I'm currently in the process of prepping for several MM/UMM funds. As a consultant, I have never been that *deep* into the finance forums/scene but I always recall that just a few years ago PE was seen as the non-plus-ultra, some sort of pinnacle of career choices that anybody who went to a target university eventually aspired to work in.
Fast forward and it seems like the environment drastically changed. PE is often described as incredibly mind-draining, juggling various things at once, from boring portco tasks that one needs to do do churning out the 100'th iteration of sensitivity analysis for a MD on a deal that all people think will most likely never materialize.
It is hard to explain thoroughly in written but I once thought of the industry of intellectually stimulating, being "sharp" in analysis and finding opportunities, creating value by just being a good investor --- I think this was the sales-pitch of PE. Whereas when I look into it now it seems like so extremely commotized and more like "getting a CIM, running the LBO, working till 2 AM every night preparing slides for internal investment committee, bidding, most likely not being competitive, if winning doing the same commotized/cookie-cutter improvement process as everyone else does".
Why did I apply for PE? At my MBB, I always liked the PE assignments. I like the idea of investing, improving companies and eventually realizing the exit. It sounds exciting to me and way more fulfilling than the other options on the table (i.e. staying an advisor and constantly churning out slides/recommendation without doing something or going to a LargeCo. as a tiny wheel in a huge machine doing corp. dev.).
The more I research though, online as well as through in-person coffee-chats, it seems like the majority of people try to talk me out of doing it.
And when I think of it from a more secular/macro point of view, I also see why PE is just not that hyped as it was anymore. In a world, where the large firms have hundreds of billions of AUM, the middle-market even outside the US consists of so many different "Blue Lake/Mountain/Greenwoodf Capital Partners" shops, why would this industry keep up with the high-pay through lucrative deals/carry and high reward operating model as it was?
This is where my math seriously stops working. I have a particular focus on continental Europe and it seems like for every private asset under the sun in a certain industry you have the EQTs/Advents/Cinven/Permiras (LC) and then again the Altors/FSNs/PAIs/Nordic Capitals/Tritons of this world standing in line just to purchase it --- and like everyone of those investors follows exactly the same playbook/flavor of the day .. its not like "oh the guys over at PAI are so sharp with their move into this XYZ" its always the same assets/strategy that everyone else is chasing.
Am I making a mistake for looking into PE exits?
Based on the most helpful WSO content, your concerns about PE are not unfounded, and many professionals have echoed similar sentiments in recent years. Here's a breakdown of the key points to consider:
Shift in Perception: PE was once seen as the ultimate career goal, but the narrative has shifted. Many now describe it as a grind, with repetitive tasks like endless modeling, portco management, and internal committee prep. The intellectual stimulation and value creation that initially attracted people to the industry seem overshadowed by the commoditization of processes and intense competition.
Macro Trends: The industry has matured significantly. Large funds dominate, and the middle market is crowded with firms chasing the same deals. This saturation has led to higher valuations, thinner margins, and a more standardized approach to value creation. The "sharp investor" image has been replaced by a perception of cookie-cutter strategies.
Regrets and Disillusionment: Many professionals in PE express regrets about the long hours, office politics, and lack of control over their destiny. Some wish they had pursued hedge funds, entrepreneurship, or other paths with more autonomy and potentially higher cash compensation. Deferred comp and illiquidity in PE can also be frustrating.
Continental Europe Dynamics: Your focus on Europe adds another layer of complexity. As highlighted in WSO threads, the European PE market is highly competitive, with many firms chasing the same assets. This environment can make it harder to differentiate yourself or your firm, and the returns may not justify the effort compared to other regions or asset classes.
Why People Stay: Despite the challenges, PE still offers strong early-career learning opportunities, high compensation (especially at junior levels), and a prestigious resume boost. For some, these benefits outweigh the downsides.
Should You Reconsider?
It depends on your priorities and long-term goals: - If you value intellectual stimulation, autonomy, and creativity, PE might not fully align with your expectations, especially in its current state. - If you're drawn to the idea of investing and improving companies, consider exploring other paths like hedge funds (event-driven or special situations strategies), entrepreneurship, or even roles in family offices or evergreen funds, which may offer more flexibility and alignment with your interests. - If you're primarily motivated by compensation and prestige, PE can still be a solid choice, but be prepared for the grind and potential disillusionment.
Ultimately, the decision should align with what excites you most about your career. If PE assignments at MBB genuinely sparked your interest, it might still be worth pursuing, but go in with eyes wide open about the realities of the industry today. For further insights, you can explore these threads: - https://www.wallstreetoasis.com/forum/private-equity/for-seniors-who-ha…</a">For seniors who have spent your career in private equity, do you regret it? - https://www.wallstreetoasis.com/forum/private-equity/why-i-left-pe-swit…</a">Why I Left PE & Switched to the Public Markets - https://www.wallstreetoasis.com/forum/private-equity/is-pe-existentiall…</a">Is PE existentially fucked?
