I'm currently interviewing with a well-known MF for a "middle office" finance position. Per the job spec, the position is within portfolio valuation and monitoring where I would be responsible for "tracking the performance of assets at the fund level and developing reporting" (which sounds really broad and generic).
My question is multifold: 1) Is middle office just a euphemism for back office? 2) What might having a portfolio valuation and monitoring skillset within the context of a PE fund lead to? Would this be a step up or down in career trajectory.
High-level background: Manager in restructuring and M&A advisory at Big4 transaction services. Ultimately would like to see myself in more of a front-office capacity.
Fire away!
To help try to answer your question about whether middle office is just another term for back office, I would think it is not. I think middle office is a term to try to describe the fact that the position does more interaction with the front office and may do some more front office-type work as compared to the typical back office role. I think middle office is a separate thing from back office. Just my opinion, the truth may be different but I thought this may help in answering your question. Wishing you all the best
Yeah no...
This is not a path to being "front office" (e.g., making investment decisions). Over the long term, this is the path to being in the finance function of a PE firm (your boss's boss's boss's... and so forth will almost certainly be the firm's CFO)
Thanks. I guess in your fund, what has your interaction / perspective been with the valuations team or similar function? Do you see it as value-add to the deal process or portfolio management?
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Similar to the other reply, we engage with valuation team on a quarterly basis for valuation for LP reporting. Investment team submit the valuations, not sure what the valuation team do after that, looks mostly like collation and reporting of valuation to relevant committee.
My guess is you’ll be doing the same. I can’t imagine a val team pushing the investment team on the valuation as they are so far removed from the detail and market they don’t have the knowledge to be interrogating the models.
Middle office performs a distinct function from back office (I.e. firms vary but, strictly speaking, compliance and risk is generally middle office, while fund accounting and administration is back office).
Valuation and monitoring is an essential function. Our guys are great and their proficiency minimises the time I have to spend doing reporting work I intensely dislike. However, 1) it’s exceptionally rare to see a direct transition to become an investment professional, 2) your comp will always reflect the fact that you’re not a revenue generator for the firm.
Very helpful, thanks. Would this type of role be any more meaningful at a PE fund than it would be at any other company? If its not a path to more challenging, meaningful work in the FO then would I be better served doing a similar type function at another firm in another industry.
People seem to really value the MF name but for this position, it doesn't seem to really make a difference in terms of long-term career progression.
It might be slightly more meaningful on a relative basis - the complexities of valuation and LP reporting in private markets is not insignificant and the scale of the company might position your comp on the higher end of the scale.
That being said - it isn't a decision making role: it's some data analysis and reporting. The skills aren’t particularly transferable to front office roles. Not sure how being at a MF would change that - beyond the scale and complexity of the portfolio and deal structures.
I've seen some people from Big 4 break into an investing role at a PE fund, but almost always at a LMM fund. You can't break in from a MO/BO position into a FO position, except maybe also at a LMM, certainly not at a MF though
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