Hi All - so 2nd year Associate at UMM fund in NYC and was told there are spots for me to stay on for 3rd year in July post mid year review. Just found out that there are actually no spots and have 8 months to find a new seat - I’m a bit worried given bad deal experience and the amount of other associates in a similar boat. Will love to stay at current fund for another year but didn’t apply to b school and want to stay in familiar seat for the long-haul.
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This is a crummy situation, I'm sorry. I think a lot of associates are going to experience this given the market backdrop.
If you are in fact willing to do b-school, you have two high-conviction paths that buy you one extra year that will fill your resume attractively while you prepare your application: portco role, or startup.
Working at a portfolio company is a tried-and-true path. You can either ask the principal(s) or partner(s) at your firm you're closest with if a portco they cover has a specific need. The most straightforward path are roles like corpdev, strategy, operations, and FP&A. Someone with the banking to buyouts skillsets is an immediate snap-on here.
Something that might look less intuitive at first glance are supply chain, marketing, sales operations / partnerships / business development, and the other things that feel less finance-y.
The reason for this is that your b-school application narrative is going to be about having done two hypercompetitive finance roles consecutively and wanting to broaden your perspective through experience. That narrative is stronger if in addition to taking an operating role, the role itself is in a function farther from finance.
Separately, you're actually going to learn more than you would in a corpdev or similar role. You'll be stretched in new ways, and if you have an open mind (that the role is not permanent, your colleagues aren't people you have to face every day for five years so it's okay to potentially make mistakes or ask obvious and basic questions), you'll discover many things that will be valuable for your future career.
Like how to work with people who have an entirely different motivation matrix than the type-A, intrinsically-driven, highly-educated people you've been surrounded by so far at work. How difficult it is to translate quarterly objectives from bullet points on a presentation to actual results through day-to-day effort. How to recruit people from a different area across a big company who have never met you to help you get the thing you need to achieve that week done. And so on.
The other path is to find an exciting startup and convince them to take you on. This one would be trading a little bit of cash comp for a little bit more glitz or shine factor to your resume. (Corporate ho-hum middle market sponsor-owned BlandCo versus 'Exciting Series B startup in emergent industry', you do the math.) Depending on the stage the startup has reached, the cash comp may not be a factor versus the portco. Both of these roles are going to be a significant cash discount to your all-in private equity comp.
Everything I said above holds true here. You can pursue a strategy, finance, or bizops role which is generally a layup; those teams are looking for your exact profile. You can also pursue specific functional roles if you want to stretch your skill-set. A third option would be chief-of-staff. If you are looking for a very explicitly timed stint (my departure date is June 30, 2025 so I have six weeks to decompress before b-school), you can be completely transparent with founders about your goals. They will get it. Startups do not have the luxury of opacity.
If you sell yourself as a person with a high floor on intelligence, work ethic, intellectual curiosity, and humility who is looking for a 12-month crash course on how things work, there are innumerable founders who will value having an extra set of hands and eyes on their critical tasks who have zero problem with the fact you have a defined end date in mind. Matter of fact, it may actually be freeing. Startups are inherently plastic. They grow quickly enough that people never have the same job description over their full vesting schedule. The best performers are not people who do the same thing well for a long time. They are the people who are best at figuring out what needs to be done well, even if they don't do it perfectly well.
You can read this comment from the 2021 holidays where I wrote quite a bit about the overlap of a startup role and business school. The anonymous OP wrote numerous comments, including an update seven months later. I think you'd find that entire thread valuable.
Again, sorry for the jarring news. If you are interested in b-school, the two paths I outlined above are both eminently doable and I think valuable. It can be off-putting to consider lower economic compensation, but if you think of learning as part of the compensation formula, if you pick the role well, you may view it as actually coming out ahead.
Good luck.
My worry is not being able to come back to PE after
I think you'll definitely be able to come back to PE after any of the options APAE described above, I wouldn't worry about that. Tbh, my vote would be the working for a portco in a non-finance role (marketing, supply chain, BD, sales ops etc) - your understanding of operations and the actual value creation will grow exponentially, and it will make you a better PE investor later in your career (I know it did for me).
That should not be a concern.
My point was to highlight how to gainfully fill an extra year of professional experience while you polish your applications. If you apply and matriculate, your resume will look better for post-MBA roles than the people who are cookie-cutter 2+2 of banking to buyouts.
Secondly, you could apply for lateral / senior associate roles from that hypothetical role I was advocating for. There is legitimately nothing wrong with saying you wanted to explore something else while giving yourself the space to really research what partner-track firms are out there in an unhurried way. That narrative sets you up perfectly for re-entry to private equity.
Agree with earlier posters suggestions.
I do think a non trivial part of this is simply waiting for economy to come back. If you really want to be in PE long term, I'd scaffold the approach:
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