Long time lurker / occasional contributor here. I recently left private equity as a VP and wanted to give back to this community. A little bit about me:
I went to what WSO would consider a “semi-target” and stumbled across private equity randomly while searching for internships. Had a blast interning at a micro-PE shop (really just a few rich guys pooling together money and buying companies in a niche space) and set my goals to do PE since then.
Like everyone else (back in the day, there were only one or two PE seats for undergrads which isn’t the case these days), I first got a job in IB to then recruit for PE. Luckily I got an internship at a BB and went back to the BB (but in a different group) for full time and then recruited on-cycle to land a UMM PE job. The remaining 1.5 years of my IB analyst years were a mix of (i) fun with roommates/fellow analysts and (ii) dread for the work which I thought didn’t teach me anything after the first year (I will admit the first year was a steep ramp).
I spent 3 years at the UMM firm and worked on some exciting transactions (the shop was a mix of LBO/growth equity). Went through the typical life crisis of an associate, but decided to keep doing PE and skip the MBA. I lateraled to a LMM firm and went up the ranks as a VP. The first year or so was exciting—I had new colleagues, VP title, and achieved a financial goal I set out in my 20s. But I kept waking up thinking about other things I could be doing in life and continued to get more and more disillusioned about the job, especially as it became more and more political.
So I quiet quit (well, the PE version of it). As someone without wealthy parents, I couldn’t help but think it’d be a “reckless” thing to quit a high-paying role like PE, so I coasted as much as I can hoping to get fired in the next few years. And it finally happened earlier this year.
It feels like a crazy decision to leave PE and pursue something on my own. But I have savings and supportive wife / family / friends. Since leaving PE, I have told myself to do only the things that I genuinely enjoy. Two things that I know I do enjoy are writing and finance (not the politics but the strategy), so I’ve started a newsletter as one of the things to explore on my own (you can check out last week’s post and subscribe if interesting! https://perollup.beehiiv.com/p/bean-counters-more…)
Ok, enough about me. Ask away (I will reply in batches throughout the next few days).
What other paths did you consider? What was the trigger that made you realize PE isn't the path you want to be on
I’ve considered some of the paths that are discussed on this forum. During my associate stint I interviewed for (I) Corp dev role at a portco and (ii) a CFO role for a small e-commerce company, whose founder I met through connections. Ultimately decided against (I) because I didn’t want to report to my colleagues / type A PE folks who I know to be impatient with things that take time and against (ii) because of geography. I do wonder to this day if path (ii) would have been more interesting than staying in PE.
Your second question is a hard one. I think I’ve had an inkling since my associate years. But back then, work was still novel, I had a VP title to chase after, and I didn’t have the self-confidence to tell myself that I can do other things and be ok financially. I’d say the bigger catalysts were after I made VP. I realized that (I) VP title / money didn’t make me happier; (ii) I frankly disagreed a lot with my partners on investment / portco decisions, but often it was met with “thanks but I do what I want”. Yes it was validating to see things pan out like I’d say it would months later, but you don’t get credit for that (and if anything you are told you should speak up more. And I didn’t feel like it especially since speaking up to the point where decisions go my way involved a lot of political navigating / manipulation); and (iii) realizing how little differentiation there is among most PE firms. It’s a crazy market right now, where a lot of shitcos are getting sold for crazy multiples and if not, continuation funds buy at what I think is high valuation. These were the main reasons, and maybe (ii) and (iii) could change with firm/economic environment. But realization on (i) was a big one to stop the grinding required to stay in PE.
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How easy/difficult was it for you to lateral downmarket from UMM to LMM? What was the find size difference and did you have to move cities? What motivated you to make that lateral move?
How much promotion runway did you have at the UMM if you had stayed? Was it easy to stay / get promoted at the LMM if you didn’t decide to leave?
Have you considered other strategies (private credit, growth equity, secondaries) after your UMM PE job? What are your thoughts on these other strategies?
