Good day to you all.
Trying to get some ideas from fellow users who have gone through this process before:
I've recently received an offer to join a smaller size PE shop. The fund manages c.$3-4bn AUM, and is specialized in a specific industry. I happen to like this industry and am currently an analyst in the same industry group at a BB.
Team (10 investment professionals) has a good reputation in terms of culture and track record. Compensation is on par with other PE shops.
I will be the only junior level guy in the group once I join (any concerns here other than potential higher work load?)
If anyone can share some insights into things that need to be considered before taking the offer, it would be much appreciated (especially aspects which I have not touched on above).
Thank you.
10 guys managing $3-4 billion (i.e. fund sizes potentially $1 billion+) is actually pretty impressive. So while this may be a smaller PE firm in headcount, not so much on the AUM side.
I wouldn't necessarily be that concerned about higher workload (yet) - obviously less heads means more work per head, but it may also be the case that the mid/senior guys do a lot of their own work as well (if you're the only junior guy and haven't signed yet, then they kinda have to be doing a lot of their grunt work currently, right?)
Some good things to consider:
career trajectory (partner track or no? what's next step? when would you know about promotion potential?)
how long have others been at the firm? if it's low turnover, that's typically a good sign. also might be worth trying to linkedin stalk former employees - if they were all there for 2 years before quitting, maybe a red flag, but can go the other way too, if even the former employees had been there for a while.
Everything written above is generally what I'd focus on. To re-iterate some of the points the takeaways for me would be:
Background of Partners and if possible do reference checks on them. What type of shops did they come from? What is their working style? Partner temperament will speak volumes as to the general tone of the place. If the two managing partners are old school guys who worked at sweatshops for 2 decades, there's a much higher likelihood they'll expect the same of juniors.
Fundraising and LPs, who are the big LPs? How do they know them? How long does it take to typically raise a fund? What is their fundraising/deployment cycle? You ideally want to see relatively easy fund raises on a somewhat regular cadence. You also want to see steady deployment. Year to year this will vary a little bit, but its a red flag if they did something like raise a small starter fund, deploy all the capital in 2 years, then raise a bigger fund, take forever to deploy, then struggle to raise and even bigger fund 8 years after fund II etc.
As other have mentioned career trajectory and what they expect from you. Do they want associates sourcing at all? What does that look like? How do they staff deal teams? What is your role as an Associate.
A few $B for 10 people is actually pretty impressive. Being the only junior isn't necessarily a bad thing, it will mean more work, but might also indicate that there's less garbage work if they've been getting by having more senior people do deals.
Overall looks like a solid opportunity, good luck with it.