Reputable LMM PE shop in T2 City or Secondaries in NYC?
Had the fortune of getting two buyside offers straight out of undergrad, one at a reputable local GE shop in a T2 city near NYC and the other for a secondaries position at a very well-regarded bank. I believe the comp for the GE role is higher when adjusting for COL and the relevant sectors are slightly more interesting to me (HC/tech), but I can't help but think about the alternative. Primaries are more interesting to me than secondaries, at least on the surface, but the other opportunity is on a brand new team (think ~2 years old, bank has plans to accelerate the build-out quite significantly in coming years). Although I do fear being pigeon-holed in secondaries, the prospect of much greater internal upward mobility is very enticing. Life in NYC would also be more enjoyable, of course, despite the higher cost.
The decision basically comes down to interest in work + COL savings vs. potential for upward mobility and NYC residency. I know no one in secondaries and there are pretty much zero data points online about this team due to how young it is, so would especially appreciate insight from people in secondaries as to comp growth, exit opps, and WLB. Thanks
I'd go reputable GE shop all day long. Secondaries is kind of a pigeon hole position, not bad by any means, it's a better WLB job and can still pay pretty well, but not really where I'd be an analyst unless I was ok being in it for the long term. Exit ops will be slim. GE, especially at a good shop, will give you good options to go earlier stage, stay in GE, or maybe even land in a MM PE firm. T2 city is kind of what you make of it. T2 near NYC must mean Boston, DC, maybe Philly. All of which are good cities to live in. Not NYC, but you could probably pretty easily do a couple of years and then lateral back to NYC as an Associate somewhere. I'm a believer in making the sacrifice early in your career if possible, especially if it isn't a major sacrifice. Up to you on how badly you want/need to be in NYC though, everyone has different circumstances.
I get your feeling about the secondaries opportunity being kind of interesting given the potential trajectory, newness of the team, NYC geo, etc but what would give me pause is just the nature of the work in general. Secondaries has developed a lot as an investing class, and has grown nicely as well, but at the end of the day, you're kind of just providing liquidity for illiquid assets. Is it a necessary service among institutional investors? Yes. Will it really teach you much about business? Probably not. To me, it's really more of an asset management type of role than it is investing. A lot of spreadsheet analysis of faceless assets and funds. At least with GE, you're thinking about businesses, doing sourcing, analyzing companies, building IC memos and theses, seeing what it takes for business to do well/not well. Maybe I'm biased, but I think there's way more to learn there than in Secondaries. If you did a couple of years of GE and wanted a cushy New York role, secondaries is a great place to end up. My fear for you is that you do a couple of years in Secondaries, get to Senior Associate/VP, but the realize the only thing you'll ever really be able to do is more Secondaries or maybe FOF investing.
Edit: Revised my stance below to being a little bit more neutral.
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I can't speak from personal experience, although I know folks in Secondaries and have watched their career progression. One of my earliest internships touched on secondaries way back in the day, and I've kept up with a few folks and how they've progressed. I don't think it's awful in terms of progression and I don't mean to come across as a Secondaries hater. I do see far more folks stay longer term in it though than something like banking. Perhaps that due to the lifestyle, perhaps that's due to the lack of great exit options, perhaps thats due to the nature of people taking a secondaries role, being content with rising up within their current role. In my group, most of the Analyst/Associate were encouraged to study for and pass the CFA, which, reflecting back on it now, kind of further emphasizes the point I made about it being more of an asset management type of role. I can't say this for certain, but I'd imagine you'd get a decent look at most AM jobs, maybe starting with secondaries with the ability to move into other things as you progress.
Thinking on it a little more, I'd probably revise my initial post and say I'm a little more secondaries friendly, maybe 60/40 in favor of PE/GE. Given what the poster below me said about GP led secondaries, if the role you're contemplating has a good amount of that (or just variety within the secondaries market in general), you like the team and see an accelerated path to growth, the group seems like they're going to expand aggressively and that presents and opportunity for you, and you want to be in NYC and think that'll be much better for you in terms of lifestyle and mental health, then I could see a pretty convincing argument to be made for the secondaries role. I guess I'd just go in eyes wide open on the fact that your likely paths are probably staying at the group you're in for at least a few years or working towards a CFA and more of an asset management career path. Whereas with PE/GE, you're more on the buyside track, which in my opinion would present you with a little more optionality between investing/banking/operating etc.
I don't think there's a right answer here, both are good options in different ways.
Agree at a high level but other than sourcing, GP-led /single asset secondaries will make you think about businesses, analyze companies, build IC memos and theses, and see what it takes for business to do well/not well (as you laid out). If it's a plain vanilla LP-led role then I would agree more entirely.
That's a good point, the increase in prevalence of GP led secondaries, especially for single assets, does make the work very different, and perhaps more like traditional PE. OP, perhaps a good question to ask the team is what they've been working on.
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