I went downmarket from ~$6B fund to a ~$1.5B fund in the same city. I’d say it was easier since I had a good reason (I happened to have worked across both really big companies with a large team and more middle market companies with a small team. I strongly preferred the latter) and I also wanted to skip MBA (most UMM/MF back then had a strong preference for MBA candidates. Not sure if still the case).
Promotional runway was another reason. At the UMM, it was an unspoken rule that you go to HBS and come back. Also at the UMM, the investment universe was pretty much set and it was rare for mid-levels/principals to start a new vertical. At the LMM I was at, it wasn’t necessarily “easy” to get promoted. You still had to grind, but to a lesser degree, and had more freedom to pursue different verticals for sourcing. I’d say at both UMM/LMM, promotion depended most heavily on luck/timing (directly tied to fundraising cycle/success). Most mid-levels are qualified for promotion (at that point it’s less about talent and more about willingness imo).
I did consider all those when I was an associate. In terms of attractiveness right now, I’d say secondaries > private credit > growth equity. I said in the earlier response but the valuations are inflated, and secondaries are playing a huge role providing liquidity for portcos that would have never transacted at the mark. In the long term, I think it’s crazy that LPs are paying double fees on continuation funds so I question its sustainability. Also look at how bad some of those continuation funds have performed (e.g. Clearlake).
If I had to do it again, I would probably explore private credit a lot more seriously. Many of my peers lament that we drank the M&A kool-aid, and frankly, handing out first-lien loans at high single digits interest and double digit returns with back-leverage is such an easier way to make decent money.
What were the hours like over the course of your time in PE? Would a better WLB have impacted your decision to leave?
I tend to have a rosier picture of my past but realistically (outside of major deal sprints, which meant drop everything else in life):
1st year = 80 hrs / week. Was pretty brutal ramp.
2nd year = 65-70 / week. Less weekend work because I was less paranoid.
3rd year/sr associate = 60-70 / week. Depended on whether or not I was staffed with a first year.
first year VP = 55-65 hrs. Much more control over my time. But every day was just filled with calls and work/life boundaries are much more blurred (associates pinging you late at night, partners calling you at 8am on a Saturday because he was at the playground with his kids and had a thought).
last year = 40-50 hours. Had to be very selective about things (for example, stopped doing proactive sourcing outside of existing relationship calls).
I think I had a pretty good WLB, relative to my peers (some of which I had to force very intentionally). More than WLB, I think it came to control over my portcos’ outcomes.
Last year's hours isn't a good gauge of WLB given it led to your firing. (Which is what you were going for)
I'm starting as an analyst straight from undergrad at a MF this July but having serious doubts about everything related to life.
I don't want to be a slave and have work be the majority of my life. However, I also realize that I'm in an awesome position that many people would die for.
How do I balance this?
Some thoughts in no particular order of importance:
1. Recognize you are in a great spot in life. Pat yourself on the back. Seriously, recognize some wins in life. But don’t be a prick about it to other people. No one really cares that you work in PE (besides to people who also have too much of their self worth tied to a job). If you like being that person though, PE is a great career for you and you can ignore #2 below.
2. Put your head down but don’t tie your self worth to the job. The job is going to be harder than anything you’ve ever done or imagined. Your self-worth is going to be impacted, and inevitably, a bigger portion of your self-worth is going to be tied to your job (just psychologically, unless you tell your mind you value your job, you can’t keep up with the grind). But keep an eye out as to how far that psychological trick goes—some people in the industry really “live for the game” and I wonder if they just lost themselves to the job along the way.
3. Always have a plan and re-evaluate. Don’t get “stuck” if you hate it. But also know that a few years in PE, you do learn a ton and save a lot. So if some level of safety is important to you, think of it as a sacrifice.
4. Have a hobby/life/partner/family. Don’t be a loser—funny thing is if the PE job is everything you have/care about, your partners won’t respect you and you won’t respect yourself in a few years.
5. There are some cool shit you can do with your life. Stay open minded. There are ways to make money outside of LBOs.
What exactly did you do / stop doing to "quiet quit"? Did you essentially burn the bridge with the PE firm? Looking back, would you have gone about it the same way or been more upfront?
