Monkeys,
I see a ton of posts about people that have offers to lateral over to other funds, and there's very little follow-up or post-mortems. Inspired by one post that I just read, I wanted to pose the questions here:
1) For those of you who left your current fund to lateral over to another, what has your experience been? Positive, negative, neutral, etc.?
2) For those of you who got an offer to later but did not end up taking it, do you regret it? Why or why not?
I would also love to hear what you knew before going in (e.g., it was a lifestyle shop/grinder, comp was low bus scaled quickly vs no upward trajectory but good comp, etc.).
Just trying to get an anecdotal sense of what has happened as you've moved around.
Bump
Bumppp
I'll try to remember to post here in a few months. Moving soon from a challenged LMM in a t2/3 city to a fast-growing MM in NY. Going into it very excited and optimistic because this is a massive career move for me.
Good luck brother 💪
Lateraled from a well known MM (arguably MF) to a startup fund that was established but still in early growth mode.
The world was promised to me: promoted title, path to partner, no more senior layers added to team, fantastic work life balance, millions of carry in both short term and long, autonomy, etc etc.
I was sold. Left my firm, left my city….and entered into the most toxic firm culture I’ve ever been a part of. As an example: Yes, the hours were from 8-6/7…not awful but still nearly 12 hours at a desk 5 days a week, zero ZERO allowance for WFH. However it was expected that you were at your desk at 8, no exceptions. And if you left before 6 or 7, even if you had a light day or wrapped up deliverables, there was no excuse. Coworkers and assistants were instructed to tell the partners if they saw it. As a VP with 8 years experience, I felt like an analyst in IB again. Co-workers were hostile, unfriendly, and outrageously competitive. There was no camaraderie, it was cut throat on purpose, and built on the vindictive financé hardo archetype from the 80s. On top of everything, my comp was about 60% of market for similar sized funds - should have been an immediate red flag. 2nd red flag I should have seen was how dead quiet the office was during my superday, and how boring and serious my future colleagues were.
Needless to say, I left the firm earlier rather than later. It was favorable, even in this market environment, to try to find the right long term cultural fit rather than stick it out in misery and hope for another lateral.
So - grass is not always greener friends! If it’s too good to be true….it probably is.
They didn't make it obvious it was a startup firm? I would expect more hours at a new fund since anything short of great returns is a problem for raising their 2nd fund?
Not the case here - I don’t want to give away too much. Like I said, established so more growth mode.
There was also no “extra hours” due to startup grind; this was just a niche strategy low deal flow platform. I would find myself sitting at my desk for hours with espn open just bc I wasn’t “allowed” to leave and had ran out of sourcing steam or portco to-do’s. Poor macro economy, limited deal flow, focus on add-ons, small portfolio. Was just an anecdote to the type of culture that the firm built off. The lack of trust / micro management FaceTime culture common as analyst in IB. It was not a good or motivating culture lol.
Much greener - WFH flexibility is arguably my favorite component of current vs former job. 5 days a week in office with set hours is outdated.
Sure, I might work more hours now, but it’s when I want to. I’m single so I have no responsibilities - no issues modeling late at night when it’s MY decision to do it. Would rather make my job easier for the next day than watch Netflix. Play some phonk and model and that’s a solid night for me
Went from a very high AUM:IP ratio fund to a lower one in pursuit of a more sustainable lifestyle. Did this when fundraising trajectory was not really a concern for anyone and people assumed you'd always be able to just raise a new fund at a similar/larger size than your prior. Definitely fucked up.
The way you fix having too much work/capital is by hiring and growing. It's temporarily painful but can quickly adjust to equilibrium. It's a great problem to have.
Not having enough capital is a brutal position to be in. Seniors withhold negative information to prevent people from freaking out, layoffs occur, and there is a bunch of competition to deploy that finite capital to save your seat. Reaching equilibrium is a slow and painful process.
This may sound obvious, but if you are considering switching seats in this environment, you have to do a ton of diligence on the current state of fundraising at the firm. Historical datapoints on fundraising are no longer as reflective of the current state for plenty of seats.
I moved from a very small, cushy LO with a tiny team and fantastic WLB to a boutique LO with very high AUM per IP and a more demanding WLB in a new city. It has been the best decision of my life. Getting adjusted to their process has been a bit stressful while trying to generate ideas but the people have been fantastic and the faster pace is exactly what I needed to stay engaged and grow as an investor.
