Thought it might be interesting to hear what folks think LPs envy about what the GP role? Clearly the roles are very different with GPs being at the coal face of sourcing, deal execution, value creation and exit. While LPs are allocating to funds managed by GP based on the LP organization's strategy and possibly co-investing alongside the GP originated deals.
If you feel comfortable then it would help if you can say whether you are writing from an LP perspective or a GP perspective.
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Spent time on both sides for context and I think there’s always a “grass is greener” view. I think LPs largely see the GP role as more “exciting”. They’re the ones doing the deal making, on the phone with executives, flying in PJs from MP to MP. I think they also view the comp as very very rich on the GP side and you can see their heads spinning thinking about the GP carry checks being paid out. Obviously comes at the expense of worse hours and stress though.
How did you like your time on the LP side? From what I have read the WLB is significantly better vs. a comp cut that is not too bad?
WLB is definitely better but co-invest can result in some PE-light hours especially given how fast processes move. Comp discount isn’t too bad at the junior/mid level but really diverges with the carry component.
Did you go GP>LP or the other way around?
I went GP --> LP after getting pretty badly burned out on the direct side.
From your observation, at what level did the stress and WLB get better on the GP side? VP level and up? Or was it common to see them burnt out as well?
It really varies by a GP’s culture and org structure. I would say overall, the hours only get marginally better, but the stress gets higher as you move up. Maybe as a VP you’re logging off 1-2 hours earlier than an associate when not on a live deal but you’re pretty much working the same hours on something live. Throw in portco responsibilities and additional travel (LP meetings, board meetings, marketing) and the hours can get worse at times. At the partner level it can really vary depending on leadership style, but have worked with guys that grind really hard (like shooting off emails at 4am) for someone in their 40s. Not my cup of tea.
I would add that depending on your own preference, GPs get to spend a lot of time going deep into companies and understanding industries. The LP role is quite broad and limited ability to go into depth.
LP here. LPs are jealous of the comp. Even in co-invest roles, the junior people I've worked with have always wanted to end up on the GP side, partially for comp but also because they want to be closer to the companies, deal making, and value creation.
The comp trade-off really depends on how much co-invest you're doing. If you're an LP that does a lot of co-invest, you can absolutely find yourself working 12-16 hour days plus some weekend work and you still make LP money. If you're "lucky" you're getting cut in on the economics, which for co-invest shops are generally 1/10 instead of 2/20. If you're doing mostly fund commitments, you might be working just 40 hours/week and while you won't make nearly the money that people on this forum love to salivate over, you actually get to see what the daylight hours look like outside your office while still getting paid a very livable wage.
Really great summary.
I keep seeing conflicting information on WLB at co-invest funds. Is this 12-16 hours the case across the big asset managers (i.e. Nueman, Pathway, HBV, Adams, Partners, Stepstone) etc.?
And any detail on the scale of the difference of carry once MD at any of these shops vs. a MM GP?
Thanks
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