Have had similar thoughts and been thinking through what is the best way to handle
I set a few hard boundaries. For example, workout in the morning before going in and leave to have dinner with wife everyday. Those were some of the concrete “must dos” I started. In terms of don’t dos, a few things on top of mind are I stopped additional sourcing calls, responding immediately to my partners, and doing associates’ work (but also making sure they don’t do extraneous stuff that I have to spend time checking).
I don’t think my colleagues/partners know that I’ve quite quitted and they are happy to give me a reference. What I found surprising is how much of the work had been to “show face” and once you care less about it and only do things that matter the most / won’t get you fired immediately, there is actually a lot of time saving. I did piss off a partner on a couple occasions during holidays and that combined with poor fundraising probably did it.
Looking back, I would have quit on my own after spending more time exploring side hustles. I was afraid of losing my carry/co-invest if I tried to do something outside of work and get caught. I think there are ways to start things anonymously (but if you can handle all the stress of doing another thing on top of PE). I would not be upfront—they will plan for your backfill as soon as they get a whiff you are no longer in it for the long game.
What reason did they give for firing? Abrupt or they gave you a chance to improve performance etc?
Thanks for doing this! Have a few questions:
1. I did not have to leave vested carry on the table (but bulk of my carry was unvested). Generally if you are being let go you count as a “good leaver”. More chance of getting screwed if you leave for competitor or if you get fired for cause. Carry docs are very bespoke, but generally favorable to the firm so you have to navigate carefully.
2. You really don’t get to save a lot during your IB analyst years, unless you work at a place like Centerview. My general rule of thumb was to max out 401k and save all bonus (which wasn’t too hard to do as long as you lived with roommates and didn’t buy tables going out / didn’t go on too many dates). So that probably equates to low 6 figures post-tax after your banking analyst stint.
3. This has been topical among my friends and peers, but if I had to give only one or two advice on this, I’d say (i) build a sphere of influence. What I mean by that is work with a lot of folks and leave good impressions on everyone. It gets more difficult for each individual to speak up and say bad things about you since that person risks getting disagreed by others. You can get away with a lot more and also get recognized for more. It’s a positive loop and (ii) if you want to get promoted, have a champion or two. Having been involved in annual reviews, it really just takes one or two people to “go bat for you” before everyone just nods and goes along. Ideally you want to have as many champions on your back, but I also realized it generally means more work. You can’t do A+ job if you have too much on your plate, so be careful not to go too eager.
4. Work-wise, I wish I had specialized even more. I used to say that I like PE because of the variety of companies, which is true. But the best way to become irreplaceable is to become better than everyone else in one thing. In retrospect, sector specialization wasn’t enough. I wish I had dug into one thing for multiple years vs. bouncing around different industries within my sectors. We are taught that pigeonholing is bad, but as I get older, the more I realize that pigeonholing in an area that is not interesting to you is bad, but the most successful friends/colleagues just absolutely crush it at one thing.
I think for 2, he meant total saved to date. Curious as well
put your newsletter back up!
Mods had to remove it :/ didn’t want to risk re-posting and mods potentially removing the whole thread.
Did you FatFIRE? Or are you looking to do something else instead, as a source of income
Never pursued FatFIRE. I have a lot of respect for people doing it, but I’ve always known that I’ll want to work on something / can’t sit around the beach year-round.
For now, I’m taking time to pursue some of the things I’ve thought would be interesting to do (like writing) without being too stressed about making PE-like income soon, but I know I’ll want to try a business on my own. Thankfully was dual income household with no kids so there’s some time to explore.
Newsletter looks great, I will be a regular on it. Thanks for making the post, very insightful. Question for you regarding my situation:
I am in PE right now after IB and absolutely dread it. The hours are bad but thats not even the worst part, the anxiety and uneasiness and stress are just horrible for me. I recruited and got a corp dev position. Really good offer, higher than market they are offering to pay $240k with hours 9-5pm 0 weekend work.
You think this is a dream offer I should accept right now? Only reason I am hesitant is because I know that PE can offer some really high long term earnings if I stay with it, and the scale at corp dev will be really slow I assume. Would love to hear your thoughts - I am 24
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