Long-time lurker, first-time poster. Grateful for this community.
Recently had my review and found out I'm getting kicked out of my PE firm after my 2-year Associate program.
I'm a 2020 target school grad and did 3 years IB and 2 years PE Associate. Neither of my firms were top BBs or MFs, but both respectable.
I'm not interested in business school (see it as annual $300K opportunity cost + $100K tuition * 2 years = $800K total cost).
I don't think I would be a great fit for a hedge fund. I do have a little interest on the surface, but am a steadfast index fund investor. I'm not a gambler.
I have managed to amass a net worth of ~$500K, which I am extremely grateful for, and puts me in a far better position than my parents were at my age.
But now I'm about to move out of NYC and move back in with my parents at age 27.
This was supposed to be the golden track right? IB Analyst -> PE Associate -> Master of the Universe?
I thought that this golden career path would provide me optionality to do ~whatever~, that's what I was told. But, for example, I haven't had great success landing interviews for strategy or other corporate roles at tech and other companies.
I have a genuine interest in investing in private companies and would love to continue in Private Equity, but I'm not having a ton of success finding post-Associate opportunities.
PE generally seems over-saturated. The business model is structured as a bit of a pyramid where young people work for 2 years and then are discarded by middle aged dudes at the top who don't have to do a ton of work, get paid a lot, and won't leave.
I think I'm too young/inexperienced/risk-averse to start my own fundless sponsor or search fund.
What's next for me?
We lied to ourselves
Less dramatically — people aren’t doing deals. Deals keep the money flowing and keep people moving up. Rates and saturation — but all things are cyclical.
Separately high level — almost everyone in PE who has had a fabulous wealth outcome has taken risk. Obviously the founders of the industry took risk. Then the second generation took some risk too — it wasn’t proven or anything. Then you had 1-2 generations of folks who actually had a great deal from a risk / reward perspective because of what is perhaps a very rare long bull run with increasing asset prices, and a growing but still small field of competition for deals.
Now, a job in PE is not a risk. It’s a well worn path available to many many people.
To have a fabulous wealth outcome, you probably need to take some risk, or accept the new paradigm and be an employee and solve for best WLB to comp ratio.
Feel like the same can be said for all high finance. Publics are institutionalized, banking is far from a risk taking career, debt is inherently less risky…
Our generation just doesn’t have the same opportunities to take risk as those who came before us. Really limited to entrepreneurship/VC but if anyone can think of anything else please enlighten me
Become influencer or sell online courses😭
Dude there’s so much wealth creation from VC money in the last 15 years this is a crazy statement.
Eh. It’s out there. It’s probably not sexy tho.
People who identify as prestigious winners gravitate towards competitive things with social proof.
The big money is never there, by definition almost.
.
Find a remote gig in corporate, travel the world for a few years as a digital nomad, spin up a side hustle. If you love investing, invest your own money on the side.
That’s what I did at least and it worked pretty well for me - no regrets financially or personally. Crossed $1M NW before 30, got to see the entire world, and I’m not fat and miserable anymore.
Take your destiny into your own hands rather than hoping for some job or career to benevolently save your life and give you money / fulfillment / purpose / self esteem.
Totally agreed, but do remote roles that let you work internationally (particularly in a nomad spot with a way different time zone like Thailand) even exist anymore today? Even domestically, the roles are few.
No idea on the prevalence, but for whatever it’s worth I’m actually actively hiring for juniors and my team / company is fully remote. I’d guess it’s the less sexy employers and companies that still are remote to try and get talent outside of their core geographies.
Regarding international travel - no clue if it was technically allowed or not. I didn’t ask for permission and no one cared to ask where I was as long as I was doing my work and was responsive.
Have to be somewhat anonymous here but my close friend’s firm employs this exact deal runner from top backgrounds on a deal-by-deal basis, working remote wherever you want, and paying $100k per investment. They way he described it to me is - take the skillset we all have now, find work life balance finally, make $300-$400k a year on 3-4 deals a year, and have the ability to do $600k-$1m at scale if you like the model long term. I’ve been tempted, I’m just a bit more senior.
Know you said it's anon, but would love to learn more about a setup like this if you are willing to share any more information
Can i DM you about this? doing something somewhat similar at the moment
Also curious about this setup. Any more details, reading or background you can share on other firms/platforms (ie not your fiends) that do this.
interested in learning more if you're willing to DM..currently couple of years into VP
Would love to know more
That model definitely sounds appealing, especially the flexibility and the ability to focus on fewer, higher-impact deals instead of the constant grind. I think the real question is how consistent the deal flow is and whether the income variability fits your current stage of career and personal commitments.
