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.
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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?
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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.
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