I'm also making way more money and becoming a much better investor which only excentuates my future opportunities with this new firm. Again, best decision I have ever made.
I moved from an investment bank in Hong Kong where I was doing a management rotation that had us in ECM, equity research and PE, and went into China to join a fast growing PE fund.
It made sense in theory. In reality it destroyed my career and cost me 15 years. I have floundered since and have been miserable.
Not a day goes by that I don't regret the decision on a level I will never be able to express. I keep trying to fix things but just can't. It destroyed my life.
Edit- sharing story by request; the punchline is, I went from a perfectly good investment banking rotation program with the bank investing in our education, and instead went to a private equity fund, because I thought that supposed to be the holy land. however, the private equity firms never have time to train you. that is the round of investment banking. That's the quid pro quo. you put in the hours and the bank teaches you. but you have to stay long enough to actually learn the skills. I was nervous that the private equity fund offer wouldn't be open indefinitely and the market would move on. And I know how difficult it is to get into private equity. so I made the move but far too early. I didn't have the skills yet.
On the face of it. it wasn't crazy because the private equity fund was managing money for Bill Gates, Temasek, Goldman Sachs, and all the blue-chip LPs, you can think of. however, the fund's success does not necessarily translate into the employees' success. so I ended up taking myself out of a perfectly good training program and making the move early into PE before I had the requisite skills. I was not nearly competent enough to be active on deals.
and in any case it was a mainland China, private equity fund with a working language was Mandarin Chinese, whereas the Hong Kong-based investment bank had English as the working language. so I really stacked the deck against myself. I ended up getting sidelines into investor relations and I've been unable to dig myself out ever since.
I've made the devils bargain several times with subsequent private equity funds. I say that I will do both IR and deals. But the fact is IR is a full-time job and is very core to the growth of the fund. And deal work is also a full time job. Not possible to do both in tandem. and so I never get any time to actually deals.
Subsequently, all of my work has been investor relations, which is something I dislike very much and have been stuck in IR Elba ever since. And it kills me that I did this to myself and for no good reason. My fellow associates from the ibank were put on rapid promote and most made MD and clocked bank. Several are already retired.
. And the ibank was even rotating us thru their PE divisions. I did a rotation in their real estate PE fund and had a return offer. My manager and team were chill and really liked me. And it ended up being the best returning property fund in Asia generating nearly 40% realised annual returns. No joke. But there was no way back. There were too few seats and once I left my return offer seat was naturally filled quickly.
15 years later I still haven't been able to get this train back on track. Let my experience be a cautionary tale for you. Wait out the time and get all each experience has available to you. Patience wins over ambition.
Oh and once I raised the next vintage of the PE fund ($1.5b 3x oversubscribed) I was given the option of staying in IR exclusively or taking a couple months payout and leave. I took that.
I was never able to onramp back to ibanking and every PE fund I speak to wants me exclusively for IR. To pay bills I have done that several times. But I just don’t want to do that anymore. I got into business because I like learning about technology, industries and companies. I love deep diving into things. Not smiling and dialing and repeating the same boring fund pitch a thousand times. IR for emerging managers is akin to rolling drunks and picking pockets. IR at a sought after fund like my former employer is easy, but also hard to get and boring.
For the last three years I have held out for something better, which has simply translated into voluntarily staying unemployed, just doing consulting gigs, because I can’t bring myself to take another full time IR role. I live off my savings and investments. I won’t do IR again.
What is so bad about the PE fund?
Was that where you got pigeonholed into only doing investor relations?
Yes exactly. That’s part of the problem.
What exactly happened? Got a story?
Do you think part of the issue was that you were in China / HK? I know that it's a much more competitive job market there in general and good opportunities passed by (or left) could result in never having something that good again. Whereas I think about your background in the US market, there could have been other solid PE opportunities available to you if you're willing to hustle.. maybe join a smaller fund, then lateral to a larger fund etc? I'm not talking about now of course, but maybe a year or two into your PE gig when you realized it wasn't working out.
Moving back to the USA at that time would have been wise. But that was during the GFC. Still would have been difficult but perhaps not impossible. Once one does fundraising it does pigeon hole the person. Just had a call with a fund manager earlier today who strongly suggested that I stop fundraising altogether as it taints my CV. It’s how I feed my family but i understand his point.
