Putting to rest the question of exits from foundations

I'll be frank, it's tough for most people. The stereotype you have to escape is that you have limited or less than ideally relevant skills since you're an allocator, not a investor in a specific strategy yourself.

I've seen it done, but it was always a function of one of a few things:

• (a) the candidate being a tank who just crushed life in general and was obviously going to succeed in whatever role he got
• (b) someone who spent some significant portion of time on co-investment work and was able to highlight that as the requisite investing experience
• (c) someone who really built very strong relationships with some of the GPs he allocated to and initiated a lengthy, gentle conversation about moving over to their team.

For the first, think of the guy who had great grades, interviewed really well, just soaks up work and puts out consistently strong product, and happened to take a role out of undergrad at a big E&F name. I'm thinking of a particular friend of mine right now. That dude would have been a top-bucket banking analyst, a solid HF analyst, a great credit guy, you name it. He actually didn't have to put much into recruiting when he wanted to change seats, because everyone who met him was just like "Yep, you're a rare one, did you ever think about trying the direct side?"

For the second, it's people who identify that they have to compete with people coming out of the top banks or MBB for those associate roles. What do those analysts/associate consultants all have? Marketable skills from a proven training program at a known commodity of a firm. What's the best way the E&F guy can try to level up? By showing strong performance on work that's identical to what they'd do on the GP side.

That means they find a way to transfer internally to a co-investment or direct investment team. OTPP has built out a massive franchise in the past decade where they now deploy billions (with some fairly large bite sizes on the upper end of their range) alongside (i) the top-tier managers in their portfolio, (ii) some of the top-tier managers in the world who may not be in their portfolio, and (iii) direct deals they're sourcing themselves (thanks to teams they've hired away from the GP side, amusingly).

This bleeds over into the third bucket ... which is that if you're smart, you invest really heavily in getting to know both (a) the IRBD folks of the funds in your portfolio who you interact with regularly on information requests and oversight matters and (b) investment team members themselves.

Ideally you're doing this as someone who's evaluating co-investment opportunities alongside them. As a fallback, if your shop doesn't do directs or co-investments, you can still be a 'referrer' by sharing smart stuff you hear about in your own network. Former college roommate now at Leonard Green and talking about a deal they're getting ready to take to auction? Ask if he's okay if you give a heads-up to some of the guys in your portfolio. If he clears it with his seniors, you now get to look like a hero by telling Advent or Bain or whoever about the deal and introducing them in advance. Find some off-the-run direct deal that some fundless sponsor you met at a conference is trying to get done on his own? Plug him into all the special sits or opportunistic guys in your portfolio. Over time, you'll develop a pipeline of traffic that you are in control of. Do that long enough and well enough (don't peddle shit, don't be pushy, always make sure you know the deal details cold), and people at the funds in your portfolio will be receptive to you talking about 'exploring potential opportunities'.

Be aware that the major sensitivity on their side is going to be pissing off an LP who's in their fund. By that I mean they don't want to endanger the relationship with your shop by 'taking you away from' your current team. The explicitness of this may vary, but you'll inevitably get some kind of ask as to whether you've cleared it with your superior. That's up to you to decide how to handle. I recommend that you try to get far enough down the road with a fund to see if they'd take you seriously before going back to talk about career steps with a (supportive) direct manager.

I can't rank the five strategies you listed in terms of what's the most likely exit. The whole thing varies on whether you have a co-investment program, how big your asset base (and correspondingly, the portfolio) is, and how long you're willing to wait to develop a strong reputation and relationship set in the manner I described above.

I will say that traditional PE would probably be the easiest. I think long-short would be tough. An E&F role translates pretty poorly to stock-picking, unless you can have a really human moment and somehow convince a senior dude at a shop that your deep skills in self-directed research are analogous enough to the hole-digging and pole-sniffing you do as an analyst.

Business school won't be a cure-all for this. You'd drop $250k and forgo two years of income to find out exactly what I just wrote here; that someone will be apprehensive of your lack of directly relevant skills. You're way better off taking the direct approach and developing those relevant skills in whatever way you can, then pursuing the role you want, then evaluating whether b-school makes sense two or so years in as a way to progress vertically quicker once you've gotten into the asset class you like.

Of the five you listed, VC would be the easiest to get into if you did choose to enroll in b-school right away. Troll through my old posts to read what I've written about how to break in there.

Good luck.