What careers pay as much as PE?
Considering all options after banking. Something about being a monkey making PowerPoints to sell uninteresting businesses just doesn’t excite me.
I could definitely see how it would be exciting on the investing side; however, I want to consider other options.
The public markets seem exciting but nearly impossible to break into (plus no career stability and I’m no damn quant)
What else is up there in terms of pay and lifestyle?
Probably C-Suite at some mid-large size firm.
The owner of your local / local-regional car dealership, car wash, gym, well-known bakery… etc. etc. Point is a lot small-medium sized local businesses generate a lot of cash in a very tax advantaged way. Problem is you have to risk capital to start one and it’s risky compared to a traditional career path.
Would also like to add savvy real estate investors (also requires a lot of risk).
Bakery? Why not also throw in manicurist and door to door knife salesman?
Want to piggy back on this. Agree with everything here, except you do not necessarily have to start a business - you can buy one and sometimes with very little cash out of pocket.
Example would be my buddy who bought an airplane insurance business. He paid $400k for the business back when he was 25 and the owner financed the business for him. He paid the owner monthly payments for a few years and completely paid it off. The business generates $300k+ for him, and now he pays our buddy $50k/year to run it for him. This manager runs his own insurance business in addition to my buddy’s plane insurance business. Now my buddy who is 31 now has bought a second business which is a cattle feed business that makes $4-500k a year. There was some funny business on the title of the property even though the owner has owned it for 40-50 years, therefore he couldn’t get a loan on it from a bank, so that owner is owner financing it for him as well.
Your buddy's a god. How do you get into this kind of stuff?
Risk adjusted best is PE. Can't replicate $20-30mm a year type comp anywhere else really., other than MF PE. HF guys cap out at like $3mm. Consultants, lawyers, bankers maybe $5-10. Doctors lmao. Maybe LO Equity if you do it for decades you'll make MFPE money, but same goes for PE: if you do it for decades, golden handcuffs + carry grows and grows and grows + you'll be a super sr partner if not managing partner by then. Risk adjusted path to being worth 9 figures, I think MF PE is by far the best and has the greatest viability. If sr partners at APO, KKR, BX, TB whatever are making $20-30+ a year, if you do it for long enough you could hang up the cleats with $100-500mm+. Some of these funds have literally minted billionaires, and yes obviously the economics for a guy joining now vs 20 years ago are gonna be a lot worse, but not THAT much worse. And sure maybe C-Suite positions for regular companies you’ll probably match MF PE but you're competing for literally one of 5 spots in the C-Suite, vs 20-50 partner seats in PE depending on size.
No one is making close to $20-30mm a year in PE aside from *maybe* heads of PE at megafunds and even then I doubt it. Average partner at a MF is pulling in maybe ~$2-3mm of cash a year and then carry is carry - it’ll be worth what its worth. Over a MF partner career, $50mm total is probably in the right ballpark. And that is not guaranteed - my guess is the actual number will be lower from here on out.
Can we have some clarity on this?
Basic carry math. Let's assume someone joined as an associate, stays for 20 years, and has carry in 4 funds.
Fund 1 - Principal / Director level. ~7-10 years in (from associate)
$20bn fund, 1.5x MOIC, 20%, 50bps - $10mm
DAW = $10mm
Fund 2 - New partner level. ~12 years in (from associate)
$22bn fund, 1.5x MOIC, 20%, 100bps - $22mm.
DAW = $32mm
Fund 3 - Mid level partner. ~15 years in (from associate)
$25bn fund, 1.5x MOIC, 20%, 200bps - $50mm.
DAW = $82mm
Fund 4 - Sr Partner. 15+ years in.
$27bn fund, 1.5x MOIC, 20% cut, 350bps - $101mm
DAW = $183mm
This assumes 1.5x MOIC and that in 2042, big MFs are only raising $27bn funds (some are pushing 30 today). Carry bps are standard if not conservative from what I've heard.
