Is jumping firm the best way to get promoted in this industry??
I personally know a couple people who were overlooked by their firm, jumped ship, and got an instant promotion. One person who's ranked as the bottom associate in their class, was told to find another job, stuck it out for 2 years, and then joined another equally good firm as a junior VP / senior associate. Another person who didn't get a VP offer, jumped ship, and got a VP offer. Basically, I know at least a handful of the same cases.
I'm not jealous or anything. Quite opposite, I'm super happy for them as I know they are great people outside of work. But I have to ask the question: is getting promoted in PE very much just a game of attrition, a.k.a, getting the right amount of time in the job, and then jump ship to another firm, without necessarily being the best person at it? Like if you can just take the workload and survive for a couple of years and have a normal personality, some firm will pick you up and give you a promotion?
I'm curious to hear thoughts from our members of the forum, as none of my family members work in finance / corporate America so this is a very new phenomenon to me that I'm just noticing.
My sense is that if someone doesn't get promoted, their political standing in the firm is poor. Might as well jump ship and start afresh. When people tell you to hang around, they only tell you that so that they can milk you for as much benefit as possible and are just thinking for themselves (eg. no need to commence hiring process, no need to train new team member).
It's a selfish world. Fuck loyalty.
Bump
The very nature of the PE business model is that it is hyper-scalable. You really don’t need that many partners. Adding in new partners without a material increase in size of fund is incredibly dilutive to existing partners. Hence why getting promoted organically in this industry above the VP level and to partner is very tough.
Funds that are growing on the other hand have a need for new partners because they don’t have a stable of individuals ready to be partner internally. So obviously best move is to hire the log-jammed person from another fund.
Also - at the senior levels, “merit” or being the “best” has little to nothing to do with it. Political standing with key decision makers is key.
Do you think the same way would apply for junior people? I’ve seen a fair amount of associates / VPs getting promoted after jumping ship after being told to leave by their old firm
Market cycles and timing also come into play. I've seen it both ways - 10 years from associate to partner at shops that encourage that; but the same guy may stagnate elsewhere. So many variables - how is the book doing, how many people above you, when is the next fundraise etc. Jumping around can help if you are in a stagnant shop.
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