

Staying within PE and becoming a recognised expert in your sector is definitely one option, another would be to look at VC. As a complete opposite you could move to more of an advisory/non-exec role for companies within your field of knowledge, providing some insight as a board member of a portfolio of firms. 

Another choice which I've known two people to do who are a little more my senior is to take a break away from working full time for a bit and study for a masters or even complete a bachelors in a subject matter they're passionate about. 

At the point where you're pretty well seasoned in PE you've proven your skillset and ability so you have a reputation and no doubt a resume that shows it. It's a great time to take a year or two out and focus on yourself or start a family etc. 

 

You sound like someone who is obsessed with optionality and I don't blame you. After all, who wouldn't want to be a in a situation where it's "Heads - I win!" and "Tails - I don't lose"...? It's very enticing to be able to enjoy seemingly endless possibilities without being on the hook to do anything.

At some point; however, you are going to have to figure out for yourself what it is you truly want in life... otherwise, you are merely collecting "stamps of approval" and safety net upon safety net.

 
RetireExcel

need to be in PE for the long run (Partner) for it to be profitable. Otherwise you might as well do a 6 month CS bootcamp and get a $300k job working 40 hours instead of $250-350k at a PE working 70 hours. Software engineers mostly cap out at $800k so PE partner is still better on an hourly basis  

The fact you think all it takes is a learn to code bootcamp to earn $300k as a SWE indicates you probably shouldn't be chiming in.

"The obedient always think of themselves as virtuous rather than cowardly" - Robert A. Wilson | "If you don't have any enemies in life you have never stood up for anything" - Winston Churchill | "It's a testament to the sheer belligerence of the profession that people would rather argue about the 'risk-adjusted returns' of using inferior tooth cleaning methods." - kellycriterion
 
Funniest

"Greatness"

Reminds me of an old blog post, repasted below.

Breaks In The Track

I sent the email last week:

Friends and colleagues,

After two very educational years, the time has come for me to leave Goldman Sachs. Beginning in August, I will be moving on to my next adventure, The Carlyle Group in New York. I have attached my updated contact information below, and look forward to keeping in touch.

Warmest regards,

It took me like 6 hours to craft that exceptional bit of prose, but I think it turned out quite nicely.

To be truthful, I had already been pretty checked out for the past few months. Ever since I got my PE offer, things were almost pointless. Most recently, I’d taken to coming in at like 11:00am and, in general, not really giving a FUCK.

I still got everything done exceptionally, of course, and I still came in some weekends, but it was almost just out of habit. Then when the summer started and the clueless “ex-entrepreneur” MBA summer associate starting coming to me asking for help, I would just peek up at him from behind my kicked up bare feet, and tell him: “Give me a shout on Monday.” I’d look annoyed, as if he’d interrupted some sort of bare-footed piece of analysis he’d never be able to comprehend, and to accentuate that I didn’t really want to be bothered on Monday, I’d shoot him a look of I-don’t-give-a-fuckness that screamed: “What’s more busted bro, your dot-com or your girlfriend’s face?”

And now I’ve left, and I’m jobless. Well, I’m obviously not jobless, but that’s the liberating feeling of all breaks along The Track:

The Track is what separates man from beast. It’s what separates Banker from every other ungainfully employed idiot that exists out there. It’s magnificent in its simplicity and supreme in the rewards of its end-state.

And thank god it’s set up how it is. When an “artist,” writer, or other unspeakable is “in between jobs,” he ends up giving blood 12x a day, wearing homemade jorts, and living off Gray’s Papaya (or whatever the outer-borough version of that is). When a Banker is in between jobs, he’s just fucking around for a couple months with >$100k savings until the next leg of The Track begins.

I’ll admit, I’m rather enjoying waking up whenever the hell and going to the gym 2x a day. Just this week, I watched Transformers in the theater at 3 in the afternoon after lifting. Halfway through that exceptionally manly movie, I felt like a meathead trader I was so jacked up on testosterone. I almost picked a fight with the dude in front of me, but instead of absolutely destroying the 85 year old, handicapped Asian man, I went home and stood in front of my full-length mirror and watched myself rapidly change from my street clothes into my Banker clothes.

One second I was an innocuous American car, wearing shorts and a polo. The next second—BAM! I was transformed and growling back at myself in a $3k bespoke suit, 1000 feet tall, ready to shoot M&A lasers out of my elbows.

The Optimus Mother Fucking Prime of Banking, baby.

Then I chuckled to myself and made a clever joke about the demise of Optimus Subprime, a once promising autobot.

