Partners misalignmet common?
I recently joined a PE firm with ~$3B AUM and a small team. I’m trying to get a sense of whether what I’m seeing is normal for PE.
The partners don’t always seem aligned on ideas, materials, or execution. People, including senior employees, seem hesitant to speak up because there’s no real HR function and concerns about comp or career consequences. One partner has also yelled at an employee multiple times, both in person and on calls.
The culture is pretty top-down, with limited formal training and not much openness to new ideas or technology. The general message is that we’re here to make money for investors and everyone will benefit from it.
For those who’ve worked in PE, is this fairly common at smaller/partner-led firms, or are these meaningful red flags?
A lot of small PE firms are effectively the fiefdom of whoever founded it, and the smaller the fund the less professionally it tends to be run because it is not typically a focus to hire HR and other small back-office departments in small companies. Partners disagreeing is not a red flag, that's literally the point of having more than one person on IC. The top-down part is just the nature of the business, PE is fundamentally an apprenticeship model where you learn by watching how the people above you source, evaluate, and decide, and no fund exists where a junior's view carries as much weight as the partners'. The yelling is the one thing I'd separate out, that's a specific person problem not a structural one. Though even that is not common.
At the end of the day PE partners are in the business of pattern recognition and conviction, and the firms that do that well tend to be good places to work almost by default because everyone is making money and more likely to be happy. Most cultural dysfunction at PE shops traces back to funds that aren't performing, because when returns are bad everything else gets worse. This is why I have advised people to avoid all of the JAMMBO MM/UMM firms that haven't raised since 5+ years ago.
I would focus less on the culture stuff and more on getting a real sense of your firms partner's track record and connectivity. It's an apprenticeship business, you come in raw and moldable, and most of the learning isn't someone sitting you down to teach you. It's watching how they evaluate businesses, talk to management teams, build relationships with intermediaries, research industries, and play a M&A process. Whether those people are actually good at this compounds in both directions for your career.
Oh my gosh, they yelled at someone? In-person AND on calls?! Golly gee willakers that's not allowed!!!
This ain't a college campus (although I saw plenty of professors yell at students too so I'm not sure why this is shocking).
Yes, obviously. The industry is literally investors for hire who are paid carry fees based on how much money they make for their LPs. That's not a message, it's the job description. Is there supposed to be another message private equity pretends to embody?
This is all not just normal, it's more or less the baseline expectation for small PE teams.
Unfortunately, yes. It seems to be the same few people who get yelled at repeatedly. I assume there are longstanding relationships or dynamics behind it, but it definitely doesn’t make a good impression on newer employees or people early in their careers.
Do you think some leadership teams simply tolerate that kind of behavior as long as the business is performing and everyone is making money?
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