Sources: Non US/Europe IB/PE Overview, Non US/Europe IB/PE Overview, Is PE existentially fucked?, For seniors who have spent your career in private equity, do you regret it?, For seniors who have spent your career in private equity, do you regret it?
Dude your only problem is that you are not busy enough. I saw and responded to your other post about how brutal the transition from MBB to PE is - then you start this non sense around PE is not what it used to be. It seems like you are trying to justify / find a reason not to pursue it. And to my earlier point on your previous post if you don’t want this with all of your heart it will come out in interviews and you won’t even make it, and in the case you do you will quit in 6 months. Let me save you some time, your only framework should be do I want to work in PE that no matter what happens you will not quit - then pursue it otherwise stop dicking around and get busy doing other things.
Haha fair point. But look, I am at am major infliction point again at this point of my career (finding the right MBB exit). The first major infliction point was when post school when I was in the race for both IB and consulting and I have to give it to you when you say "the 100% notice if you are not fully commited to it". That also exactly happened to me while recruiting for IB. I just felt the people wayyy too intense in the interview room and also grilling me if I basically were willing to work day and night including weekends and I know what I sign up for. That was the point where I decided that I go to MBB.
Now I am again at such major decision point and my head is constantly spinning on what to do next. I always told myself I would like to move to PE eventually just for the sake that I couldn't stomach to work in a large corporate and also haven't drank the kool-aid too much to have what it takes to become a revenue generating top consultant.
I'm deep down very analytical, into numbers, more on the introverted side .. like to analyze complex stuff and drive to solutions. I think the perfect match would have been something markets related but that is long gone now.
I always thought yeah PE is for me since (at least where I am based) the "sell" for the MM/UMM of PEs was drastically improved lifestyle compared to banking, might be stressfull during deal sprints, but overall sustainable lifestyle and superior culture.
And now that I am getting deeper and deeper into this I hear "banking 2.0, work every weekend, most days to 12 is the norm" so actually I am a bit flabbergasted and looking for rationalizations that justify whatever moves comes next.
Maybe try asking yourself what you actually want to do, instead of trying to figure out which of the pre-defined prestige paths you think is going to be the least painful? There’s lots of things you can do when you leave MBB. Don’t pretend corporate, PE, or staying in consulting are your only options.
I think people started hating PE more when people continue to funnel in droves into MF which is heavily commoditized at this point and in which you have way fewer opportunities to move up with confidence.
Partners are hired externally now and are people with proven track records (which is hard to do).
You get worked to the bone like in IB and then can get cast aside / pushed out. It’s not like it used to be.
IMO the path now is to find a promising but smaller fund where you can get meaningful carry and see a 15+ year career. Hopefully the fund grows and then you get a taste of what PE at the larger funds used to be like.
As a former MBB consultant, I would say First_Lien is 100% right: PE requires 110% dedication and you really truly need to love the job to succeed, the knives are out from day 1.
The expected value from a PE career now is probably 20-30% of what it was 10 years ago but because the asset class is so illiquid and fund performance so opaque people haven't realised just how much more competitive (and therefore less lucrative) the PE world has become. I honestly believe that the founders of my fund (both of whom are now billionaires) would struggle to successfully recruit into my firm today. It's all about being in the right industry at the right time and PE isn't that today (speaking broadly)
Aren't you alluding exactly to the argument I am trying to make?
Totally understand and fully agree.
This is what my fundamental analysis is pointing me to.
And both of these arguments don't go together. How are you supposed to mentally go all in, knifes out, bla bla, kind of berserker mode and sell your whole life if deep down in your mind you assume it is very likely that the big pot of gold has long been looted.
I get "grinding", working weekends, going the extra mile and it makes sense if you know 2/3/x years down the big rewards (be it in form of compensation or any other success) are waiting. But how would you go in with the knifes out mindset when you don't expect the reward anymore.
Difficult situation in my opinion.
My arguments do go together - my point is that to succeed in PE you need to be 100% dedicated and if the only reason you’re going into it is that you think you’re going to make boatloads of money when in reality that “pot of gold” no longer exists then it’s best to stay away as you’ll lack the motivation when you see your portfolio companies are all about to return 0. Even if you do get in, you’ll be exited very soon
This post is completely accurate
This post is completely accurate
This is getting boring. You can’t keep making the same thread over and over again with a slightly different narrative but almost the exact same point.
This. I'm pretty sure OP didn't get PE and is constantly making these threads to get affirmation from strangers to make himself feel better.
Not true. Also "didn't get PE" is not a thing in continental Europe. There is no on-cycle or recruiting window. Once you are at MBB you constantly get headhunter inbounds in the tenure range from 2-4Y so no I did not strike out. I didn't even take a single interview yet.
its 100% commoditized. dont expect to fall in love with this job
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