Is it worth doing associate stint in PE even if staying isn't the long term goal?
Is the training / business acumen gained far better than say an IB associate stint? Should 2 years in PE be viewed similarly to a 2 year analyst program in banking?
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Take it for a grain of salt as I am only 1 year into my Associate years, but I feel like I have learned more in the first 6 months in PE than I have learned in all of my time in banking. In terms of building models and seeing different business, I have seen probably 50-100x more reps than I did in banking, and I worked at a Mid level BB.
Thanks for the perspective! Approx. what size fund are you at?
Family office that exclusively does LMM buyouts ~$100-$200mm of committed capital
Lol
Smartest college sophomore absolutely wasted on the MF kool-aid
100% agree. Looking back, my knowledge base was completely capped. You never learn anything outside of running transactions. Obviously, there are nuances you learn about operations, corporate strategy, etc. but how often do you apply that knowledge? Rarely from what I saw.
Is it worth it for 2 years learning? Probably
is it still worth it as a long term career? Highly debatable - it’s a mature industry now where returns are coming down (significantly), competition for any asset (never mind the best) is fierce, multiple expansion gravy train is all but dead, regulatory scrutiny is increasing substantially ( see UK labour party’s carried interest tax reforms and FTC focus on PE roll ups), exit liquidity (and hence carry) is becoming rarer
your expected wealth creation from PE is 20-30% of what it was even 10 years ago
Fair and agreed on the long term prospects. What type of roles do you typically see your associates leave to?
So WSO leads me to believe that IB doesn’t pay the way it used to (agreed), now PE isn’t expected to pay the way it has been. What am I supposed to do to make money?? Is search fund really the only opp blessed by WSO? Guess I should just pivot to tech and bask is the excellent WLB or create my own startup
All roads eventually lead back to starting your own business- really the only time-tested way to create true generational wealth
20-30%? Come on, that’s dramatic. Yeah, if we’re talking about founding partners ten years ago vs your run-of-the-mill partner today, but from what I know of older friends’/alumni’s PE careers so far, the average outcome in PE is much higher than 1/5 of what it was a decade ago
If you were going to revise your 20-30% what would it be? Don’t see how it can be less than 50%.
Returns dwindling for UMM and MF sure, but aren't true MM and LMM focused firms doing better than ever?
Easier to transform a business with a long-runway vs a mature company just looking for some extra capital.
No the competition for those assets are insane
Any lmm or whatever firm that does well gets stuffed with capital by idiot LPs like myself who are chasing returns. Then they become mm… more aum more management fees/revenue. This is a business after all…
I learned 1000x more in PE than in IB and it was truly the business model and professional education I thought banking was supposed to be. That said, it was far more stressful, intellectually way harder, and the standards were extremely high. The damage to my relationships, physical health and mental health were far more significant. Whether that trade off is worth it to you is your choice.
Have you left PE? If so, to what kind of role? Also, mind sharing fund size for perspective?
Did you feel it was worth it?
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