Will be starting as an associate at a decent shop pretty soon. Thus, wanted to compile advice from the many incredible people on this forum. While retrospective opinions have their own pitfalls (since the process and experience is the key driver of the learning), it still has value.
Thus, what do you wish you knew before you started (or alternatively, if you could time travel back to the start of your PE career, what would you have changed)?
Would appreciate your advice / opinions along any topic whether that's sourcing, execution, the day to day grind, mental health and or anything else important to your journey.
Thanks.
My single best piece of advice would be to put the time in early and be diligent to make a good first impression. The rep on you after your first review will be very hard to change, and the decisions around which associates firms want to keep around or go to bat for are made earlier on than you would think.
What actionable things do you wish you did in hindsight?
Not the other poster but to add on, you should try to be proactive / drive processes forward sooner rather than later. It’s not like banking where as an analyst you wait around for a VP / associate to send you work to do, you need to autonomously own work streams / analysis. As you first start, just over communicate with your team to keep them updated on what you’re doing so they don’t feel like you’re going rogue as you get used to the team’s diligence strategy / priorities, but after a few months they’ll let you run with things more and more on your own
This may be obvious for banking graduates, but I wish I knew that most of the work is not cerebral / intellectually stimulating. Spreading data rooms, coordinating with third parties, etc. is not particularly mentally challenging. Anyone with an IQ > 95 could probably do this job. This was a tough pill to swallow for me since the job is all about identifying, quantifying, assessing the health of (and ultimately valuing) various cash flow items/streams/etc.
Is this the case to your particular strategy / fund do you think?
UMM/MF PE is where I am. I think it is prevalent in my entire space. I think other places might be somewhat more interesting, like the LMM, but I also think there is a whole different set of problems there, so I can't speculate.
Carry will get paid later than you think.
Plus, you’ll have re-invest most of that carry into the next fund.
another big long onebagger ramble comin' right up, all based on my ~3 yrs of PE experience so far. YMMV.
Some general tips I would tell myself 3 years ago:
Be proactive and seek to add value in everything you do. Don't wait to be asked for stuff. Try to come up with proprietary thoughts and analysis. Try to speak up on calls when you have meaningful insight to add. Be visible. But as with all things there's a balance to be struck here so be careful not to go too far with this - IE don't go picking fights/arguments with folks and don't go offering obvious insights.
Work on synthesizing your analysis and distilling it down to 2-3 lines in an e-mail that can go to partners. Make sure your analysis is complete and fulsome but treat e-mails to partner-level folks as if they're going to have 30 seconds to look at it.
Don't be afraid to ask questions - trust in your analysis and skillset. If something looks weird or doesn't make sense, ask about it. Worst case (for you), you just missed something, and you learn from it. It's worth asking about in case its a massive oversight by your PortCo management team that's going to wind up costing another $50m to fix (this actually happened to me within the first 6 months).
Remember that you were hired for a reason. Impostor syndrome is a bitch, especially starting out. You deserve this seat.
Be keen, but don't be clingy.
Communicate effectively and transparently within your firm and within your portfolio company teams.
Make an effort to learn how your firm runs "sniff-tests" and perfect that part of your toolkit. Find ways to fill/kill stuff fast. You can't spend a week on every potential new opportunity that you get shown.
You don't have to become friends, but try to network within the firm with your coworkers and colleagues. You never know who might pass along an opportunity down the road.
Learn the key outputs your seniors like to see from analysis and git gud at building that boilerplate/bolt-on model. Also, your models don't all need to be intricate and beautiful. Don't let perfection be the enemy of good enough.
Be a sponge and take advice / insight from everyone who offers it, but always with salt. Even the 30-y experienced Managing Partners get it wrong sometimes.
Some things I wish I knew:
It is far, far easier to do a new deal than it is to close an old deal. A lot of times, you make your money when you buy. Quality over quantity. Anybody can do deals. Very few can make meaningful, consistent returns in doing so. You will likely look at hundreds of deals over the next few years, and you might only close 1 or 2 of them.
Returns are not always "good". A lot of funds are net-IRR neutral. Even more are negative. There is no such thing as a fund with only winners in it - if there is, it's cause they haven't finished investing yet. There will be bombs in your career, but these are where you learn the most. You learn way more in a bankruptcy process than you do when everything goes smoothly and you exit 2x & 20%+.
Politics are definitely still a massive part of climbing the ladder. I try to stay on the sidelines while keeping an eye on who's making moves and how those moves reverberate throughout the teams as they always do. I have seen very senior people down to associates fired for this.
There are a ton of skeletons in the closet and many old investments lingering around that you'll need to deal with. There was a year where 75%+ of my time was putting out fires that were started by my predecessors. This is firm-dependent and your mileage may vary.
You are effectively still an analyst. You will be spending the bulk of your time turning decks, models, and documents.
Somewhat contradictory to the above, you will have far more independence than you did prior. It's up to you to stay on top of stuff and prioritize your WIP list accordingly. Do NOT sleep on stuff if you can avoid it, unless you are certain it's low-priority.
Your portfolio company teams work for you at the end of the day. Don't be afraid to tell them what to do / ask them for stuff, but be careful not to become a dick.
Not everybody in PE is a god. Most people are completely normal/average at the end of the day.
People make mistakes and nobody is going to remember your latest mistake in a week. Just don't make the same mistake twice. Very early on, I had to eat a math error I made at IC. I legitimately had nightmares about it, but when I asked folks outside the immediate DT about it they had no idea what I was talking about.
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