Hey all so saw another thread about becoming a C-Suite at a PE-backed portco. I'm curious about this job as well as any other jobs that a PE firm would have that isn't the investment team or IR.
C-Suite positions, are you appointed by the PE firm and work for the PE firm or do you work for the portco? Where would your paycheck come from? When the PE firm sells the portco what happens to your job?
What other jobs are there in PE besides investor relations and investment team and what are comp & hours like?
Ah, you're venturing into the jungle of PE roles beyond the deal-making spectacle! Let's swing through the canopy and explore:
C-Suite Positions at Portfolio Companies (Portcos): - Nature of the Job: Executives in C-suite positions at portcos are typically appointed to drive value creation for the PE firm's investment. They work closely with the PE firm but are employed by the portco. - Source of Paycheck: Your paycheck would come directly from the portco, not the PE firm. - Post-Exit Scenario: When a PE firm sells a portco, the C-suite's future can vary. Sometimes they stay with the company under new ownership, sometimes they move on to other opportunities, and occasionally, they may be retained by the PE firm for future portfolio work.
Other Roles in PE Firms: - Operations Team: These professionals focus on improving the performance of portfolio companies. They might have backgrounds in consulting or industry-specific expertise. - Fundraising/Investor Relations (IR): Although you mentioned outside of IR, it's worth noting that these teams work on communicating with current and potential investors, and raising capital for new funds. - Compliance and Legal: Ensuring that the firm adheres to regulations and legal standards is crucial. These roles involve a lot of due diligence and legal framework management. - Finance and Accounting: Managing the firm's finances, including fund accounting, audits, and financial reporting. - Human Resources (HR): Focused on talent acquisition, development, and retention within the PE firm and sometimes at the portco level. - Technology and Data Analysis: With the increasing importance of data, these roles focus on data management, IT infrastructure, and sometimes proprietary software development for deal analysis.
Compensation & Hours: - Compensation: Varies widely depending on the role, seniority, and the firm's size. Generally, investment team members have higher earning potential due to carried interest, but C-suite roles in portcos can also be quite lucrative, especially with performance bonuses. - Hours: C-suite executives at portcos often have demanding schedules, but they may have more predictable hours compared to the investment team at a PE firm. Other support roles within a PE firm can expect more regular hours compared to the investment team, but this can vary with the firm's culture and specific periods (e.g., during a fundraising cycle).
Remember, each PE firm is its own ecosystem, and roles can differ. The best way to understand the nuances is to network with those in the industry or to peek into some of the most helpful WSO content for real-life insights.
Sources: Q&A - Analyst at Top PE Fund (TPG, KKR, BX, OAK, Carlyle, APO), Private Funds Group (CS/UBS etc), What are the Roles within Real Estate Private Equity?, Q&A: Fundraising for Private Equity, Cap Intro & Investor Relations Career Paths, What’s the deal with Investor Relations?
Secondaries PE is a great field to be in
Tbf I think secondaries PE still counts as investment team work, just with a different class of assets. I think he’s more asking functions at a PE firm (I.e. portfolio management, financing/capital markets, value creation/in-house consulting, etc.) not other investment areas/niches
would these other jobs like capital markets within PE be eligible for carry?
As mentioned by someone else above, the two that come to mind right aways are capital markets (ie helping with arranging the financing for transactions) and operations (working with portfolio companies to create value). The latter seems to differ a lot firm to firm and outside in seems pretty vague. I've heard they're pretty well respected and value additive at some shops but at others they're treated as 2nd class citizens
Any firm names come to mind in your last point for respected or disrespected operating teams
Portco C-suite executives would be put in place by the PE firm, but their paycheck and official affiliation is with the portco rather than the PE firm. As such, they wouldn't be eligible for carry, but they'd still typically receive a good chunk of compensation via stock option in the Company they operate (which, if structured correctly, retain the LT capital gains treatment). Comp here can be highly competitive, but is somewhat more variable given it's a substantial stake in one outcome vs. a smaller stake in several.
Sometimes our execs will stay on with the company post-sale, but it's all situation dependent – a new sponsor could want to keep the same team on similar terms, or they could want their own team. Good C-suite execs tend to be used in a serial way by PE firms, so it's not uncommon for us to have a given exec operate multiple portcos for us over the life of a few funds
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