Now, I’m going to “travel.” I’m not entirely certain why, but it feels like the right thing to do. There are a handful of developing third world nations I’ve heard are worth visiting: Turkey, Croatia, Fire Island, et.al., and this is the time to conquer them, if ever.

I may go through the motions of seeing a couple sites, but the experience is more so that when I do start work and people ask me what I did during my time off, I’ll be able to casually say: “Oh…I was traveling.” And then, we’ll bask in 15 minutes of stimulating conversation about the insanely high prices of Icelandic beer and the rich body of Turkish tobacco. After a few days, I’ll start circulating some lavish sex stories involving me, an excess of HRK, and several runway models with broken English—just so the word gets out that I’m “’bout it.” The message will disseminate, and I’ll be set up well. Actually—if I didn’t take this time to travel, I’m not even certain how I’d break the ice.

Anyway, after rounding out the European leg of the trip boozing on my boy’s yacht in Istanbul and abusing whatever the Turkish word for “baller” is, I might even stop home for a spell. I project I’ll be able to stand at most 2 days before I’ve grown disgusted of my friends that were fun in the moment but never made it past community college and will have completely exhausted my phonebook of elementary school teaching sluts that try ferociously to reel me in with their expertise in homemaking. Poor suburbanites.

Soon after, this break along The Track will be over, and my next “adventure” will begin. While it is fun living this jobless lifestyle, I’m glad I’ll be back at work in a few short weeks—the economy needs me.

 
Most Helpful

Congrats. You've got a ticket to the game. Now you can actually figure out what position you want to play. 

A rough analogy for your situation is successfully getting drafted and then asking everyone else in the players' association, "What's the next big thing?"

The goal is to get great at something so you can create enough value that you're able to capture some meaningful measure for yourself. You have the freedom (and responsibility to yourself) to maximize your skills and abilities in whatever way satisfies you most.

Your comment about no longer "networking and interviewing for the next level" shows limited thinking. Everything you've done in this regard so far was very one-sided and transactional. "Hi, I want to meet you, I have nothing to share with you, I want a job and you can potentially help." You now have the gift of offering people a mutually beneficial relationship with no defined ask up-front. 

It is only a good thing to think about what kind of value you present to the people you encounter. It's not manipulative. Your intent shouldn't be "what should I give this person so they give me the thing I already know I want." It should be "what can I give this person that they would appreciate" - irrespective of what you think they might be able to give you.

Say you hear the seniors talk about a continuation fund in I.C. one week. This piques your interest and now you're really keen on learning how private equity firms get liquidity on late-lifecycle investments.

You could go look for junior lawyers who are a couple years away from making partner (it's usually eight years as an associate in BigLaw, sometimes seven for studs) who specialize in secondaries or SPVs or related structuring.

You can email them directly, tell them you have been reading up on the space out of personal interest, saw an interesting deal in their bio, and would love a short phone call to share what you know and see if they can point out any resources that would be helpful in your journey.

Many people won't reply. That's fine, such is life. When someone does agree to speak to you, be a good human. Have a really compelling and compact intro. "I'm guy and I'm an associate at Firm trying to learn more about secondaries" is pretty listless.

Way better to start a call off with "I'm fortunate to have a seat at a fund with a strong fundraising track record. One aspect of the firm I really appreciate is the opportunity to listen in to the partners discussing higher-level market dynamics. I recently heard a bit about secondaries, GP-led deals, and how this market has grown ... it made me want to learn more. Can you talk to me about where I'm best off trying to dive in? Anything is helpful, I'm a beginner."

People respond to genuineness. They also respond well to a compelling narrative. Be genuine and have something awesome to hook people with.

As you progress through the conversation, always look for little hooks people leave dangling. Did they mention something about law school? Ask what it was like, how the teachers were, whether the culture was cool. Something about having to travel for work? Ask what that's like for a lawyer - is it a quick trip like bankers do, or are they ever embedded for awhile at the client's location? Did they mention something about trying to exercise more? Ask what they like to practice for fitness.

These are a wonderful way to demonstrate an interest in the person you're speaking with. That's important; you should be looking to connect as a human first and foremost. These also give you all kinds of ground to find commonalities. Commonalities give you all kinds of follow-up material.

A week after you sent your quick one-line thank you email sharing your appreciation for their time, you can shoot over links to two books and a Youtube series on home calisthenics since they mentioned doing bodyweight exercises while rehabbing from an injury. Or if they mentioned attending Columbia Law School, send over a video of a talk a professor gave and ask if it's someone they knew.

