Getting an offer at a HF but love my PE firm

Looking for some advice. I work at a PE firm and absolutely love it. The culture is awesome. My manager is incredible, my skip level is amazing, and her manager is a huge supporter of mine. I get unprecedented access to leadership and really feel like a valued member of the firm. But a major HF is recruiting me, and I’m about to get an offer that will likely be a 30-40% bump. It’s one of the best funds in the industry, but I have a feeling I won’t feel the same way I do about my current firm. On the other hand, if I leave that money on the table, I always know the market values my skills higher than what I make.

Is there any world where I can stay at my current firm and use the offer to get them to counter? Or am I shooting myself in the foot if I tell them about the offer?

I’d honestly tell the current firm you’d like to stay. It is quite rare in this industry to truly like what you do, and if you have a good spot that pays you well / market, I’d prioritize staying.

Is an extra 30-40% comp good? Yeah, for sure. But with HF there is a lot less job security, so the extra comp isn’t risk free. Also it is a huge craps shoot on if you’ll like the new firm / team / role itself. If you do decide to go, I’d try my best to keep the door open to come back if things don’t work out. Saying something like this is a once in a career opp and you don’t want to regret not doing it or something like that.

I would stay. The comp upside at a firm you like and are supported by leadership is very high; even if you're making a little less than you want right now, it sounds like your path forward is clear which is not always the case. It's rare to find that level of support and a job you really like.

HF is a rocky career with lots of layoffs and volatility.

I would also not try to leverage the offer for a raise - you will lose a lot of goodwill and they may just tell you to leave because you clearly already had one foot out the door if you took an interview that far.

I would also not try to leverage the offer for a raise - you will lose a lot of goodwill and they may just tell you to leave because you clearly already had one foot out the door if you took an interview that far.

I always read/hear about this, but I read/hear others say "management isn't going to increase your pay until their back's against the wall, my friend increased his salary 50% by leveraging another offer, they'll respect your chutzpah, etc." How do you reconcile the two schools of thought?

It really depends who you’re dealing with. I posed this same question to my uncle who is a partner at a well-known UMM and he is someone that is definitely understanding of an employees desire to push the envelope and really to be fully compensated for their value. So he’s someone that wouldn’t take it personal. He noted that other senior members of his team would take this as a sign of ungratefulness or lack of commitment to the firm. It really is case by case

Agree with the above answer. I guess with my manager I just know this would erase a lot of goodwill and they'd tell you to take the offer because you're clearly already shopping. Some people might be more supportive of getting your bag but I think it's rare.

I would instead ask for a raise at the normal time, if you are below market bring up what you think market is and have points ready for why you deserve it - rather than saying "firm XYZ offered me exactly $X to go there". But HF and PE pay are never going to be equal - HF has to compensate you more for the lack of job security. Pretty hard to lose your job in PE.

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Couple of other factors you may or may not have considered: 1) Do you have a genuine preference between HF and PE? From a LT career perspective 2) Is comp comparable on both a risk and tax adjusted basis? (i.e. ordinary income vs cap gains, how much is predicated on returns (base, bonus, carried interest) 

I would also caution against using a point-in-time comp metric as a proxy that the "market values my skills higher than what I make". There is absolutely a correlation, but there both multiple ways total compensation is arrived at as well as how an employee is "valued". Your own example of unprecedented access to leadership could be viewed as a significant vote of confidence on your abilities and position in the future of the firm. 

You are in the best position to make a judgment call on how your firm would react to telling them about an offer. Some firm's are understanding of this dynamic, but prepared to answer why you were engaging in those discussions. My suggestion would be to find a logical point in the year and bring up with your manager that you'd like to discuss compensation and maybe even a promotion (again I don't know your title and don't know if this is possible). Set the table to begin talking about it. If you are doing well, you could significantly bridge the 30-40% delta. 

Best of luck with what sounds like a great situation! 

I think living in the moments is very important

But could I ask which firm are you working at, or how to source those kinds of companies because I’m just in a desperate state due to a the bad culture at my firm

Are you a young dude? If so, and the terms are so great with your PE fund id say go for the HF , try it out for a few years. Round out your skill set as an investor.

If you don’t like it. And you really are on such great terms you can always go back

You are seriously underrating the concept of loyalty in the PE world. People care about that and if he leaves to go join an HF, he won't necessarily get the same love when he comes back.

couldn't really tell you stay/go based on what you said and what others comment said, but this comment is an obvious stay. HF can be extremely stressful and that stress will get to you and may impact also your family/kids. Moreover, I see PE more as a a more stable career compared to HF where it tends to be more of a mercenary type of job where it pays higher but with higher risk (lower job security/harder exits into comfortable corporate careers).

Why are people talking about 'going back' so liberally? If you leave a firm, they'll find a replacement innit. It's not that people hate you if you leave, but that the role will be filled

You won’t be able to leverage it for more money with your current firm and trying to do so will only poison your relationship with them.

What you should be thinking about is if HF or PE is what you want from your career long term. If you want to be a HF investor then go to the HF, if you want to be a PE investor stay at your firm. Because these are two very different life paths, base your decision off of what job you want to do. 

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