Paycut to go to small buyside firm - advice needed
I am a third year analyst at a top MM IB. My goal has always been to pursue a career on a buyside.
I have interviewed at various buyside firms throughout my Analyst career. Made it through case studies and to final round interviews at a few places but have not been able to close an offer.
However, I was recently able to secure an offer at a small fund. It's the recently created small-cap mezzanine arm of a large financial institution with ~$350M in AUM. They look to invest ~$10-20M per position. I am fairly happy with the role and firm, but the pay is considerably lower than what I was expecting (40-50% paycut vs. third year analyst pay which I'm estimating to be ~$180-200k). It's definitely the type of role I would want to be in long term, but the pay is giving me second thoughts.
My thoughts:
Pros - Reputable buyside place. Potential to lateral into other buyside shops in the future. Get out of banking which I don't hate but don't see myself longer term. Also, I am not sure if I will make Associate promotion - have received good reviews during my time but headcount in our group may be an issue. Hours will be much better and more stable.
Cons - Pay is low. I like mezzanine debt but don't LOVE it. I have never actually worked in mezz debt. Have spent internships in the equity space and I think that's where I'd prefer to be. However, not sure if an suitable equity role will arise and the longer I spend in banking I feel like it will be harder to move. Also, say I don't make Associate promo - that would make it much harder for me to go and recruit because I will basically be labelled a failure.
Any advice would be greatly appreciated.
On the subject of comp - monkeys who have had friends go to non-PE / HF roles after PE - what kind of paycut did they take?
Thanks in advance.
How is the comp structured? i.e. how much base salary (roughly) vs. bonus, and what form is the bonus in? Also, what is the cost of living in your area?
My sense is you're going to be far happier in the mezz role, and it also tells a better story if you end up deciding to look for PE after that.
Also nice name btw. Haven't thought about that episode in years. It was one of my first email accounts.
Any idea how much of a decrease in hours it will be? If these guys work 40 hour weeks that could be why.
If its the only buyside role you get, take it. Better to start "thinking like an investor" now, vs the alternative, which is what, stay on for Associate role that you're not even sure you'll get?
While comp is important, experience is much more important your first years out of school, it sets the foundation for the rest of your career.
Completely agree here. Early in your career, experience trumps comp, unless you have a special situation (e.g. you need to take care of family, etc.).
What did you end up deciding?
I'd jump ship if this is your only buy side opportunity. One thing I will say though is that if you're working for a small fund, I'd rather work for an independent one than one owned by a huge corporation. This probably doesn't apply to all small funds, but the place I'm at feels more like a start-up than a finance place. Wearing jeans to work, happy hours in the office, and the ability to say really politically incorrect shit without HR freaking out are all big perks to me. I'm all for the start-up culture in a finance setting.
Bumping this thread as I am in an identical situation. Curious to people's thoughts
But not a Mezz fund and looking at a ~$1.0 billion MM PE fund
a $1B MM PE fund is giving you a 50% pay cut? I know it'd pay lower, but figured it'd just be similar to analyst pay
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