Median Career Outcome in PE - 15yrs post grad

I’m a senior at a semi-target who helps to lead one of our finance clubs, and I recently got access to one of our rosters from a little more than a decade ago. I got curious about some of the names and looked up ~20 of them. I was pretty surprised by the strength of outcomes - most of the people in club leadership are in spots now where they are making partner level/splintering off and raising their own funds.

I don’t want to beat a dead horse but it was pretty surprising to me how many people were in spots where they were on their way to significant ($30M+ NW) wealth by 45-50. Just wanted to ask about what median outcomes have looked like for people from your schools who’ve stuck around in PE, to try and index what I’m seeing.

 

I think you’re reading things incorrectly - I didn’t work backwards from a group of people who were already in PE. I took a group of names from an old IB club roster and did a LI search for the first 20 or so names, and then recognized that a lot of them stayed in PE after leaving IB. So, I think I’m avoiding the bias you’re talking about.

Just trying to see if others observe similar things when taking (somewhat of) a random sample.

 

I did a similar thing looking at all the Associates that came and went at my UMM PE fund over the last 15 years so, and the majority (about 2/3rd) stuck around somewhere in private markets and are at partner level and must be earning quite a decent wage. Doesn't surprise me a whole lot, this job isn't super risky (like public markets seats) just requires a ton of endurance.

 

Sure.. but remember the time period you are looking at was a “golden age” for private markets. Now PE firms are going public and hiring wealth management people to raise funds from individuals.

There are VERY real questions about what the next 10 years of PE looks like 

 

Sure.. but remember the time period you are looking at was a “golden age” for private markets. Now PE firms are going public and hiring wealth management people to raise funds from individuals.

There are VERY real questions about what the next 10 years of PE looks like 

Yep, this is the key question. Past performance is not an indication of future results. What PE professionals made 10 years ago has no relevance to what PE professionals will make in the next 10. People instead should be trying to figure out what's the next PE 

 

My fund is one of the old UMM (been around for more than 15 years), not crazy returning/scaling. It has done about as well as the market to be honest and judging by most publications (Bain, McKinsey) private markets investing is still experiencing secular tailwinds so I am not too overly worried. I probably won't stick around to partner because all these guys grinded for 12 years to get there and I just don't have the will for that, but genuinely doesn't look that hard if you have the grit (ofc a lot downsized funds, moved out of LBO investing, etc. but really nice outcomes nonetheless)

 

I would also think that the people who went the extra mile to get those leadership positions are the ones who cared more and really were interested in finance. Would be interesting to see the distribution of outcomes for the people who were members but nothing more. I bet that those people had good but not great outcomes (purely as defined by monetary career success). Maybe those are the ones more likely to exit to a chiller WLB corporate role? And the officers are the ones who kept grinding since that was more tilted towards their personality? 

 
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Never worked in PE, but why do all the bankers here always say partners at MF and UMM have 40-70MM in carry if, in reality, PE partner net worth only ends up being 20-30MM at age 50? Always read people (young inexperienced banking analysts) quoting “$10BN fund, 2X MOIC, 200-300bps = $40-60MM payout”. Then they’ll say “that’s just one fund, you have to layer on all the other funds XYZ firm will raise”.

Obviously this math is far from correct because the senior PE people I know aren’t even close to that net worth. Way lower. Where in the calc are the numbers off? And they started PE in 2006/2007 so I reckon #s must come down for those starting today.

What’s the actual career earnings of a partner at a mega fund or a UMM fund? Like 50-75MM (assuming you start today, NOT 2000)?

 

What you get paid and what your NW is are very different metrics.

Taxes and simply existing in NYC will burn through money. When you layer on a wife who may not make the most (but has a very expensive lifestyle), kids going to expensive boarding schools, annual vacations and simply having some nice things, you end up with a fraction of what you “made”. 

Payouts can be high while net worth remains stagnant basically.

 

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