LT Career Path after MF PE Associate Program?
assuming target UG -> top IB program -> MF PE associate path, what’s the long term path for a consistently high-paying career in your 40s/50s? Seems that most MF associates nowadays, all of which are the sharpest candidates entering the PE industry, get kicked out after two years. Assuming they’d like to stay in finance for the long term and not exit to a lower paying cushy job, where do these candidates go? The path to a MF seat is more or less laid out and a solvable game, but what lies afterwards within the industry?
Pursue whatever you are interested in. MF PE is basically a training ground for other roles in PE, HF, corporates, etc. All 3 are super competitive, but so is most other well-trodden pathways. PE Senior Associate market is very dead; there are 10 MF Associates fighting for 1 LMM PE SA spot these days just given how large some MF PE assoicate classes have gotten (think CD&R is 20 people just alone for example). It's more of a stamp of approval that you can surrvivie three very hard to get into environemnts of a top school, top bank, and top investing firm. At some point you have to make a decision as to where you see your career longer-term rather than forever trying to keep options open. If you truly have no idea, MBA might be a good way to delay for 2 more years.
if this is all a scheme for endless optionally with no clear path, why does everyone try to leave banking? similar to ppl becoming a corporate lawyer to clear 7-8 figure pay days one day, why not just stay in banking? seems like PE is facing structural headwinds that make creating real personal wealth less likely with passing years. Also while successful hedge fund investors can rake in crazy pay days, nobody knows if they can be successful in public markets investing until they ultimately try it. furthermore, 99.9% of ppl who enter public’s, even from top schools/banking programs/MFPE firms, don’t make it in the industry. the more i think about career paths that allow you to amass real personal wealth, becoming a rainmaker banking MD seems like the play.
I guess the question is do you have the personality to be a rainmaker banking MD? It takes a certain type of person to become a rainmaker (and part of that ime is you need to enjoy the work).
Current PE VP and largely agree with your takeaway. The better risk/reward and more likelihood path is try to become an MD in IB. Compared to trying for MD in PE, it is (a) much tougher to make MD in PE vs. IB and (b) getting good returns and realizing carry is much more difficult nowadays.
I will say that in IB it's all execution and project management up through VP and even Director level. Question is will you make a good MD in IB? Will you be able to build relationships with clients and beat out other IB MDs to win mandates? Different skillset and job at that end-level as others noted.
Overall, I still think it's worth it to do 2 years of PE after IB and decide for yourself. You can always go back to IB after PE associate program.
Know a few folks at my level across firms who are considering going back to banking (entering third associate year) for the better risk adjusted earnings potential
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