Cold emails are fine. They're most easily done when you mention a natural and lightweight reason to reach out. In terms of staying on top of people you meet, just dropping people an email like mentioned above every couple months is great. If you develop a habit of sharing things that make you think of people any time you come across those things, this will become pretty natural over time. If it's been several months since you spoke to them, feel free to stick in at the end of your note "It's been awhile, want to catch up for 15 minutes on the phone sometime?"

As you develop relationships, you will start to see opportunities to connect people who don't know each other. When one person talks about a new interest in cycling and their struggle to buy their first expensive bike, you have a slam dunk if you put them in touch with a guy you went to college with and reconnected in similar fashion with who is a nut, owns four bikes, and does endurance competitions.

Relationships get meaningful the more personal they are. You can improve that through:

  • frequency of interaction -- someone you speak with monthly is closer to you than someone you talk to twice a year
  • length of mutual acquaintance -- someone you've known for four years is a better contact than someone you met at a conference six months ago
  • level of intimacy -- relationships where you both know heavier things about each other are usually sturdier; if someone mentions a miscarriage and you talk about a relative's death, there's a gravity to your friendship
  • degree of overlap -- the more you have in common with someone, the stronger things can be; someone from your analyst class who also exited to private equity who is also at a direct-promote shop that won't push you out to b-school who also just got engaged and is also thinking about buying a home is a person you can raise a whole host of meaningful topics with

The more meaningful the relationship is, the heavier an ask you both can make of each other. This is how you can ask for harder intros, recommendations, resources on an industry, and so forth.

If you do this for five years, you'll have a broad spread of relationships where people are happy to just catch up and share happenings, trade resources, make introductions, or give advice. If you practice it proactively, you can build really powerful and useful channels in spaces or on topics that really interest you. Roll that over a decade, and you've really given yourself an uncommon power.

It's awesome that you got to an investing role so quickly. Don't lay back and just do the work. Go out and make things happen for yourself.

This is how you create unique opportunities. Launching a new strategy at a great firm (A.J. at Thoma Bravo with Discover). Leading a new sector build-out for a fund you've always respected the people at (Moritz Baier-Lentz at Lightspeed). Partnering with a sponsor to do a NewCo in an operational role (Bob Mudge with the ILEC carve-out with Apollo). 

Nothing comes to you. You have to make it.

I am permanently behind on PMs, it's not personal.
 

Sequi est quo sint doloremque ut similique esse magnam. Consequatur voluptatem hic nesciunt neque voluptatum et.

Nesciunt et quidem natus qui. Vitae nostrum aut quas tenetur eos nihil nemo. Reprehenderit expedita ipsam et laudantium voluptatem. Architecto tempore culpa quos quas. Atque ducimus laboriosam labore hic velit assumenda.

Voluptatem et eaque quod nostrum. Laborum quo corporis facere similique error ut. Aut nisi aut qui vel atque at. Dolorem odio voluptate doloribus consequuntur tempore. Corrupti ipsa ut sint ut provident.

Ea accusantium quos consectetur corrupti voluptate est. Illo dolores distinctio consequatur. Eligendi non consequatur sit tempora. Dolor quis qui omnis placeat iusto qui ea. At eius voluptatem minima est temporibus accusantium. Veniam earum in perferendis voluptatem odio. Qui commodi aut adipisci.

 

Quasi saepe fuga maxime debitis laudantium. Itaque vel dolore est minus. Impedit odit ab iste.

Aut dolor possimus occaecati vel et iste autem. Id laborum qui voluptates et voluptates. Dolorum velit aut quasi quaerat et laborum beatae iusto. Fuga molestias exercitationem quo doloribus repellat sint. Dolorum iure dolores repellendus dolorem ut quis. Quidem ipsum et nihil consequatur. Qui libero rerum molestiae quaerat tempore ipsum.

Repellendus expedita sed qui sunt. Repudiandae quaerat est molestias. Laborum similique iure velit molestias repellendus. Qui voluptatum dolorem unde.

Voluptatum tempore qui sed perspiciatis sunt quidem facilis. Neque ipsam repudiandae cum nulla dolore pariatur. Delectus amet animi non.

Career Advancement Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Warburg Pincus 99.0%
  • Blackstone Group 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

March 2024 Private Equity

  • Principal (9) $653
  • Director/MD (21) $586
  • Vice President (92) $362
  • 3rd+ Year Associate (89) $280
  • 2nd Year Associate (204) $268
  • 1st Year Associate (386) $229
  • 3rd+ Year Analyst (28) $157
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (313) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”