Risk/reward of joining a new team at an established manager
How would you think about the risk/reward of leaving an established group/team to join a new team (with no track record) within a large, respected and growing platform? What are some things to look out for / suss out during the recruiting process for a career-track role (VP)? Think something like the secondaries buildout at LGP, impact at Apollo, RE at Stonepeak, new infra teams at a host of managers, etc. TIA.
Based on the most helpful WSO content, when considering the risk/reward of leaving an established group to join a new team within a large, respected platform, there are several factors to consider. This decision is akin to evaluating a new opportunity with both potential upsides and downsides. Here are some key points to consider, inspired by insights from the WSO community:
Team Composition and Leadership: One of the most critical factors is the composition and leadership of the new team. Look for a team led by individuals with a strong track record, even if the team itself is new. Leadership with experience in steering successful projects or teams can significantly mitigate the risks associated with joining a new team.
Strategic Importance of the Team: Assess how central the new team's function is to the overall strategy of the firm. Teams that are closely aligned with the firm's strategic goals are likely to receive more support and resources, enhancing your chances of success.
Resource Allocation: Inquire about the resources allocated to the new team. This includes not just financial resources but also access to the firm's broader network, support functions, and technology. A well-resourced team will have a better chance of overcoming initial challenges and achieving its objectives.
Cultural Fit and Team Dynamics: Since the team is new, its culture and dynamics are likely still forming. During the recruiting process, try to gauge whether the team's emerging culture aligns with your values and working style. A good cultural fit can significantly impact your job satisfaction and success within the team.
Growth Opportunities: Joining a new team can offer unique growth opportunities, as you may have the chance to shape the team's direction and contribute significantly to its success. However, it's important to discuss and understand the potential career path within the team and the broader organization.
Risk Management: Consider the risks associated with joining a new team, such as the possibility of the team not achieving its objectives or changes in strategic priorities that could affect the team's future. Assess how these risks align with your career goals and risk tolerance.
Feedback from Current and Former Employees: If possible, speak with current and former employees of the firm to get insights into the firm's culture, the leadership's reputation, and how new initiatives are typically received and supported within the organization.
In summary, joining a new team within an established manager can offer significant rewards, including the opportunity to be part of building something new and potentially career-defining experiences. However, it's crucial to carefully evaluate the risks and ensure that the move aligns with your career objectives and values.
Sources: Q&A: Vice President - European BB Investment Banking (Industrials), Leaving a single manager to start a book at a platform, Is Working For A Start Up Worth It?, Burned out at dream job - time for a change?, Help! MD is asking me to come with him
Think generally it'll be a lot sweatier and more stressful in a 'growth mode' team (in any industry) vs. established one. I'd have to imagine comp would be reflective of the higher workload - but not always the case. I also think for a newer strategy there will likely be: 1) more consensus building / teaching internally (think more slides, more research, etc.); and 2) lot of work evaluating different types of opportunities to figure out what gets traction internally.
I joined a new strategy inside of a MF and candidly it has been a huge pain. My thought was that it would be building a business with the broader resources of a large platform and the reality is I’m literally doing everything. The amount of time I spend on infrastructure related tasks is outstanding. On the fundraising side, when the market went sideways in the latter half of 2022, everyone’s focus shifted back to the flagship products so fighting for attention internally was a huge part of the battle. Every 3 months we were trying to justify how our business could reach scale. Economics on new fund launches are relatively comparable to existing funds (only 1 data point here) because the mothership takes the stance that they’re the reason you can launch this new business.
+1. If you could run it back, would you have joined the same group again?
Tbh I wouldn't do it, you're gonna be playing second fiddle most of the time and a lot of times won't get the backing you really need.
As others mentioned (assuming you're an associate -> Director) you want to be doing deals as that is what people will care about if you ever decide to leave the firm. Yes, learning about fundraising and setting up shop is cool but no other shop will really give you credit for that. The worst feeling is when you're at the office at midnight (as an associate) answering dumb LP questions for a fundraise
I don't have any insight into the analysis OP is requesting, but just wanted to point out that a lot of powerhouse groups were "second fiddle" at some point. BX RE & credit, KKR infra, Apollo Credit, come to mind and have become "first fiddle." But I'd imagine those are few and far between, and that the buyside is full of such groups that never took off (saw a thread recently about Veritas Credit falling in this camp).
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