PE (investments) vs. FP&A
Hi all,
I've been an occasional lurker in these forums, and have reached a point where I'd value some advice. I'm faced with a choice of PE versus FP&A, and I am not sure which one to pick. For those of you who value PE above all else, spare a moment to consider my situation.
I work in corp dev at a mid sized and fast growing TMT company (we're backed by a very well recognised sponsor). I joined c.4 years ago, and have quickly risen through the ranks - more by accident than by design I ended up leading a major acquisition for the company, and in the process have built strong relationships with management (CEO, CFO etc.) and the PE. I still report to the head of M&A, and once the big deal was done, I reverted back to being "lower down the food chain", which was a little anti climatic. Now I have recently been offered to become the head of group FP&A, where I'd report directly to the CFO and potentially succeed her in a few years (her own words). At the same time, I've secured an offer for a mid-level investment role at a well regarded lower MM shop which operates in the sector I know well. I'm genuinely at loss as to what to do next. On one hand, I enjoy being on the "buyside" and I feel like PE offers broader opportunities, even if progression to a role equivalent to the CFO at my current place might be much slower. On the other, the prospect of getting a fast track to the CFO position feels quite unique and pretty appealing (if somewhat risky - I fear going down the FP&A route will close the doors to M&A forever). Anyone ever faced a similar dilemma?
In case useful for context, before going into corp dev I spent a few years in IBD at solid MM bank in London, and graduated from a "redbrick" university in the UK.
Any thoughts will be appreciated.
I should probably add that I have a decent chunk of equity in the company (for my level, worth mid six figures post tax if all goes well), and can expect more with the promotion.
I’d go for the PE role if in your shoes mate - rapid progression will lose its novelty very soon (when peers catch up) but it is very hard to transition into an investment role later and it sounds like there’s where your interest lies.
Separately, mid 6 figures!? How long have you been working mate - is this common in your region? Sounds like a lot of comp
It's a tough call, both sound pretty great. But where I'd break the tie is that I would discount the value of the potential future CFO role, relative to where other folks might value that piece. There are way too many factors beyond your control there. You don't know when current CFO will retire, whether company will even remain an independent company, whether other internal and external candidates may be deemed a better fit for CFO. And once someone becomes CFO, they're there for a very long time so as an opportunity it's kind of a one-shot deal. Not quite a lottery ticket, but not a path either. Somewhere between the two.
Said differently: if you want to be a CFO one day, your best best is to continue to build skills that will make you a competitive CFO candidate at many companies including your own. The track to one day become a CFO somewhere is a real thing, but the track to being a CFO at a specific company is less of a tangible thing and something I wouldn't value very highly, unless some more specific assurances are being made that will give you a clear leg up very soon.
Again, still great options and wouldn't blame you one bit if it all adds up to favor the FP&A role. Just commenting on that one piece, in case its such a close call that it comes down to that.
I agree with the above comment. The fact that the CFO is saying you can be the next one has really a very limited value, especially as the CFO will probably be appointed by the sponsor, or the next sponsor. This can also dramatically change if the company gets bought out by a competitor or goes public as I would doubt that a sponsor accept you to be a CFO of a public company without previous experience in a public environment. That said, I think you really need to understand what career you want to have (I.e. corporate vs PE), also, it is important to understand what the PE is offering you. If you are getting in as a VP / principal, that’s something you may consider given the role has some leverage and you start dealing with the more interesting stuff, but I would find it extremely painful to start as an associate / senior associate.
For the previous post, on comps. 6 figures for a mid level executive in a company that delivers >2.5x is normal (management makes significantly higher MoM once 2x and then 2.5x are exceeded).
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