PE teams in Sovereign Wealth Funds

Hi all, 

Curious about the differences between:

  • working in the PE team of an SWF (e.g. GIC, ADIA, QIA), and

  • working in a traditional PE shop

I'm guessing that private PE shops have a bit more flexibility in the types of deals/structures they can pursue and bonuses they can offer, but with more demanding hours. Would that be accurate? Any other differences between such organisations e.g. different exit opportunities, cultural nuances, hiring/training practices, etc? 

 

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Fundraising is a clear difference. Unless you work at a MF or otherwise well established firm, fundraising is constant, uncertain grind.  As you noted, work life is typically better at SWFs. This is partially due to culture, but also because SWFs typically aren't leading deals. It's much more common that they sync up with a GP during a syndication process. This has it's benefits and drawbacks (ie less likely to lose a deal, but less engaged in the process)... Essentially working at a SWF usually means lower risk (in closing a deal or raising a new fund), less engagement (in certain deal processes and in post-close value add), but with better work life balance. This can also help justify why pay is lower vs general PE across the board.

 

Interesting. How does that translate to exit opportunities in your opinion? Do other potential PE employers apply a small discount to SWF PE experience, given the differences you've mentioned? Or are they indifferent?

 

Thanks! Think we're in different time zones, so just seeing this. What differences did you see in base pay, bonus, hours, exit opportunities, deal exposure/involvement, and culture? Would also be great if you're willing to share which SWF you worked for

 

One thing I would say about SWFs is that often unless you a citizen of the SWFs country, you will struggle to rise above middle management. E.g. QIA makes efforts towards Qatarisation, where citizens are given preference over foreigners even if the foreigner is more qualified. It means a lot of upper management is less competent/qualified than you are and are only in that position because the are from the SWFs country.

 
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Well, I had not checked this website for a while but better late than never I guess? Comparing SWF to the MF:

Base pay and bonus: slightly lower 

Carry: materially lower

Exit opportunities: more limited now that I am industry-focused but I do receive inbounds from HHs every other month for lateraling opportunities in GPs with the same industry focus. No reason to lateral to other SWFs/pension funds since I don't think any would offer better comp/career than my current position.

Deal exposure/involvement: depends a bit on direct vs. co-investment type of deals. On direct deals (i.e. where we lead the process), I believe I have the same experience as I had in the MF, although now I am at a much more senior position leading the investment process. Co-investments are lighter touch and less exciting but are preferred by the organization since they are less resource intensive.

Culture: group dependent, but culture in my group is great. I was the second hire (7-person team now) and helped build the culture that we have today so would be biased to say so. Culture at the MF was extremely toxic and made me hate getting out of bed every day.

SWF I work for: unfortunately that is too much to disclose, but it is arguably one of the largests in the world (if not the largest).

 

Not really experienced with FoF so I would be afraid of making too many comparisons. An important point to highlight is that SWFs are government-owned entities while FoFs are owned by private individuals, which tends to imply in differences in how the organizations are run, compensation structures, internal bureacracy, fund raising process (none at SWFs), etc.

In my current role, I am involved and lead all the steps of the direct investments, from screening/sourcing with corporates to execution of legal documents pretty much like in a traditional GP. When you do co-invests, your job is pretty much packaging what others have done to the committee, ask a few questions and run some sensitivities. Your sourcing is limited to developing relationships with the GPs and most of the time the thesis is highly reliant on how strong the GP is in that space (and less on your investment judgement). You tend to learn a lot less and develop less marketable/transferrable skills. On the other hand, your life tends to be easier and you will likely work less hours and under less pressure.

 

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