Interesting IB Exit Scenario: Very Overpaid corporate job, or UMM Brand Name PE?
I have a really interesting scenario.
I am in IB at a strong group (GS TMT, MS M&A, CVIEW) and have been throwing out applications and talking to recruiters.
One offer is PE associate (along lines of CDR, Veritas, L.Catteron), all in is normal market for UMM PE, hours are probably sweaty with average of 70-75 and during deal sprints 85-95 (From my due diligence and networking)
However, I interviewed and received a really random corporate offer that seems amazing. It is at a PE-backed company by a top sponsor in the space, and the role is a blend of "Corporate development, FP&A, and strategic finance" with probably most of my time doing FP&A related functions my recruiter / interviewers mentioned.
Obviously, at first glance, easy decision is to go with the PE offer as you guys would probably agree these are very strong shops, very well known, and would be great for the resume, and a predominately FP&A role isn't too sexy.
However - the corporate offer I have is $330k all in! (all cash). Everyone I have spoken to has mentioned for similar roles and my experience I should be expecting an all in for corporate roles of like $180k-$250k.
Long-term I definitely will hop off this rat race and will want to do something on my own, or way easier. Do not want to do PE or investing long term at all. Is the obvious answer the corporate role? Seems like what this scenario is is a decision based solely on prestige. What would you guys do?
First of all, congrats on two strong offers. Based on the your comment below (I cant quote it for whatever reason), it sounds like you are leaning toward the Corporate role.
"Long-term I definitely will hop off this rat race and will want to do something on my own, or way easier. Do not want to do PE or investing long term at all. Is the obvious answer the corporate role? Seems like what this scenario is is a decision based solely on prestige. What would you guys do?"
My thoughts are on the Corporate role are as follows:
Look OP, I could be completely wrong about this opportunity, maybe you truly found a diamond in the rough, but my initial reaction is that it is too good to be true. The market always prices roles appropriately, so if you are way overpaid I think you should expect to be way overworked. Having worked for a big sponsor even in a purely M&A focused role, I would never do it again unless I had a meaningful equity component, autonomy over my day to day (I was the group head or senior enough to be running the M&A processes), and I had diligenced the hell out of the sponsor so I knew they understood the market.
Deal Team Six commented on my post!! Haha I see your name around here always giving great advice, appreciate you looking at my post! Thanks so much man!
The recruiter mentioned that the comp is split between $175k base and $155k expected bonus for my first year, if that provides a bit more exta color. I do agree with you 100%, this seemed very suspicious and I outright thought it was not true. I understand this is outright too good to be true, but their finance team is comprised of pretty heavy hitters ( Literally all H/Y/Penn/Princeton + literally only Mckinsey / GS/ EVR / Ciew), I only mention this because maybe they are just paying top dollar for top talent? But is weird that usually that doesn't matter with corporate and especially FP&A. Trust me I did a lot of DD and spoke to 5+ people in finance, and nothing jumped out as "fake" from our conversations. I do hear you 1,000% this is a crazy offer.
Regarding hours, I completely do agree it sounds like I would be working non-stop and even more than I did in IB or PE. However, when I networked to try to gauge it and do my DD, folks said average is 50-65 with occasional 70+ but not often. This seems more than fine to me.
I am leaning towards the corp dev offer with insane pay, but hurts leaving up a great great PE shop brand name on the resume. If you were me, would you just collect these fat checks and just say "fuck prestige"? I am thinking I would probably get shoved out / burnt out from the PE shop in 1.5-2 years anyway, so my all in earnings in corporate considering the longevity would be higher? Also, if I am in PE for 2 years and plan to exit to corporate anyway, what would be the advantage of even doing PE? Better access to better corporate roles with PE in my belt, but what is getting better than this $330k? Right?
Thanks so much again for the detailed writeup and taking the time. Cheers.
Hey man, I appreciate the kind words. Happy to help (hopefully this is helpful).
Apologies, I read the 330k all in (cash) piece as base only, that is my mistake. The clarity you provided changes my perspective a lot. The comp package details + the background of the team make me think you're spot on, they want top talent and they understand it comes at a cost as they are essentially pulling you away from PE. I think this offer is much more legitimate and attractive now. For context when I worked for a MF sponsor the Corp Dev team was full of all the wrong folks, people who had no business or pedigree to be getting deals done (I didnt realize the severity of this until after I accepted).
