Lateraling in PE - Evaluating Tradeoffs
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Am an ASO at a NYC MF PE shop with decent mobility upwards and received very strong / top bucket reviews in my latest cycle
Problem is I hate it here and so do a fair amount of my colleagues, most of which is because of a lack of meritocracy - associate attrition in my class and others has been above average. Unlike some of my colleagues who exit, I do like the investing role, just not sure how much longer I can take it here specifically.
Which begs the question - I’ve been approached with tons of great roles, but I’m never sure at which point is the right one to leave for (assuming I even get the job) and the level of “picky” I can be. It’s a constant battle between feeling like I’m “trading down” versus being happier elsewhere (I don’t mind the brutal hours, if it’s something I like doing at a place I want to be). After all, the longer I stay here, the more aggravated I get, and I’m not sure how many more management fee-paying paychecks will keep me here)
Open to any advice and thoughts from the forum
Based on the most helpful WSO content, here are some key considerations and advice for your situation:
Identify What You Want in Your Next Role:
Before making a move, take the time to reflect on what you truly value in a role and firm. Consider factors like:
As one WSO thread suggests, think about your ideal weekly schedule, hobbies, and what excites you about the job. This will help you move towards something you want, rather than just running away from a bad situation.
Timing Your Exit:
Evaluating Opportunities:
Networking and Due Diligence:
Mental Health and Burnout:
Exit Options:
Ultimately, the goal is to find a role that aligns with your values and career aspirations. Don’t let the prestige of your current firm or fear of “trading down” hold you back from pursuing a better opportunity. Life’s too short to stay in a place that makes you unhappy.
Sources: https://www.wallstreetoasis.com/forum/private-equity/leave-pe-early-or-stick-it-out-2-years?customgpt=1, Handling Stress / Burnout in Private Equity, Should I leave PE after a month and go back to my MBB?, Q&A: Private Equity Portfolio Company CFO
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Can you elaborate on your gripes with your current firm without revealing yourself? Just making sure the grass would be greener if you left.
Also, are you an A1 or A2?
I’ll do my best.
A2 now - gripes are likely similar across many PE shops, so will do my best to list them out.
Fully aware that the grass isn’t purely greener anywhere, each firm has its own problems, so open to hearing any thoughts
Where are the exodus of people leaving your firm going to?
OK, helpful color above, sounds like a change is warranted. The debate is really timing — if you switch now, you’ll probably have to repeat A2; if you can grind it out until the promotion (assume summer) to senior associate or whatever is next, then you can probably take that title with you.
I’d say comes down to what you can handle, but I’d suggest bearing the next 6 months to snag the promo. SA jobs also aren’t easy to come by (for lateral), so you’ll need to start recruiting ahead of time (like Spring), ideally with a nod that the promo is a lock.
When do you think you’ll know / can you push your firm for an answer? It sounds like you have leverage as a high performer.
Thanks - I’m definitely getting a title bump in 6 months for sure, so not exactly worried about that.
The part where I may be overthinking and wanting to leave sooner rather than later (even with a “re-do year” for the right role) is getting “pigeon holed” by a degree of specialization.
Not necessarily me, but for example - if I’m promoted and have achieved the mid-level (SA, VP, Principal - depends on firm) - let’s say SA at Hg Genesis (midmarket / smaller fund) - are my chances at a FP/Thoma/Vista or Tech HF role over? Or would an Hg overall brand / investing acumen still be a good enough stamp? Another anecdotal example, A2 buddy at Advent is ripping deals left and right, but not so much in his sector of choice where he’d eventually like to be … does he accept a title / size downgrade before he’s “too deep” into it?
Am I overthinking on that when it comes to leaving sooner vs later? Or am I unfairly penalizing myself?
Important Q for me timing-wise - I’d be less inclined to work any longer here if every day, review, bonus, promotion means I’m more “entrenched” in this role, and may be eventually willing to “trade down” role just to gtfo. Or if I am overthinking and it’s better to just keep my head down for SASO, and still be more picky with my opportunities.
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Just went through this and lateraled to a SA spot after a 2 year program. I think if you know you want to leave it really can't hurt to start looking early on a) to get into the groove of interviewing and b) gives you time to fully explore your options.
I think when you're recruiting post a 2 year program the calculus really changes as you're trying to optimize for upward mobility and that's probably going to be some combination of industry interest, geographic location, fund returns/fundraising momentum, and (I can't emphasize this enough) culture fit. Once you hone in on those factors I think you'll realize your universe of opportunities that you'd realistically be interested is much more narrow and what you really don't want to be caught up in is a scenario where you get fucked out of the SA promotion (to your point it's a lot of politics) and now have a lot of timing pressure to take the first half decent role you find.
This is a tough one - I don’t have a crystal ball, and there’s just so many variables. I wrote a full post then erased it because I just can’t decide what to advise ha. Here’s take two.
Overall the more junior you are, the lower odds of being pigeonholed (by size or sector). By that logic, moving as an associate gives you the most flexibility, and perhaps ability to trade up or parity, but it carries highest risk (as I’ve mentioned in other posts, you’ll probably have to redo this year and it puts your in a precarious promotion position for SA since you’ll be up against other A2s who have more champions by working there longer before the promo window). This route is probably only advised if you’re heavily focused on brand/size and willing to roll the dice on your ability to crush the move and secure the promo at firm #2.
If you wait for SA, you get a stamp of approval that carries significant weight, plus you buy yourself 2-3 years of runway at a new shop to prove yourself for the next promo. The knock is that seats are more limited for SA laterals, so you can’t be nearly as picky.
I can’t tell you which is the right answer but at least tried to lay out the paths and trade-offs. Obviously no matter what, don’t quit your job before securing the next role. That would change a lot of the calculus here (negatively).
Also DM me if open to it. Might have some opportunity ideas.
Analyst 2 here in a similar position as OP - good to hear we’re not “pigeon holed” (great term btw lol), as I’m also looking to leave my firm ASAP for many of the same reasons as above - can’t hurt to get some interviews and headhunter calls out there and my breadth of opportunities should still be quite wide?
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