So $183mm DAW, taxed at LTCG (thanks to Sienna), still left with let's call it $125mm. Then we have co-invest, and let's say you plow old carry dollars into new funds, so it's compounding and compounding. Then layer on minimal cash comp / whatever equity stake you have in the biz via RSUs by the time you're sr partner.I don't think it's crazy to see $200mm+ net worth here, and a lot higher in an upside case.
And these numbers are completely consistent with the heidrick struggles report
I agree the expectation to make 20-30M a year from PE is absurd, but I know of one guy personally in his mid 40s at a very well known MM PE fund that is making around 40-50MM a year right now. His career path was quite insane though, was an MD in banking at 30 and got poached to make partner at that firm at 32 after helping them with a very hairy deal. Made some crazy deals that he had carry in during the insane bull market of 2010-2020 and is reaping the rewards now, but the guy has been working 80-100hours a week every week for the past 20-25 years. I have yet to understand why people wnat that much money so badly, but anyways ya its possible but unlikely.
"Hedge fund guys cap out at like $3mm"
“Consultants … $5-10mm"
Lmao intern
Yeah maybe if we're talking about the 7 or 8 Tiger Cubs with ridiculous economics, HF guys don't cap out at $3mm. But for the remaining SMs with under 3bn under mgmt have shit economics, bad returns, and greedy founders. Maybe MM is a differnet story but that’s way riskier than MF PE
I never understand why people find it shocking that someone at XYZ capital random HF with $1bn under mgmt makes less than KKR. What do you expect
Lmao I love how dogmatic this guy is with his salary ranges. "Ah yes, I chose to be a consultant and now I expect to make a cool $10mm per year. Too bad if I went into PE I'd be sure to make $30mm guaranteed!"
Kid has never googled “Ray Dalio”
Talking in ultimatums and shit. There are several places in finance where you can make 8 figures. The high level performers will always get high performer pay.
you’re a fucking idiot
can you provide a rough ballpark figure doctors would make in context of the others
https://www.efinancialcareers.com/news/2022/01/goldman-sachs-bonuses
Wow, what a terrible take and analysis. I don’t have much to add other than reiterate what others have said. Not sure if you are in the industry (my bet is no), but the assumptions and numbers are just way off. Mostly just coming here to add another “don’t believe this person” (even with the ridiculous cherry picking you’ve done).
PE is the guaranteed path to ~30MM USD per annum without being an entrepreneur.
Fuck off BBH
You're not going to find anything that is both "easy" (non-quant, non-CS), a stable career, and pays well.
If lifestyle and stability are important, asset management might be worth a look but you'll take a haircut on comp vs PE. Corp dev is also the obvious choice and reasonably balanced between pay/lifestyle
If you want something exciting where you have more responsibilities than just PPT monkey, strategic finance at a startup is an idea. But you will likely make around or under $100k cash (hopefully some equity?) and startups are hardly a safe career bet right now
CorpDev and reasonable pay in the same sentence? What are you, a peasant?
Lol I said reasonable balance between pay and lifestyle... corp dev is hardly more than 9-6 at many places with $200k+ comp, up to 7 figures as a senior in a good sized company. Certainly plenty of banking folk who would take that in a heartbeat.
Was going to second this.
It's like willing to sit on two chairs: you want to avoid being extremely smart (to go the quant path) but make a lot of money at the same time. It's probably becoming more of a luck/being-at-the-right-place-at-the-right-time type of question.
Consulting mid-level MBB partners can make $2-3mm / year if you sling strategy and CDD and senior partners often make $4-5mm / year. That's better than most MM / LMM PE. You get better outcomes with PE firms that are scale with low headcount and non-public (e.g., UMMs) where you have founding teams that have stepped back and the partnership of ~15ish real MDs (ish) split the carry relatively evenly except for maybe CEO + 1 or 2 lieutenants getting a slightly outsized share. First hand knowledge on the UMM point can't really speak to MF like the above. Consulting lifestyle is also significantly better, when I was at Bain I remember the one time I worked on a Saturday and my partner said "Man.... it has been close to a decade since I was on a Saturday call...."
