What is the point of IB/PE?
I've seen many threads here about people burning out of IB/PE after 2-4 years and then getting jobs making $120K-150K all in.
If this is true, what's the point of going into finance? I have a friend at a F500 company that has the following compensation structure for new grads:
22: $80,000-90,000
24-25: $100,000-120,000
28-30: $150,000-$180,000
Keep in mind, this is a mediocre company that hires mostly from places like Northeastern, Boston College, Bentley, etc., not the top target Ivies. The top tech companies will likely pay higher than this for business-related roles.
Why bust your ass to go to a top target school, then recruit for a top bank, then grind for years in high finance only to end up in the same spot as someone who was mediocre their whole life (no offense)?
I'm partly in disbelief about the career exits posted here. Surely the average outcome for a 4-year stint in PE is much greater than $150,000, right?
If it isn't, I'm not sure if high finance is worth the hype. Only seems worth it if you grind it out for 10-15+ years and then exit to a C-suite adjacent position. Thoughts?
Bump
Very very few ppl are going the path you are describing. FYI IB street salary for AN1 all in is the same if not higher than the 28-30 salary you are describing. Most stay in finance with salary that is at least 3x the salary you put up at each age range. Even the ones that leave are leaving for things like AI start ups with a higher theoretical upside (who are still paying higher than what you are describing at each age range). The burn out you are describing is quite extreme, very few people reach that level of burn out.
Prospect, this is just flat wrong. Most people leaving IB/PE and not staying within traditional finance are not going to these AI startups. There’s like a hundred of these seats out there at any given time versus the 1000+ applicants
You are comparing a backup option for the IB grad with the upside option for a mid tier school grad
Mediocre? You want to know what's mediocre? Posting an 8% IRR and underperforming the S&P500 working in MF PE. Finance is a parasite on the economy. You extract value from those companies for your income. That's mediocre. And guess what? The game is over! You're going to have a mediocre career at best going forward. Banking was a fucking snooze of a profession and will be once again.
Why are you on a finance site continuing to post the same stuff over and over again if you think finance is stupid?
Dude the moderators need to ban you... Clearly someone who got fired and now has enough time on his hands to comment on every thread spewing bitterness
Keep spreading the message brother. Hopefully our third rate ghastly elites will realize this and turn the US into a production economy before it's too late. Utterly surprised that no other posters pick up what your saying and go straight to the insults.
I like what Peter Stavros is doing at KKR with employee ownership. That's commendable. But as currently configured, PE is "a great vampire squid wrapped around the face of the economy, relentlessly jamming its blood funnel into anything in the small cap universe that smells like money."
Juniors usually exit IB / PE to corporate get a boost on their years of experience. So you make roughly double what the corporate pay-scale you listed for 2-5 years and then are usally a few years ahead of similarly aged peers. That is several hundred thousand dollars you'd have in a bank account which can go to a house, dream car, early retirement, etc. along with better experience under your belt. I think over the next 5-10 years of a career at a corporate finance function, the IB / PE knowledge you picked up could also be much more valuable vs if you had spent your first few years at the same corporate role (you'll have met more people, worked on some interesting deals, have a unique skillset, etc.) that may help you progress even further.
Not to mention that a corporate exit is one of many exits from IB / PE and there are a ton of other opportunities open to you that would be very difficult had you started in a corporate.
65% of my analyst class is in PE or HF or VC and 90% if you include banking (they’re all MDs now). And probabaly the least successful is making half a mil cash and the most successful is a PM at an MM making god knows how much so I’d say it’s pretty clear why
This is not the average class
Probabaly not. It was a “top” group but the fact remains this was the outcome
are you rationalizing not doing IB/PE or what
yes
A lot of misleading replies and false information from people either 1) 10+ years older or 2) those who got lucky on exits outside of PE/HF/AM
Your analysis and conclusions are actually correct. Along with the figures you cited. I’m at 150K all-in with 4 years prior experience (2 IB + 2 PE).
None of these people have done the math anymore. There isn’t enough headcount in high paying corporate exits to make up for the analyst class sizes in IB. For prospects, I would not recommend finance unless you are certain on staying on the IB/PE/HF path. I know that’s a loaded statement because there’s no way you can be “certain” about anything years ahead of time but trying warn you all.
Way too much survivorship bias on this website of people landing these startup 250K all in strat roles out of being an analyst. There are a thousand+ banking analysts across BB, EB and MM programs every year. They are not all landing 200K+ gigs after exiting. The “easy” days of just having decent work ethic and climbing your way up are gone. Never let these older millennial types try to fool you into thinking that they had it tough. I wish I had someone tell me all this when I was in college, so I hope you prospects take this seriously.
So what would you do instead? Every generation so far seems to have just “stumbled” into IB as the go-to job out of undergrad. How has that changed?
If someone is still young/in college? I think medicine is a better path.
What is a better alternative? Two years of IB and 3 years of corporate is a likely a better experience than 5 years of corporate
You're making decent points but I don't think you should be calling people's careers "mediocre". It's just a difference in values, a lot of people rightfully do not want to waste their time in the office. My VP asked to see a deck in the morning so I sent it at 3 AM and he did not look at until 6PM the next day
You're right, it was a little rude. The people I know at F500s are out at 5pm sharp, and seniors never ask for weekend work (or even late Friday work) out of courtesy. I guess if you want a comfortable life, what's the point of grinding in finance when you could coast at $150,000? Not a bad outcome honestly.
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