How many people make it in PE post-associate years?
With on-cycle starting up soon and seeing how people still obsessed about the industry, I was curious how many people who start in PE make it in the long term?
Or is it more of a stepping stone for a lot of people either toward B school or something else? I find it hard to believe a lot of folks who start in PE stay in it.
Private Equity (PE) is often seen as a stepping stone for many professionals rather than a long-term career for the majority. Based on the most helpful WSO content:
Post-Associate Career Paths: Many PE associates are expected to leave after their two-year stint. This is often due to the structure of the industry, where post-MBA roles are limited and typically partner-track. The industry is top-heavy, meaning there are fewer positions available as you move up the ladder, and many associates are encouraged to pursue an MBA to re-enter at a higher level or explore other opportunities.
MBA and Return to PE: A significant number of associates go to business school after their PE stint. However, not all of them return to PE. For those who do, the competition for post-MBA roles is intense, as there are fewer seats than candidates with prior PE experience.
Alternative Paths: Many associates use their PE experience as a launchpad for other careers. Common exits include:
Long-Term PE Careers: While some associates do stay in PE and make it to VP or Principal roles, this is less common. Those who remain often do so at firms with direct promote opportunities or by lateraling to smaller firms where advancement is more feasible.
In summary, while PE is a prestigious and lucrative career path, it serves as a stepping stone for many professionals. The long-term career prospects in PE are limited for most, with only a select few making it to senior roles.
Sources: The PE career path, Staying a third year as a PE associate vs. doing something nontraditional, Q&A: 3rd Year PE Associate ($10bn+ AUM, MBO/LBO, equity, mezz, distressed debt), Life after 2 years in Private Equity, From PE >> Startup >> Back to PE
Varies by fund size but overall maybe 20-30% will make it to post-ASO roles, trailing off substantially with each subsequent title increase and the bigger the fund.
What proportion of those who don't is self selection vs not being good enough
There's no way for anyone to possibly know that
Post Associate at MF? 1% (maybe)
Post Associate at UMM? 10%
Post Associate at MM? 15-20%
Post Associate at random LMM bucket shops? 30%+
This is ridiculous it’s maybe 10-20% at MF, 10-30% UMM etc. And probably 1.5x those numbers once you exclude self selection, low but 1% is laughable
At my growth fund, we'd usually see 60-80% attrition from Associate to VP (Associate => Senior Associate promotion was pretty automatic unless you were truly hopeless). "Regrettable" attrition was uncommon -- those who left were either told they didn't have a path to VP, or they could read the tea leaves. It was pretty rare for somebody we thought was good to go to B-school or leave the industry entirely (though there were a small number of laterals).
The VP => Partner pipeline is a bit more idiosyncratic (so my data is less reliable) but I'd say about a third of people should make it. A lot more departures at that level are voluntary... pursuing entrepreneurship or starting a family and realizing they wanted to relocate / better WLB / etc.
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