Large FoF vs Investment Consulting?

Based on the most helpful WSO content, here are some key considerations to help you decide between a large FoF and investment consulting:

FoF (Fund of Funds)

1. Skillset and Career Path:

   • Working at a large FoF (like GCM, Hamilton Lane, or Pantheon) can provide exposure to private equity, secondaries, and co-investments. These roles often involve fund due diligence, portfolio construction, and potentially co-investment underwriting.
   • While FoF roles are less technical compared to direct PE or IB, they can still offer transferable skills, especially if co-investments are part of the role. This could be valuable if you decide to pivot to direct investing or other buy-side roles later.
   • However, some WSO threads highlight that pure FoF investing may not be as transferable to other finance roles, especially if the role is heavily qualitative.

2. Work-Life Balance (WLB):

   • FoF roles generally have better WLB compared to direct PE or IB, with hours often in the 50-60 range. This could allow you to explore other interests or prepare for B-School.

3. Location:

   • The tier 3 city might be a drawback if you don’t enjoy the environment. Networking opportunities and personal satisfaction could be limited compared to a tier 2 city.

4. Compensation:

   • The FoF offer comes with higher compensation (~20% more), which could be a factor if you want to save for future goals like B-School.

Investment Consulting

1. Skillset and Career Path:

   • Investment consulting (e.g., Mercer, Cambridge Associates) provides broad exposure to asset classes, portfolio management, and client advisory. This can be a great foundation if you’re unsure about your long-term career path.
   • It’s a strong platform for transitioning into institutional asset management, endowments, or even FoF roles later. However, moving into direct investing (e.g., PE or VC) might be more challenging from this path.

2. Work-Life Balance (WLB):

   • Investment consulting roles are also known for good WLB, often comparable to FoF roles.

3. Location and Networking:

   • Being in a tier 2 city you enjoy, with existing connections, could provide better networking opportunities and personal satisfaction. This could also help if you decide to pivot careers or apply to B-School.

4. Compensation:

   • While the comp is ~20% lower, you’ve mentioned that early-career earnings are not a major concern for you. The location and connections might outweigh the pay difference.

Optionality and Long-Term Considerations

• FoF Optionality:

  • If you’re open to staying in FoF investing or exploring co-investments, the FoF role might be better. It could also provide a smoother transition to B-School, as the brand names (GCM, Hamilton Lane, Pantheon) are well-regarded.
  • However, transitioning to other areas like direct PE or hedge funds might be more challenging unless you gain significant co-investment experience.

• Investment Consulting Optionality:

  • Investment consulting offers broader exposure to asset classes and client-facing skills, which could open doors to institutional asset management, endowments, or even FoF roles later.
  • The tier 2 city and networking opportunities could also be advantageous for career pivots or B-School applications.

Recommendation

If you value location, networking, and broader exposure to asset classes, investment consulting might be the better choice. However, if you’re leaning towards staying in FoF investing or want a stronger brand name for B-School, the FoF role could be more advantageous despite the less desirable location.

Sources: Q&A: 1st year FoF Infrastructure at Buyside, Direct Invest to FoF/Co-Invest?, https://www.wallstreetoasis.com/forum/asset-management/qa-current-analyst-at-20bn-hedge-fof?customgpt=1, 10 years in banking, tech, and consulting