Who becomes VP+ at MF?
It seems that the consensus around the path after getting into MFPE as an associate after your analyst stint at a bank, is that 90% still gets pushed out and will never be a Senior Associate, VP, or Partner.
Then are all VP+ level employees at MFs those 10% that survive? Or are there some other ways that people lateral into these senior roles?
Risk averse people who are good at the job + playing the politics of the fund. A lot of the people who are aren't completely risk-adverse go off on their own to do something else (HF / entrepreneurship/ corporate roles / operating roles / other areas of the private markets etc.) or just start their own firm; the other really good associates who are risk-averse usually stay for as long as they before going to wherever they can.
Name 10 MF associates that started their own firm
Not the guy in question; but there are a ton of MF alum who go to start their own thing (albiet most as princpals or partners not associate). DJ (CEO and Co-Founder) from FP is ex-TPG for example, Thoma Bravo is from Thoma Cressey spinout (which it self from GTCR ), Patient Square is by ex-KKR, AKKR is spun-out of an Accel and KKR partnership, Searchlight founders were all from various MF's, Haveli is by a Vista guy. etc. I am sure there are way more that I am not aware of.
averse...
My guess is the 75th percentile people stay on as VPs (higher if it’s a top firm or awesome trajectory)
Average to below avg get pushed out and top 25th have a crazy opp at top HF/cross over or startup that is worth it
PE is a game of politics esp to get go VP & Partner. There really isn’t differentiation between capable people.
Politics matter, but the real barrier from VP/principal to partner isn’t just office politics - it’s economics.
Promoting someone to partner means giving them a real slice of carry (e.g., from 5% to 15%+) which comes directly out of the existing partners’ pie.
The existing partners only make someone a partner if they can prove that they will grow the overall pie more than enough to offset the dilution (sourcing deals, attracting LPs, etc).
Edit: You can have an emotional response and throw MS but at least try to disagree
You write like an LLM lol
I ended up not getting the VP / Principal promote after really good reviews at all other places I’ve worked. All situations are relatively idiosyncratic and I thought I properly diligenced the opportunity, but things just fell apart in 2nd year (great reviews 1st year) due to a mix of tough staffing, personal situation, and tough PE market. Only one person got the nod out of several folks….not that they were more capable, but largely due to politics and luck of the draw staffings. In hindsight, I dodged a bullet as I moved onto better things, but it sucked as the moment as it was my first real professional setback.
Can I PM you? Curious how you moved to your new position
Used a HH
When you guys say politics.. what exactly do you mean? Ass kissing? Re-phrasing something a senior partner just said so you sound smart? Etc
Nepo, do you have good contacts, are you friends with the right folk, who have you rubbed up the wrong way, how much sway do your seniors have vs some other guys seniors etc
Aligning yourself with senior folks that are willing to be vocal about your performance + getting lucky on important / longer term staffings that require team continuity. This is just a byproduct of who is busy at what times and which deals end up closing….it’s much easier to pass up an Associate on 1-2 portfolio companies without a live ongoing process vs. one on 3-4 while simultaneously running a platform deal / sale process.
Near-term momentum in staffings matter no matter what people tell you to keep you motivated halfway through your program. There is a lot of friction in removing Associates that run the model and have been working hand in hand with portco management teams so senior folks want to minimize that as much as possible. Chances are VPs rarely make it to Partner level so a quick fix / bandaid isn’t all that costly in the grand scheme of things so I realized I shouldn’t take the pass that personally. It’s not a major reflection on my capability as an investor / employee and life just hands you different paths.
There are other roles at these megafunds but the reality is 75% have 2-3 years before doing something else. I have seen a lot more folks return to sellside lately, capital markets, corporate development, we hired an investment associate into IR (she was awful but it was a way to backdoor headcount since investment team was technically paying her comp for the last 6 months which allowed us to justify the need for a seat). People go to business school, I’ve seen principals (albeit with wealthy spouses) just leave the workforce altogether with kids. Lastly, I’ve seen associates lateral as associates and then make VP at another firm where they wouldn’t have made it here. Sometimes it is a cultural thing. I also see so many pedigreed resumes coming from Goldman IB who just fall flat on their face and are awful. Give me the PSDs (although we have one rich kid who kills himself and I don’t understand why - as an associate his watch collection was easily $1M).
Sellside return, tech, other internal moves are all options. I was advised early on that simply “not everyone can be an MD” and I have seen first hand that 80%-90% of people think they are better then they actually are. They complain, they whine about comp or promotions, but their utter lack of self awareness is appalling - same applies, likely at a higher percentage, to the majority of the populace. Hi
Luck and the right senior team has a lot to do with it but there is absolutely a sufficient amount differentiating people to be able to tell who clearly deserves it. Others go out and source deals way earlier than their tenure would suggest growing the pie for everyone which is the best way to get a slice
The 80-90th percentile that's willing to stick around
workaholics that live for PE
I've been through a few IB/PE jobs and honestly speaking the people that stick around beyond VP/Directors are the ones always have a combination of actually liking the job/workaholic personality/good team. Hard to last without this combination of traits imo
I'm an Associate at a MF PE firm.
Everyone I've worked with at the Senior Associate / VP+ level is "deserving" in the sense that they are competent and hard working. Same baseline was certainly not true for many of the mid-levels I worked with in IB.
Problem is that in PE, a lot of juniors pass the "deserving" bar. What ends up pushing certain people over the edge is some combination of luck (staffings that go to IC / turn into deals, working with the right people, etc.) and good positioning. Takes craft to play your cards right, but I've seen a lot of truly excellent people just never really draw the right cards to begin with.
IMO for every class I've known or overlapped with since being hired, my firm has consistently passed over the best / "most deserving" Associates and Sr. Associates for slightly weaker, more political choices. Pretty crushing to watch it happen but seems to be a blessing in disguise for the top performers who are pushed out.
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