For someone earlier or mid-career, the trade-off for better work-life balance can make a lot of sense. But if you’re more senior, stability, team leadership opportunities, and long-term equity upside might outweigh the freedom of deal-by-deal work.
Still, having the option to scale up or down depending on lifestyle goals is a big plus. Maybe testing it on a couple of deals first, without fully stepping away from your current path, could help you see if it truly fits.
Same request for DM, also VP in PE LBOs
Dude that’s so cool… would you ever do an AMA?
What was your side hustle?
It's called take a paycut and go to corporate. Finance isn't that great and there's not nearly as much "optinality" or "doors open" as people tell you. FYI never listen to anyone over the age of ~35 on here. None of them actually had to grind, relative to today, to get to where they are at but they won't ever admit it though.
P**sy galore that you
Lol
This is SO accurate!
What’s a nice way to put it - you went to a target but generally kind of average and just going on a track that happens to 90% of people eventually so wouldn’t take it too hard.
Proof? You are calcing 300K in opportunity cost per year by going to MBA when it’s really should be what’s your FCF (like post tax, living expenses savings off your earning). Unless you were on track to make a million as a 3 year associate in whatever fund you were - don’t mix up revenue with FCF
I went to MBA and joined as associate in banking after. See my value?!
God help Stiefel for employing you ….
I’ll admit I wasn’t nice (and apologies), but I wasn’t wrong. Nobody here telling me the math was correct.
It’s just a pet peeve where people mix up value proposition. Can’t say OP would have better ROI w MBA, but his approach of putting $1mm cost to it when he doesn’t have any other options sitting here today - it’s just wrong.
classic mba banking associate response. this is why they're regarded the lowest on the totem pole.
It is the golden path. It is not a guaranteed path. How many MoUs are there? Not every IB->PE grunt becomes an MoU. It is a funnel for a reason, and most of the determinants of this path are outside of your direct control.
People grossly overestimate how transferable IB/PE skills are. There are real, tangible, skill benefits from being a grunt in that space. However, this is only the case in very specific, very narrow ways.
And in terms of recruiting for corporate roles, basically all jobs have similar recruiting dynamics once you get past the entry-level roles. It is all incredibly random and is as much about who you know as anything you have done previously.
First of all, don't underestimate the impact of your savings. Despite all the hype about hOw ExPenSiVe eVeRyThiNG hAs bEcOmE, there is no denying that $500k is still a lot of money. Don't believe anyone who tries to tell you otherwise. You've bought yourself a ton of time and flexibility to figure things out, and you should use it.
Second, don't overlook the rarity of the generalist skill set you've built. We joke about lining up logos but the reality is, for basically any kind of white collar work you've seen so much more in those 4 years than most people . . managing the constant deadlines and hours, being surrounded by smart/agressive/insane people regularly, good combo of math/writing/communication. You'd come into most roles a lot more hardened than others there.
If I were in your shoes I'd spend a couple months opening up my mind by not actively thinking about the career. Let the thoughts come to you while you do something else . . travel, volunteer work or whatever you can put your mind to that's not your career.
I think startups are underrated right now. There was that period around 2018-22 or so, where joining a startup was so much "the thing to do" that it became cliche. Tons of competition for the roles, and not a lot of great innovation happening at the time . . in other words, low supply of jobs and high demand for jobs. Now it feels like its flipped at least a bit, where the AI cycle is pushing true innovation and the startup world at the same time has lost some of its shine as a place where everyone applies.
So I'd be thinking startup in your shoes, using the time and skill set to navigate toward a more sought-after role in that world. Even as a risk-averse person, you have the savings and the startup experience builds plenty of additional marketable skills. I'd think of it as an MBA replacement, minus the cost.
If you still think it's too risky to do that, then corp dev makes sense. Again given the runway you've set up for yourself, you have the ability to fight for more sought-after roles within that space instead of having to settle for whatever an average role might look like.
Continuing to search for PE also makes sense of course, but wanted to provide alternatives since you've said that's going rough. Which I get. There's always very few seats and they tend to hide.
Start-ups will beat PE bc you learn better skills (how to actually grow a business and create value) and since PE has so much money and competition, they will give you an outsized cut to beat market returns for their investors.
PE used to be great so you’d pay them to give you above market returns, but now since it’s so institutionalized, I think it’s shifting to where PE will pay you for outsized returns running a business.
