How many of you guys are actually happy in PE? What are your plans?
Did IB 2 years now 1 year into PE and hate it. Stress is just way too much for me, and I feel like a loser / weakling but it is what it is. I am seriously thinking about moving to a corp dev / strategic finance role and getting my life back.
Want to know how you guys are feeling, mental healthwise. Should I just tough it out? Even though I am so miserable to get out of bed every morning. Also think the promotes are not guaranteed at all. I Are you guys planning to try to rise to partner? How difficult is that realistically?
MM PE spanning growth & buyout, 2nd year as a Sr. ASO with a clear path to VP, 4+ years in PE 6+ YOE - it's a solid spot and I could see this going well into Principal/MD if I don't massively fuck up. That said, I don't love it. The emotional stuff dried up during the ASO years, it's bled out of you. The stress is a lot, especially the part driven by overbearing seniors who seem intent to add busywork and unnecessary complexity to day2day workflows to squeeze out some surface level metrics they can see on a dashboard but don't actually result in more capital being deployed (hint: it's their stubbornness; albeit some could be seen as "dedication to the thesis"). It's becoming harder and harder to get the deals you like at a price that's reasonable, which means bonuses tied to deployment in part or whole are not ideal... I wouldn't mind going back to corp dev (where I started) if I could secure total comp >$250k with <70hrs a week with consistency, that would be my most likely stepping out direction with the objective of working closely with C Suite and taking on some operational experiences that I could leverage towards my ultimate goal.
Overall my biggest interest is acquiring a business and using its cashflows to acquire other businesses, not necessarily related ones but just to build a personal portfolio that can scale. It's a big risk though, and I'm not personally in a situation where employment risk is something I'm eager to take on. That said, I've identified a few candidates and am trying to get enough ducks in a row to where I could try to pull the trigger.
250k in corp dev should be doable for your experience level shouldn't it? Did you move directly from corp dev to PE instead of IB?
I have geographic restrictions and a relatively specific set of company types I would want to do this with which makes the role harder to find than you think (at least these days, it was undoubtedly easier 3-4 years ago). Not all corp dev is created equal.
$250k+ for what would ultimately be corp dev middle management is only really achievable at a very narrow set of specific companies
What comp do you think is typical at his experience level? Would most options be more like 200k or less?
Frankly, most are less. $150k-200k is a pretty common range for a manager (tried interviewing for a Director gig which is 1 level below VP and C-suite at a $10b+ EV but couldn't swing it over another candidate w/ 10+ YOE), would generally need to be a $5b+ EV to see it get into the $200k+-250k and those aren't hiring the function as often in regions I prefer, then add filters for my specific orientation towards biz strategy & ideally a heavy M&A activity + not being roped into the FP&A side (which is what happens for some bigger corps, comp in those situations takes a hit).
Best case scenario, 3 years of IB/PE experience can get you a manager role. Most manager roles are going to be in the $125-175k range, although with 3 years of experience you would almost guaranteed be at the bottom of that range. However, 3 years of experience like that means you are almost guaranteed to join as an analyst. Analyst compensation is more in the $80-125k range. And these numbers are salary plus year-end bonus. This is not inclusive of any deal-based bonus (ie - a $10k bonus that gets paid out for each completed deal), any signing bonus, etc.
In corp dev, the team is generally analyst-manager-director-VP. This broadly lines up with IB's analyst/associate-VP-MD-group head. Corp dev teams are part of normal companies. Their job hierarchies are what you'd see if you went into a normal business. And the compensation broadly matches this.
Is this for NYC/SF or would those have a premium too? Is corp dev typically paid in-line with the other corporate finance functions? If it is then something like FP&A even seems like a better route to move into broader senior level corporate finance positions down the line? Unless one is dead-set on corp dev as the end goal.
These ranges are inclusive of a NYC/SF premium. Those locations would just be at the top of these ranges. I should also stress that these are generic ranges. I personally know of companies both in NYC and outside of NYC that are both above and below these ranges. I know people who have been able to leverage their unique personal experiences to be above these ranges. These ranges are meant to capture the most likely comp, not all comps.
