Drawing the Line
Obviously everyone wants to go IB>MF, but there are a ton of analysts moving out to smaller shops with lower comp, less assured career possibilities, etc. So in making the move from IB>PE, where do you guys draw the line in terms of comp/firm size/fund size? Said another way - is there a point where you turn down PE, do another year of banking and try again?
This is entirely specific to the person. Some analysts are so burnt out, they're happy to take anything that offers a change of pace; others are happy with their IB environment and don't mind staying another year; others are dissatisfied with their offers and give it another try in the following cycle; others really just want a buyside job, irrespective of fund size. It's almost impossible to judge which category you fall under until you start interviewing and have had time to assess where you want to take your career.
While funds of all types and sizes technically fall under the umbrella of PE, they offer very different things to employees, particularly at the junior levels. Using extremely general terms, larger funds tend to offer better pay, larger deal sizes, and better b-school placement at the expense of work/life balance and broad responsibility. As you move down in deal size, the positive factors decrease and the negative factors are lessened. Again, this is a generalization. When looking for a job in PE, you should determine how you value each of these factors and pick a fund that fits for you.
I certainly don't mean to make it sound as though only those analysts in desperate times "settle" for MM PE gigs. That phrase was meant more holistically, in the sense that I have encountered plenty of IB analysts who being recruiting aiming for - say - upper-MM PE jobs and strike out. After a few months of constant interviewing and heavy workloads in IB, I've seen many accept the first offer they receive, regardless of whether it "fit the bill" of their recruiting preferences. Admitting the obvious confounding factor, viz., people tend to receive offers at firms at which they "fit", I still think the "take anything I can get" mindset describes a decent chunk of the burnt out IB crowd.
As flawed as the mindset may be, my experience has been that most IB analysts enter their 2-year stint aiming for large-cap PE or HF jobs. Even after 7-8 months on the job, when the main recruiting cycle for PE gets rolling, I would say most BB / EB analysts are hoping to score the "best" (i.e., most competitive) jobs available.
It's not until that first week, during which most MFs begin and end their recruiting cycle, when the overwhelming majority of analysts find themselves "left behind", that people wise up and are able to evaluate more objectively what they want to do. In a way it's mollifying, because it relieves otherwise over-achieving analysts from having to make tough choices between taking a competitive job at a MF about which they may not be that excited and dipping their feet back in the water shooting for a MM role.
In practice, although many BB / EB analysts outwardly revile the idea of "banking 2.0" at MFs, I have rarely, rarely seen analysts turn down MF offers. And, in the 1 or 2 cases I have observed, it was a preference for a prominent upper-MM fund (H&F, LGP, Berkshire, etc.) over a notoriously tough-cultured MF (KKR, BX, etc.). On the contrary, I've encountered dozens of analysts turning down offers at smaller funds for one reason or another.
I think once you get into the industry, you start to appreciate how minute is the spread between working at KKR vs. LGP and how much more culture, career trajectory, etc. matters. The reality, however, is that most late-1st year analysts are still aiming to make the best "career move", irrespective of lifestyle, culture, etc. After all, PE is still viewed as a 2-year program by most.
In this scenario, where PE is the end goal, wouldn't personal fit and upward mobility be more important? I wouldn't think size or brand name would matter, as long as the firm isn't having trouble raising funds.
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