Saw a posting for a role as a PE Co-Investment Analyst-Associate. The role is described as "Sourcing, screening, and analyzing private equity co-investment opportunities, Providing thorough qualitative research and financial statement analysis, Liaising with primary fund research team to assist with the evaluation of lead equity sponsors and Managing and maintaining internal database, including tracking investments and recording performance."
Unsure what the role entails exactly and just hoping for more insight. Is this a back-office role where you essentially assist with the main, front-office PE team or is it something different? Thanks in advance for the help!
Bump
I highly doubt a co-investment role is back office. You're part of the investment team assisting with making investment decisions
Why does it matter as long as the pay is good and there is a path upwards.
This BO/FO obsession is so stupid, but I’ll lay it out for the interns that think it matters.
BO is any typical corporate function that you would find at a large company. Compliance, accounting, tech (at companies where tech is a supporting function), IT, HR, FP&A, etc.
MO is a corporate function that does not necessarily generate revenue directly, but that directly supports revenue and is tied to growing and directing the company. Think strategy, risk, marketing, portfolio management, corpdev. The C-suite of a company sits here because the MO is what actually runs the company and ties together the support functions and the revenue functions.
FO is just divisions that directly create revenue for the firm. So deal teams and IR at a fund, basically anyone that either brings in management fees or creates performance fees. At a bank that would be the CB/IB/S&T/etc guys that make money. At a tech company that could be the PM’s and sales guys. You get the picture.
FO vs MO vs BO only matters if you want to leave that function/firm later on and are looking to do something that requires a specific background. A consultant at Bain is FO but when they move to strategy at GM that’s MO. Doesn’t matter because they got a fat pay raise and have a better path to the top than the guy leading dealership sales.
The FO vs BO snobbery is just something insecure IB guys use to make themselves feel better. I have been at 3 firms now, and outside of when I was in banking, I have never seen someone care about being FO. If anything, the MO roles are the ones that are actually seen as having the most influence within the firm, since FO at most places boils down to sales, with the exception of traders or deal teams at funds/etc.
Even at my current firm, where those of us on deals teams are the ones bringing in fees, we still have to answer to the IC guys and portfolio management people, who have final say on everything because they can see the bigger picture and make sure we don’t blow ourselves up on a bad deal. Those guys don’t do any deals of their own and are firmly “MO” by the definition above, but they have all the real power and respect.
If the role pays well and has a path upwards to more responsibility and even more pay, then that is what matters.
I am actually in complete agreement with you. However, knowing WSO and what gets them to click in to threads I thought it would be helpful to put in the title. I was hoping to get a better understanding of the role, as stated in the body, and was looking to see if the role was back-office not to put down the position but to have a better idea of what the responsibilities would include. I went from IB to Corp Dev/Strat for a better WLB, so trust me when I say I am not prioritizing prestige or anything here.
Also depends on what your company's core revenue generating function is. A tech M&A banker at GS = FO but when he moves to corp dev at Meta the role becomes BO. A finance guy at Bain Cap is BO but if he moves to Deloitte doing the exact same thing for Bain Cap as a consultant he's FO.
This is the definition of a front-office, investment team role. It's just doing co-investing instead of direct investing. This means that PE firms are coming to your firm and offering you the opportunity to deploy equity into the deal alongside them. You'll do DD, build LBO models, and write investment memos just like an associate at a PE firm does. However, you'll end up doing the DD at a somewhat higher level because the deal will happen faster. You won't source deals from banks or companies looking to sell themselves but you will work with PE firms to get them to show you deals that they're investing in. You won't negotiate the valuation, financing, structure, or anything about the deal because the PE firm is going to do all of that with lenders and then just tell co-investors like yourself what the structure and valuation is. You won't do any value creation yourself because that's what the PE firm does. All you do is DD, DD, and more DD, plus some relationship building with PE firms.
Thank you! That was very helpful and makes a lot of sense. Appreciate the insight! It sounds like there is no operational experience with the role. What would the exit ops for this be if you wanted to leave PE down the line? I would assume they would be more limited in terms of exiting to corporate operational roles.
Yes, its generally a bit more limited because think about the skillset you are building as a co-investment associate and think of how that could translate into other jobs when you're going for the Associate -> VP promote (or VP -> director, etc).
Usually you see people at the VP level going from traditional buyout -> co-investment but rarely the other way around
Co-investing IS the exit opp. It's a 9-5 investing gig that pays well. A lot of people who don't want to deal with the minutiae and long hours at a direct PE firm exit to co-investing and similar roles.
Co-invest at a sovereign fund seems like a dream. Have GPs treat you like an A list celebrity all day.
Definitely FO - still doing investing job, and tend to focus more on “go / no go” vs deal executions (legal, tax, etc etc) or sourcing.
However, I do feel that at associate level, you tend to learn more at direct investing shops vs co-investment shop, and it may be easier to move once you are a VP (vs trying to get promoted internal at a co-investment shop.)
The other thing to consider about a role like this is the type of organization you'll be joining (i.e. SWF, FoF, endowment etc). For example carry is unusual out side of a FoF, but a SWF and FoF will likely have a different set of GP relationships and will therefore be looking at very different types of co-investments.
Would you mind elaborating on why they’d have different types of GP relationships?
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