Broadly speaking, the entire CFO organization will be paid in a very similar way. So tax, investor relations, accounting, FP&A, corp dev, treasury, etc will generally have very similar pay structures. There may be some nuances, but they should be in the same ballpark.
In terms of getting into progressively senior roles, there is a general element to this and there is one that is somewhat unique to corp dev.
In terms of the general element, think of all those aforementioned teams as silos. You don't need to get experience outside of the team to become the VP of corp dev or the VP of tax. However, to move beyond your silo (which generally is to a CFO role), you will be almost guaranteed to need experience in multiple silos. You will need experience in the corp dev team and the IR team. You'll need experience in both treasury and accounting. Generally speaking, to move beyond running an individual team means you are the CFO and to be at that level you generally need experience in more than one silo. This isn't always the case, but this is generally how it goes. So whether you are in FP&A or corp dev, if you want to move to a more senior role beyond "just" running the team, you will need to get experience doing other functions too.
However, there is also a more "unique to corp dev" opportunity. If you are in corp dev, you are more likely to be able to lateral into an operations role than any other team that typically reports up through the CFO. If you want to get into the operational side of the business, corp dev is the only CFO report that really enables such an opportunity
I am wondering how much of your situation is mostly firm-specific versus PE as a whole.
Would you say your views of PE have shifted massively since you started in this specific role? Imagine it’s a combination of your firm’s investment strategy coupled with your seniors’ ways of working.
Appreciate the post! Helpful viewpoints. I’m in a similar spot.
It's really not re firm specific. Differing degrees for different firms but generally speaking these are ubiquitous frustrations across the dozen+ other ASOs/VPs I know well enough across other funds to talk about this kind of stuff, and quite frankly my gig is WAY chiller than a lot of folks'. My view on PE hasn't really shifted it's more that my long-term goal has developed more and I'm less enthused by PE itself than I was when I started. It's a great job, you'll make a lot more money than 99% of people, and there's tons to learn and leverage for yourself in the future. But that's not my ideal world.
You're in a good spot then. What sectors are your potential acquisitions in, and how did you pick these businesses?
Don't want to disclose too much. Suffice to say they're a LMM/M PE-sized, privately-owned business in a highly fragmented & cyclical niche services sector that have never taken outside money. Picked them because it's an industry I've developed a specific view on how technology can be sold alongside their very sticky services base to make things even stickier e.g. compliance, integrated payments, etc. It already throws off cash like a monster so there's a lot of M&A opportunities as well.
Not much to add but in the same boat. Got nod to Sr Asso but don’t know how much longer I can last tbh
Thanks for the comment, I feel better others feel the same exact way and I am not some odd man out
Same here same here - got sr associate offer but really not about it…job sucks
Thanks for commenting, always glad to see I am not alone.
Curious, what is it for you? Mine is just the absurd amount of stress. Hours I got used to in banking (obviously hours suck too) but I just feel so anxious and uneasy all day everyday.
Fully agree on the stress/anxiety. It’s another level compared to banking. Saw another similar thread on this yesterday actualy…
I also fundamentally find the job not as interesting or stimulating as I expected. What i DO like is my industry, learning about different / new companies, interacting with portco folks / management teams (i.e. people with actual souls / personalities), etc. Is this a huge part of PE? Yes - but it’s fundamentally also a huge part of MANY other types of investing jobs (VC, i’d even argue pod shop life, etc.). Wouldn’t argue ONLY pe offers that experience.
Private equity analysis itself is just false precision imo. What’s the point of building out an insanely detailed quarterly revenue build and model when we all know the final “product” will just be a 15-30% discount to sell-side case…
Could be worse- at our infrastructure fund all of our projects are going to zero and I’m probably getting laid off soon. Happy to watch the firm implode from afar though
What kind of infrastructure deals are you guys focused on? Have to be some off-market high risk strategy when infra I've seen is typically contracted revenues and/or regulated rate of return
Niche renewables stuff
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