Think this is the most under-rated best kept secret out there.
Senior MBB partners will clear $2-4mm a year, with upside - and unlike PE, that is cold, hard cash. Lifestyle is materially better than the vast majority of PE firms.
Also most importantly - getting to MBB partner is far from guaranteed - but unlike PE where there are maybe a few dozen *max* partners at the largest megafunds, there are thousands of senior partners. If you are smart enough, work hard enough, want it hard enough and have all the skills - chances are good you will make partner. That is not true in PE world.
I know two Big 4 strategy consulting partners in their mid-40s. You’re right, they’re very well-compensated, but I definitely didn’t envy their lifestyles. They’re both constantly on the road and don’t spend much time at home with their families. Personally I would hate spending so much of my time in airports, hotels, and ubers, especially at that age.
Obviously I’m observing a small sample size and I’m not sure if this is true of all consultants.
I don't think your average senior partner is clearing 4-5 million a year at MBB....
I think we are probably thinking of different seniority levels for "senior" partner, then
At McKinsey - “Senior” partners - 5 year earliest after making partner (and can take longer) - are clearing that. Fastest you can get there is mid-30s if you start right out of undergrad and go straight through.
If you want to make real money than you have to take real risks. Essentially create your own business or become part owners owner of one. You have the ability to make way more money than most people will in PE, but your life will probably suck for a while.
entrepreneurship / sales / c-suite. what time horizon are we talking about? how much volatility can u stomach?
Starting your own business. Joining a startup and getting equity. Both of these allow you to do meaningful work at a young age with a ton of upside. Also a ton of downside and can be volatile. Have a few friends at startups that had 10-20m on paper that went away 6 months ago
Don't know why this comment is not the most upvoted.
OP, if what you are asking is "what visible careers pay as much as PE". By visible I mean people actually know how to climb the corporate ladder and what kind of BS you need to take in order to get there. As plenty have said, both IB and PE are low-risk paths towards a very financially-healthy life.
Meanwhile, if you want true wealth, you have to start your own thing. That can be done by starting your own PE fund or HF, your car wash chain, your toy stores (see Pop mart), or whatever, which is very different from working in PE/IB.
Couple of MF folks I know are way less scrappy compared to those from non-elite backgrounds, and a handful of successful entrepreneurs I know/my parents know all come from so-called "non-elite" backgrounds --- non of them went to a top 30 college, worked in IB or anything equivalent, and are not seen as competitive growing up.
As to the comment above, one difficult thing for finance folks with no coding/engineering skills is this: most start-ups nowadays only want SWEs, product managers, and product designers. Maybe a couple of marketing and operations folks, and most IB/PE people either despise doing those jobs or are not technical enough to do the job.
Do you think a CS minor as an academic background still has some merit post-IB? Maybe at the least as credibility that one can do the stuff and just needs to re-learn syntax / study up on new languages. Idk that’s my cope since I still don’t know I want to go the investing route or pivot entirely to PM lol. Might not figure that out until post-IB or post-PE even
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Go be a professional athlete. Tom Brady, Steph Curry and Lebron easily make $90m+ per year. Lifestyle is way better than finance too (see Tristan Thompson lmao)
Or rapper. Get paid to wear designer clothes and eat/drink at fancy venues.
.
Become a commercial pilot. It takes 2 years and costs 100k, but you only work 75 hours a MONTH. The starting salary for a first officer is 100k at the regionals, (such as Envoy airlines) then after 2 years you can become a captain and upgrade to 250k.
After flying as a regional captain for a few years, you can upgrade to a major carrier like American Airlines and be a first officer of wide-body plane and make 300k, and finally after 3-4 years as a first officer once you become captain of a wide body making a max of 425k.
You get 12-15 days off a month, get to travel the entire US then the world. I can’t think of any other job that allows such free time with decent pay! It’s what I’m doing now after quitting Finance.
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