Private Equity in Canada - Updated
I'm looking to gain more insight into the private equity space in Canada, particularly for Toronto. I understand that there are historical posts addressing Canadian PE, but any updated information would be helpful. Please share any information you find relevant, such as best funds in the space, lifestyle, trends in recruiting or investments, etc.
Some major topics that still remain unclear even when factoring historical posts:
- What's the pay like for associates?
- Hours/lifestyle relative to banking?
- What's the most common path to breaking in?
Answers to your questions are highly dependent on the fund. Based on how you've phrased your post, I'll assume you're looking for more information on the independents that work at the LMM-MM space (Birch Hill, Northleaf, Clairvest, TorQuest, etc.), so I'll try my best to generalize my answers to these types of funds. There's lots of information readily available on this site on the pension funds and Onex-types, which would have more 'conventional' answers to your above points, so I won't touch on these.
Associate Comp: A 2nd/3rd year analyst will take a pay cut when moving to a PE role in Canada. This is second hand so someone feel free to correct me, but most of the funds will pay in and around 150-170K (some, slightly below this) all in for a first year associate role.
Hours: Generally a lot better than IB. If you're on something live you'll be busy, but I've heard 60-65 hours with minimal weekend work as being normal.
Path to entry: Generally most of the better independents hire bankers. You'll see a few people from Big 4 TAS and consulting break in, but generally associates comprise of bankers. I've also seen a few people from corp dev join industry specific funds, but this is less common.
Every fund is different, but promotions to senior associate / VP without a MBA are often possible, assuming performance is there and a seat opens up. Ultimately, you're dealing with a very small sample size of relatively small firms so it's hard to generalize.
I can also confirm that practically every Canadian funds apart from Onex pays their associate less than an equivalent banking position
I don't know to be honest, the opposite is much more common, typically people will start their career abroad and come back to Canada later on. Also, PE is an industry that's continues to increase its focus on specialization so it is not a industry where people tend to make huge changes (ie. moving to a new fund in a new geography) mid-career so I guess it would all depend on your profile, the quality of your experience, your network, etc.
There are many factors as you alluded to, but to your point on specialization and increased focus, I've seen people move outbound to both Europe and the U.S. to energy/NR focused funds as an example of this. So in short, while it is less common it's certainly doable depending on what you want.
Thank you to all who have shared their knowledge on this topic - this thread has been extremely helpful.
I have some questions: a. How does the pay scale beyond first year associate? I understand this is likely a difficult question to answer for the independents as they are all quite different, but perhaps the pensions can be generalized? b. I understand that the most common path to breaking in is by completing a banking stint, but what about the actual method of breaking in? Applying to job postings once they appear? Networking? Head hunters? I'm very interested in hearing what's most common.
Thanks again everyone.
losing interest mtnmmnn CorneliusLux
a. There's a ton of data out there about pension comp. To begin with, all of their senior officers have their detailed comp plans laid out in the annual reports (which are obviously public). Then Glassdoor have quite a bit of detailed info on other levels. One thing to keep in mind though with pension comp, is that bonuses are paid according to group and fund performance (usually a hard hurdle) so given the 10-year bull market, funds have tended to max out their bonus in the last couple years, but it's not a given. Around the last crisis, many funds didn't pay bonuses, some over multiple years.
b. networking (including with head hunters) is always your best bet. the earlier you start the better. Canadian funds don't really recruit on a schedule like US funds do and headhunters won't reach out to entire analysts classes so you have to do a bit more work on your own. Generally speaking, once you see a job posting appear on a Company's website, it usually means the job is already filled so I would not rely on that. PE jobs are rarely advertised (although Canadian headhunters will have a lot / most of their mandates on their website)
As it was mentioned, penson funds have data out there. Private funds will be quite difficult to look into. Generally speaking, though, private funds will likely be more aggressive than pension funds comps wise.
As for the path, I’d focus on headhunters. There are a few reputable headhunting firms around, so figuring those out and introducing yourself is likely a good first step. Keep in mind that you’ll need to stand out from the bunch, so do prepare before contacting them.
Not very familiar with Canadian HHs, but off the top of my head: VlaadCo is decent and works with both buyside and advisory shops, Gobuyside will run the Onex process, and SG Partners has recently been mandated by CPPIB (and potentially OMERS but cannot confirm). Generally speaking you can get into a pension fund process without engaging HHs.