Growing UMM/MM vs MF (Warburg, Bain)
Take risk and join a MM that is doing really well (more than doubled previous fund, almost UMM) or join MF straight out of undergrad?
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Depends on (1) what you define as "almost UMM" and (2) do you want to be a career PE investor.
If it's a larger UMM (latest fund size $7Bn+) with great trajectory and is career-track, plus you want to pursue PE long-term, then there are no better options than to take the UMM offer if you want to maximize risk-adjusted career earnings.
Only exception I can think of is if you want to do HF or if you want to do an MBA, but HF is arguably a dying industry with a poor risk-adjusted career earnings profile, and MBA is becoming increasingly unnecessary for PE. Most if not all career pivots can be done from PE directly instead of going through an MBA as well, without 2 years of forgone income, work experience, and tuition.
Check out this recent thread which has a pretty detailed discussion around this topic - the broad consensus is that a high-performing UMM is a vastly superior choice compared to a 2-year MF associate role, but those career-track UMM roles are extremely rare, thus much more competitive than the 2-year MF seats.
Hot take: I'd rather be at a privately held fast growing UMM than a public MF | Wall Street Oasis
Judging from your post, however, it seems like that firm isn't an actual UMM just yet.
del
It’s Alpine
congrats on parthenon
del
Prioritize brand while young. Should take MF. Additionally, likely has more built out training.
Younger is also arguably the best time to take risks since you have the most time to recover. Just depends on risk tolerance. Both can be justified based on how risk-tolerant you are. The consensus and vast majority opinion on WSO and amongst most juniors I have spoken to at BB/EB's is that growing MM/UMM is the best seat for anyone who wants to do PE in the long run, though.
I know someone that prioritized brand over everything and got the gold plated 2+2+2 resume. He ended up getting cooked by the job market despite his insane pedigree. Not sure if this will change your mind on the power of brands but it certainly changed mine.
This is an increasingly common outcome I'm afraid. It's really interesting when you compare classes from top banking groups and where they are 4 years out to the banking class in the same group even just five years before them where they got the full benefit of the alts tailwind/falling rates.
Some people with this brand mindset also have this conceit where they think they'll always be able to "move downstream" or "fall back" on some smaller fund but the reality is, the people working at credible MM/UMM funds aren't qualitatively so much worse, benefit from 2-3 years of training/mentorship/political capital and therefore between a star third year associate up for promotion and an unknown MF associate who got pushed out, it's not hard to see why it isn't a slam dunk for the ex-MF people (and especially after the last couple rounds of massive MF class sizes; I know some certified clowns who work at MFs).
This is the thought process that leads you to end up in the hedonic treadmill like so many IB/PE seniors who have no savings despite making high 6 figures - 7 figures in cash comp/yearly.
Bain is trash. Warburg id take
How would you feel if you hadn’t eaten breakfast this morning?
Here's a comment from another recent thread on the consensus that a career-track UMM PE seat is more desirable than MF PE seats.
A good point mentioned here is the real risk of joining MF PE as an associate - have seen plenty of former KKR / TPG / Silver Lake associates that are unemployed or forced out of PE after getting pushed out.
Also have seen many more MF PE associates that went on to B-school with high hopes but ended up realizing the brutality of post-MBA PE recruiting and struck out without a PE offer.
The so-called "brand value" of MF is overrated nowadays with firms like CD&R having 50+ associates in their NYC office alone, and believe they have another 20+ associates for their incoming class... When you are just one of the hundreds of MF associates in the job market, any sort of "brand value" becomes completely diluted. You'd also be at a disadvantage to the associates at the leaner, career-track UMMs in the event that they decide to lateral, since:
(1) they have greater negotiating leverage, with the option of staying at their UMM, while you were pushed out involuntarily
(2) leaner associate classes provides better deal exposure and resume, which is key to PE mid-level recruiting
(3) they are more encouraged to develop an "investor mindset" since they're nurtured as potential future partners as opposed to being treated as execution monkeys that the MFs discard after 2 years
Furthermore, the entire post-associate job market (for $4Bn+ fund size firms) each year are probably looking at less spots than CD&R's associate class size, so there will continue to be a huge supply-demand mismatch going forward for the MF PE associates pushed out every year.
Take the MF :)
Don't see a single reason for taking MF over a growing UMM/MM, except maybe if you want to go to a HF. Simply put, whatever you want to do, the UMM/MM offer is better... because it's simply just going to be a better experience. The hard truth of MF life is that there's no realistic path for you internally. Partners and portfolio company execs will explicitly treat you like trash because it's explicitly a 2-year program. At a large number of growing MM/UMM firms, you are actually treated like someone on a career track and thus given more portfolio experience as well as actually learning how to invest. Will note here: some MFs aren't 2-year programs (believe Apollo is one; but they will still treat you like shit because it's Apollo) and I am sure there are UMM/MM's that are 2 year programs that don't care about you but odds of this are much lower.
From a corp dev perspective, lots of the people coming are in from our former sponsor, and most MFs do not help with port-co placements as much. Even without old PE firm help, we would much rather hire someone from a UMM/MM background, given they have more experience at our size (I am at a UMM-sized PE portco), pretty sure this is the case across the board. There are simply far more companies with high corporate comp in the MM/UMM space, whether they be start-ups or PE portco's, than there are mega-cap companies.
Only thing I would add here is that not all UMM opportunities are the same. There are many UMM funds that are just as bloated headcount wise as MFs, so you should definitely do your diligence before automatically assuming that UMM = better to upward mobility.
Go to the firm with the more established analyst program with track record of promoting analysts up to VP.
The analyst programs have high variance and half the firms don’t know what they’re doing with people directly out of undergrad.
Bain and Warburg’s programs have both been successful for over a decade.
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