It also sounds like you diligenced the shit out of this (you did a much better job than I did at your age), so nice work again, and that does make me think you will legitimately be splitting your time between M&A and strat finance, with some FP&A sprinkled in.
Just to summarize, my skepticism dropped to near zero now that I understand the comp and the backgrounds of the team. I think this is a really strong offer.
Now on to the more difficult part, which is which offer to take? If I were in your shoes, I would take the Corporate role for a few reasons:
Thanks ChatGPT
I've been on WSO for almost 9 years, before ChatGPT was mainstream. This type of response is consistent with all of my old posts.
I’m on the other side of the corporate move and it’s not all I was sold. I’m paid less than when I was in PE and still working 60-70 hours a week working through weekends and holidays. Everyone is depressed and the job is pretty tedious.
Do a thorough vetting of all the pros and cons. They need to tell you their expectations for you and you won’t get a straight answer from a recruiter.
Corp dev or some other function? Any insight on comp & years of experience?
Associate in Corp Fin, doing whatever they need in cap markets, forecasting, reporting. Similar pay to other Corp dev roles I saw but I wanted to work in corp finance instead and avoid deals.
One nice thing about banking / PE, even if it’s not long term, they pay keeps going up 25%+ each year. 330K sounds like a lot but with low CAGR or potentially getting synergized when PortCo sells - you can’t afford a 2/2 + nanny + kid activities in Manhattan if you are the main earner. With a stacked team, not like you can make CFO in 5 years.
I wouldn’t do it for short term “equal pay” or lifestyle (unless you are just not good at working long hours) - but think of how to maximize everything over 30-40 years.
One nice thing about banking / PE, even if it’s not long term, they pay keeps going up 25%+ each year. 330K sounds like a lot but with low CAGR or potentially getting synergized when PortCo sells - you can’t afford a 2/2 + nanny + kid activities in Manhattan if you are the main earner. With a stacked team, not like you can make CFO in 5 years.
I wouldn’t do it for short term “equal pay” or lifestyle (unless you are just not good at working long hours) - but think of how to maximize everything over 30-40 years.
People I’ve seen do extremely well in corporate typically went to some sleepy company with less traffic ahead of them and then rocket shipped (along with some macro tailwind - sector got hot)
I’m starting to see more and more with PE backgrounds go into Corp Dev/Corp Fin/Strat roles. I could totally see why and it’s so weird how LLM all the way through MF PE are not really concerned with talent retention but then again I bet they want to keep the pie smaller (ex. carried interest). I only worked for a LMM PE shop/Family Office before I ultimately left but the deal bug left when I realized how much more broader my exposure was day to day so by getting that helps commercialize my profile and open up more opps. I dont have a super strong pedigree but in the long run helps me have a broad set of skills that are not just finance.
Can you provide more info on how you found the corporate job? I'm in PE but looking to make a move to corporate
linkedin easy apply, got lucky
I did this. Turns out the reason for the high pay was expectation of banking like hours….
careful w the longevity of the fpna and be cautious if its within tech as layoffs are rampant, as u mentioned its PE backed if its a startup you may want to be careful
I’m probably too late for OP but I’ve done a similar move and went with the Corporate job. It was fine and the compensation piece worked out well but the stress and hours were similar to PE and the overall career progression is not as great. Realized I wanted to give PE a try after all and it’s been pretty hard to recruit and get looks even coming from an M&A heavy role with lots of deal execution.
Anyone doing these moves need to understand that the PE door will probably close forever, especially if you do more FP&A vs. M&A. I’d recommend doing 1-2 years of PE and then make the move, that will give you a better shot at going back and corporate will always be there, but PE will not.
Last thing to add, be prepared that comp won’t always be this high in corporate roles. I’ve been looking to make a move and most lateral roles come with a comp decrease. So if you don’t like the current role it will be hard to find anything comparable, especially within FP&A.
Having seen the other side I would never work for a PE backed company. Also, something you need to keep in mind is they want to hire a kid with 2 years of experience at a top IB group and pay him a ton because they expect him to produce at that pace/intensity/quality. They’re not hiring someone with 2 YOE because they’re altruists, they know those groups you mentioned grind and they want a grinder that understands how to model
Ay congrats on L Catterton
Can I PM you?
Feel free to ask questions directly here and I will answer
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