Let's walk through an absolute worst case scenario. Assume you do absolutely nothing but party and travel for the next year and somehow burn through $100k. Great now you have $400k and are 28 years old.
Step 1: Find a job to pay your bills. This doesn't have to be some spiritually transforming end all be all it just has to be a functional job in the worst case. Hopefully you save some money, but if not.
Step 2: Throw your remaining $400k from above into an index fund and get a ~8% real return annually. You'll have a $1mn on compounding alone at age 40 - by most estimates this is something like a 87-93rd percentile wealth outcome for that age.
Step 3: Profit???
I don't know man you're getting a top decile outcome for a few years of sacrifice & grind followed by an extremely chill lifestyle in corporate or something else. Plus that comes with a free call option to continue to pursue a higher-risk (maybe lower-middle-market, maybe crypto, maybe who knows) career path as well in case you have the continued tolerance for that. The magic of compounding from this point onward really sets up well for you over the next few decades in a way that no other career choices (even medicine, law, etc.) except for maybe tech (but different personality / skillset required) would have achieved.
I’ve heard this same talking point so many times, but it entirely hinges on market returns and at what point you started investing. Those who began in late 2021 and didn’t have cash to buy the subsequent drawdown are hardly up more than ~20% over a 4 year period. Better yet, imagine if one had started in a pre-GFC period and endured a multi-year drawdown. There’s a lot of luck involved with this line of thinking unless you’re suggesting they time the market.
Yeah that’s all fair, but I think his point is that you have cushion and having savings buys you a lot more optionality to take risks and try new things than your peers in most situations.
Waiting for the math to pencil in such a way that you’re completely immune to the volatility of markets and human existence means you’ll be waiting for a long long time and need a huge amount of money to feel secure enough to take a risk.
A kind of similar thought exercise - why ever invest your money when there is risk of it going to 0? You underwrite some amount of risk for some amount of upside. If OP decides to pivot careers or take time off he is underwriting some amount of risk for the potential of some amount of reward for that. Whether the risk / reward pencils out is for OP to decide.
I am a little concerned that you work in IB and still don’t understand how index funds work… would recommend reading literally any basic personal finance book which shows that even if you invested at only the peaks , over the time periods that the other guy is talking about, the math on returns still works (unless you were to buy leveraged funds but that’s a whole other game)
You're 27 and complaining about a net worth of $500k??
have you ever considered a crossover fund or private investment team for a HF?
Get a skillset
So fucking detached from reality
in what way
It IS the golden track if he's managed to accumulate half a million by the age of 27. Besides, most PE funds end up getting rid of associates after two years anyway. So there should have been a reasonable doubt whether that would happen at his fund.
I'm so fascinated by the frugality of people in high finance sometimes. Like you have half a million in net worth yet now have to go live with your parents? Take a chance on yourself and keep networking. You'll find another thing soon enough. Leaving the city is a way more negative ROI than whatever you might pay for a few months while you get back on your feet. This happens to every person at some point in their careers and these guys think they are immune to it. Well, I'll just say right now that I think this is completely normal and he will be totally fine. So with all this seemingly negative rhetoric on my end, my conclusion is that I'm completely optimistic about his future.
The best advice I can give is find (1) find a company or industry you’re interested in or passionate about; (2) find someone who you have some sort connection with; (3) network hard with that individual(s); (4) be willing to take a slight pay cut… until you prove your worth.
I did the IB to PE to now leading strategy at a well-known company. I’ve found the steps above to be incredibly helpful. Initial pay cut, but my equity (now early thirties) through one exit and nearing a second exit is more than had I stayed in PE this early in my career.
In your case, I often hire other strategy individuals who went through the IB to PE path, not because they know everything about corporate strategy, but because they learn quick, work hard, have a base level of intelligence.
People will be willing to take a bet on you. It will work out.
Hey - mind if I PM you? Also did bulge bracket IB and MM PE and looking to make a move into corporate strategy. For some reason I never hear back when applying to corporate strategy or development roles. Would love to pick your brain and get any advice if possible. Also actively looking if you have any open roles. Thank you in advance for your time!
Sure
Cry me a river buddy. Forget the cash you just got the best business education you could possibly obtain at your age by a country mile. Now use it to either hit the recruitment circuit or go accomplish whatever you’d like to achieve in life. If you don’t know what that is yet then start figuring it out and quit whining on the internet.
I appreciate the response. I agree that I have learned a ton. I have been recruiting for 8 months now and 250+ applications. Are you hiring?
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