Is buyside worth it if most associate programs are 2 and out?
Been thinking about recruiting for PE / private credit, but pretty much every fund I’ve spoken to has a 2 and out associate program. There’s just so little senior turnover at a lot of these funds.
Kind of struggling to see the value if I'm not obsessed with investing. Banking seems way more linear in comparison: analyst to associate to VP at the same place, no forced job search in the middle.
For people who made the move, what made it worth it? Exits after the program, pay, hours, something else? Anyone regret not staying in banking?
A lot more people regret leaving banking for PE than this forum likes to admit, especially those who get pushed out after two years and struggle to find another PE seat they'd be interested in (other MF, UMM, or growing MM PE). I'd say that applied to ~half if not more my MF associate class. MBA recruiting is also increasingly competitive, with plenty of desirable UMM/MM shops bringing people in as senior associates rather than VPs. The bigger issue is that there's a bottleneck at the VP level. Fund sizes haven't grown nearly as quickly since 2020–2021 given the rate environment, while senior turnover remains minimal. Partners and principals have little incentive to leave, and plenty of VPs have enough carry to stick around despite limited promotion prospects. That being said, I ended up at a UMM that's doing much better than my old MF in both performance and fundraising, so hard to complain personally.
Ultimately, you can do very well in either. The bigger question is what you actually want to do long-term. If neither appeals to you, I'd focus on figuring that out rather than blindly following the IB → PE path. PE buys you another two years to decide, but your options can actually narrow as your comp expectations rise. PE arguably offers better exits than IB, largely because you can always return to banking, but that doesn't mean those exits will be attractive relative to what you're already making. It's hard to justify the pay cut from PE to go into corproate roles, but might be easier to justify when you are a 2nd year analsyt looking into corporate roles.
Thanks, this is super helpful! If my main goal is just to make VP and stay somewhere long term, rather than chase carry / make partner, would you lean toward staying in banking through A2A, or going to a PE/credit fund with a promotion track?
I'd just do whichever you find more interesting. Both have their bottlenecks, with banking generally being VP to ED and PE being Associate to VP. Making VP in banking is relatively straightforward, but moving beyond that is a different story. PE does and probably always will have a higher top-quartile outcome, and you can generally move back to banking if things don't work out. VP in PE is still very much a career-track role. My quoted carry, for example, is in the seven figures, so there's an expectation that you eventually move up. You can't sit around as a VP forever, and if there's no path to Principal, you'll eventually get pushed out given the zero-sum nature of carry allocation. That being said, 4–5 years at VP is still very good money if the carry materializes.
If you make VP at a respectable PE shop, you also have plenty of opportunities to lateral to other funds as a Principal or move into attractive portco/corporate roles. Ultimately, both are great paths, and I'd focus more on what you actually want to do rather than optimizing for the easiest path to VP.
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