Markets been super tough - I’m 1.5 years into my 3 year Associate program and still haven’t closed a single deal or add-on and the future continues to look even more bleek. I’m at a top ranked growth shop.
So - See the title. What happens to Associates at good buyout / growth shops that close zero deals? In a perfect world, what’s the best next step if the goal is to stay in an investing seat long term?
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try to BS your way through an interview
To be honest it doesn't look great for you. "Deal QB" experience is so important for the midlevel job that not having true end-to-end M&A reps will almost certainly restrict you from lateral hiring, except for weird situations where you worked with someone directly at the firm who will vouch.
If the issue is structural -- e.g., your fund overinvested in 2021 and is intentionally stretching deployment pace -- I'd say it's better to lateral now than later. No deals 1.5 years in is a lot easier to look past than 3 years in, and the longer you stay the more people will question if you've absorbed too much bad investment judgment.
If it's more idiosyncratic / unlucky (e.g. your group whiffed on a bunch of LOIs, a deal fell apart right before close) stay and keep at it. Going 3 years with nothing closing would be pretty anomalous, and (assuming you're decent/good), you're more likely to get staffed on something at an existing spot where they trust you.
Finally, I'd encourage you to put your hand up about portco M&A just to get some reps in. An add-on definitely =/= a platform, but it's at least a way for you to broaden your exposure and have something to talk about in the future.
How much visibility do you have to promotion? I know it’s rare to get VP with no deals, but have seen it happen when it’s a firmwide issue and they want to retain good folks. Basically I’m asking if you are good at your job and think they’d want to keep you.
If you think yes to above, then I’d stay.
If no to above, AND you really think you guys aren’t gonna deploy in the next year or 2, then lateral now.
For what it’s worth, I think having just 1 closed platform that you can talk endlessly about, and a swath of “LOI” stage deals (which you can make up) is plenty for Associates, though being in Growth the norm is probably a few more.
There is zero visibility and no possibility. Without saying too much I was hired onto a team as part of a strategy that has since been ceased and so I was merged into another team pursuing a different strategy. We're overstaffed relative to deal volume and I'm the last one to eat so to speak. Thoughts?
Honestly, you're fine. Deal flow has been slow, so you're not competing for promos or lateral spots with associates with meaningfully more experience.
I'd stay vocal and hungry, so people think of you when it comes to staffings and trust that your luck will change over the next 18 months (assuming your fund is actively looking to deploy / has funds available / bids reasonable multiples on assets AKA not a systemic firm issue).
They're left on a mountain top and expected to jump to their deaths to remove the burden of their payroll from the fund ecosystem. ~The ciiiiircle of liiiiife~
I would say it’s a bit harder but just have to fluff it up because it’s really not uncommon especially in this market with the slow deal environment in the past 2-3 years.
Also it’s especially not uncommon in large cap / UMM - they do 1-2 deals per year and if you’re 1 of 10+ associates it’s a luck of the draw.
Just have to say how you’ve seen deals to their final stages (just didn’t close it) and got outbid etc. and talk up your experience
What if I'm in a sourcing focused role and not being staffed due to the team being too large relative to deal flow given the market?
If your role is more focused on sourcing than deal execution, that's harder to sell. But if it's really just the matter of not closing deals then I feel like it's not too bad to sell - just need to be able to speak through all the different diligence stages in a process (engaging third-parties, building models, IC decks / presentations, etc.)
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