Lateralling at VP level

Hi fellow Monkeys,

Before getting to the point, perhaps a bit of background about myself. I grew up in low/middle class family in a very small town far from any IB/PE or financial related considerations. I was raised by a single mom and surrounded by a couple of siblings. My youth was okay but never been an amazing student and high school was rough with teachers and classmates telling me I would never go very far. I still managed to go to university but not to any target ones, worked quite hard and managed to navigate my way through and ended up in a European IB team. I did my analyst and most of my associate years in banking. I am now a VP at a MM infra fund in a tier 1 city in Europe (I advised the same fund a couple of times in IB so had a bit of history with them) and in my opinion developed a fair amount of experience mostly in the telecom and transportation sectors.

Might be a bit bizarre but I kinda like the place where I am, nice working atmosphere, great exposure since associate (attending boards, been given a sector to cover or tasks that are usually above my paygrade etc.), decent hours if you are not executing, great colleagues, comps is slightly lower than market but got some carried interest quite early etc. but there is always this part of me willing to have the MF experience but perhaps for the wrong reasons. I have no issue admitting I have perhaps some form of inferiority complex due to my past and since then I have been trying to prove to myself (or others?) that I am capable to work for and in a demanding industry despite my background. I am fortunate enough to have my other half understanding since we met what it means working in this industry so I am far from being afraid of long hours and challenging environment. I tend to think I am quite resilient.

I have not been too close from the market since I became VP and for the past couple of months the idea of lateralling to MF has taken quite of lot of space in my head, again for the right or wrong reasons but putting this aside, is it feasible to lateral at a VP level to a MF and is it an issue to have a MM background (it seems that is the case to get headhunters’ attention)? Any suggestion to target funds like BX, KKR, Stonepeak, I Squared, Brookfield, EQT, GIP, MIRA (now MAM) in terms of approach or HH? Before anyone gets picky, not here to debate who is truly a MF or not.

Thanks a lot in advance.

 
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I made the jump from MM to one of the large cap funds you mentioned and while it is not impossible, it is an uphill battle and a very different role (I got extremely lucky / sort of fell ass backwards into an associate seat). It's even harder to make a lateral VP move as you're a much more expensive hire and I wouldn't be surprised if your MM years of experience are discounted. 

It sounds like your current role is great with upward mobility, lot's of autonomy, and you're happy - I would strongly advise against moving if that's the case. I cannot stress how rare it is to find a sustainable, partner-track role in PE. Most of the funds you mentioned are absolute sweatshops where even VPs are just cogs in the wheel and the role will definitely be narrower vs. yours today. 

 

Thanks a lot for your feedback, really appreciate you taking some time to respond.

That’s also my take with regards to the uphill battle. Anecdotally and before getting promoted, got approached by a BX/KKR/Stonepeak and despite having all the box ticked with great feedback during the process (HR took 30min to walk me through the feedback), they had to make a choice for the last round and the HR as well as the MD admitted that the only differentiator factor was the current role, I was coming from MM whilst the two others were already in MF. Frustrating to hear that.
 

Why do you think a MF discount MM experience? Is it just a market practice/culture because they are MF and can do whatever they want or is there something more fundamental? What you mentioned about a MF role being narrower is interesting. I met with a Senior Asso at a MF early this year and it’s definitely something that stood out, she had zero exposure to PortCo management, no exposure to CDD or any strategic (and interesting) meetings but was tasked to grind modelling and tax structuring. She never explicitly told me but you could read between the lines that she was a bit annoyed by the situation as well as well aware of the glass ceiling hitting very quickly. Flip side, comps was far above mine with very good carry allocation.

Current role is great with a good culture, although I generally think we are too soft and there are few dead-weights but that’s above my paygrade and probably another subject. Upward mobility will depend on raising a new fund in a year or two, right now there is zero room to move to Director and we all know that the fundraising market is not easy at the moment. I really don’t mind working for a sweatshop as long as (i) the package is attractive (comps + carry), (ii) transactions are commensurate with the reputation and size of the funds and (iii) I get exposure to the best team in the market. Again, might not be the most legit reasons but I feel like I need to address this part of me willing to give it a shot.

 

Discount partly comes from a culture/prestige aspect and partly due to different deal dynamics in large cap vs. MM. In large cap funds, you have armies of consultants, in-house lawyers/tax professionals, and portco management teams who are each focused on their slice of the pie. As you point out, deal team is almost 100% focused on modelling and memo drafting and there's very little exposure to management or actual strategy until you're in a partner seat. That being said the level of granularity and complexity in the modelling is significantly greater. At that end of the market, you have access to much better information (arguably more false precision though) and financing structures can get be more creative.

If comp, deal sizes, and team prestige are your top priorities, than the large cap space will definitely provide that. Personally don't think they are great places to build a career but I'm jaded by my own experience. 

 

The simple answer, is that there is an enormous difference in diligencing & executing a multi-billion dollar acquisition and a business with an EV in the $100-400mm range. Besides just some of the complexity, the investment thesis is night and day when it comes to scaling efforts, growth trajectory, value creation, hiring plans, C-suite needs, add-on strategy, etc. etc. 

I've been in LMM/MM for 8 years, and I wouldn't know the first thing about writing a $200mm equity check lol. Nor would I have the confidence to underwrite said deal. 

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