Damn man, I'm really bummed to read this. I hope you find a role that fits you better soon. From reading your post, sounds like you've also been struggling a lot with rumination and depressive thoughts tied to career. It might be helpful to talk some of these points over with a therapist - I've been doing that recently and it has helped me immensely.
I started out at a MM PE fund and was told I would not be getting promoted right before my second year bonus. I was given 6 weeks of runway to find a new job, and ultimately couldn't find anything that I was excited about. I struggled to get looks from headhunters who kept questioning the structure of my program and how much formal training I received. My career has been pretty derailed since then and have been struggling badly with mental health issues as a result.
All I would say to prospects is that the PE out of undergrad path has pitfalls. Yes, you'll work less hours and get more interesting work than your IB counterparts, but oftentimes that comes at the expense of adequate training and deal reps. You need to make sure that the people that hire you are invested in your development, otherwise you may not get promoted and will have a harder time finding a new gig than an IB analyst at a good bank. If you choose to go this route, make sure to be super proactive (seek out mentors at the firm, leverage external training resources as needed, stay late and review files on the shared drive, etc.).
Leaving with one word of positivity - I still don't think it's too late for you or myself to turn things around. I'm sure there's an opportunity out there that will help you rebrand, or at least pivot more towards something you're excited about. Here's a quote from Ayn Rand that I've been reading on my worst days:
"Do not let your fire go out, spark by irreplaceable spark in the hopeless swamps of the not-quite, the not-yet, and the not-at-all. Do not let the hero in your soul perish in lonely frustration for the life you deserved and have never been able to reach. The world you desire can be won. It exists.. it is real.. it is possible.. it's yours."
Persistence is key - I'm rooting for you man.
Bro you need to get over yourself. You’re wallowing in self pity.
“Generally speaking, envy, resentment, revenge, and self-pity are disastrous modes of thought; self-pity gets pretty close to paranoia, and paranoia is one of the very hardest things to reverse; you do not want to drift into self-pity.”
Munger
Bump
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Latereled from a rating agency to a bank. Comp went up significantly, however, it is really hard to go on vacations and really check out. Probably the only pro of working at a rating agency was going mia and chilling out during vaca. However, I think in the long run this is the best move.
I first lateraled from London LMM to regional office of pan-EU MM. Grass was certainly greener (larger fund, deals, and more future / potential, professionalism, etc).
I’ve since received several offers and interviewed to final round at UMM fund (pan EU with centralised approach, first time fund with strong team) for senior roles. In the end declined despite better comp and AUM/IP ratio, due to (ex)employee/LP/market referencing not coming out great.
I know the shortcomings of my current role; but also appreciate what I have.
I’ve heard good & bad experiences. I think people lateralling from PE funds know what to look for, ask, and do in terms of DD on the potential new employer. If you don’t and get ‘trapped’ you either have very poor luck with amazing theatre players, or you probably shouldn’t be in this job…
My last job was as an associate then senior associate at a small LMM fund in a Tier 2 market. We were in the office 5 days a week, but it was about as close to ~8-6:30 as a PE job can be, with minimal weekend work other than a few hours Sunday evening catching up on things ahead of our Monday team meeting. I made around $170k, and while I didn’t yet have carry we were talking about ~$500k allocation in the next fund if I made VP. We only closed one deal in the three years I was there (hence the hours), so fundraising and promotions were anything but certain.
I wasn’t on any recruiters’ radars, but I managed to leverage a relationship into an introduction that led to a new role.
My current job is a somewhat well known MM in NYC that’s raised multiple successively larger funds. As a VP, I work 80-100 hours most weeks. I should make something around $500k this year with a carry allocation that should be worth $2-4MM. I’ve closed three platforms in two years.
Is the grass greener? In many ways, yes. I like my group / culture. I’m objectively paid way more than I was before even after taxes and rent. I have real experience I can talk about, and my phone rings for jobs at name brand funds now (not that I’m looking).
Even so, I sometimes wonder “what if” as I shut my laptop at 2am on a Friday and get ready for an 8am diligence call. I’ve probably done wonders for my future, at some unquantifiable cost to my present. And yet, I like it too much to stop…
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