Why does PE suck so bad?
Came from consulting and I’ve been shocked by how much less enjoyable this job is and how much less happy I am. I genuinely liked my time in consulting and thought my firm did a good job developing us and helping us enjoy our jobs despite the hours. Why have PE funds not figured this out yet? There is so much more money to go around as well. It’s not an hours thing either. I am not unhappy with the hours I work.
PE folks/culture is generally mercenary at the cost of others. I feel the same way coming from banking
I switched from consulting to brand-name MM PE and had the opposite experience. Found the work much more real, and despite a more military, serious, sink or swim culture, think it’s much more engaging / rewarding / challenging. Consulting was like summer camp in retrospect, but I know some people like that.
Ignore title but I completely resonate with the “summer camp” comment. I went from banking to a MF and truly miss those days during banking when there was a whole class of An1s/An2s to grab takeaway with you , or get drunk on Friday night then go back to work together. In PE you just don’t get that anymore as everything is so serious. The most “social” type of interaction I get with colleagues is probably when the big boss cracks a joke during the Monday morning meeting and everybody has to at least crack a smile. I guess I am one of those people who prefers them summer camps lol
It's a combination of (i) business model and (ii) self-section / feedback loop.
Consulting business model - the business model is taking college grads that know nothing and charging them out for thousand of dollars a day. The consultant is literally the product. To grow the consulting business and maximize profitability is a combination of (i) attracting a large volume of talent that meets a sufficient pedigree/intellectual bar, and (ii) retention of that talent (it quite literally costs the firm money to lose a consultant and train a new one). So in this business model - what are the incentives? Well - attracting a pipeline of new talent / retention. And we're talking about thousands of consultants a year across a firm. Therefore, all of the firm incentives / priorities are designed to maximize recruitment / retention. This naturally skews the focus on things like culture, career development, team-events, etc.
Now let's think about the Private Equity business model. Even the largest PE funds have maybe ~100-200 investment professionals at most. That is - PE is highly scalable. The amount of people necessary to work a PE-fund is negligible compared to a Consulting firm. And moreover, with the exception of some partners, most PE professionals are more "cost-centers" than revenue-generators (unlike consultants). Therefore, there is much less natural incentive to develop things like culture, career development because the reality is if one person doesn't work out - you can always replace them quite easily given the high comp levels.
Lastly there is a self selection element. PE attracts two types of people - (i) either those that really love money/prestige and prioritize those above all else, and/or (ii) they genuinely like investing / the nature of the job itself. The type of people who selects into these jobs are by nature more grindy, potentially higher "IQ"(debatable), but also tend to skew more introverted / potentially awkward.
Consulting on the other hand tends to attract more of the extroverts, the people leaders, managers, and the future aspiring CEO's of businesses. Just do a comparison of Fortune 500 CEOs that had an of ex-investment banker / PE investment professional background vs. MBB - it's not even close - not by a long-shot.
At the end of the day to the OP - life is short. You will make enough money (reasonably speaking) in a successful MBB career, as you will in a PE career. Choose the one you are not miserable at most of the time - and if the cultural element is important (and I'd argue that it is almost psychotic to pretend not to care about if you like the people you spend 12-14 hours a day with 5-6 days a week), go do where that one is a better fit.
Lot of comments on consulting I can't relate to at all ... are you at Bain?
Don't want to spoil where I am at but I am pretty sure you might be able to guess it if you are in the industry but nowhere would I say that we have a good / "nice" / summer-camp type (like described above culture).
Also no extroverted people in plain sight - environment is ultra intellectual/nerdy, work super hard don't play at all. People tend to be very much on the akward side.
Sounds like BCG.
It's all relative - what most describe on here in PE is so far beyond any of the differences between each of the MBB's that all of them end up looking pretty similar compared to your average firm in PE. Let me put it this way as a hard data-point - the vast majority of PE funds do not do culture surveys / 360 feedbacks. There are no individuals from HR or the practice tracking your career development / progress within a PE fund. One of the largest public PE firms did not get a real head of HR until 2019.
So do you think PE is less exciting than consulting? I am actually eager to move to the buyside. I hate being an advisory/client bitch. I.e., client says "would be good to also benchmark against [obscure small company in the middle of China]" and partners go like "of course we can! that is a really great point from your side. we will look into it immediately" ... and I as associate will work through the night to scramble some data together.
Or all the powerpoints "please consistency check - numbers for LATAM don't match with what we send out two days ago, please check immediately".
Always thought PE is more about building cool/interesting financial models and working on challenging deals.
It’s more interesting but way more tedious and numbers focused. Hours will be materially worse and instead of a client telling you to Ben ch mark something it’ll be a partner. Same same but different. You’ll spend more time on important things and outsource the rest to consultants / bankers when it’s busy but that means more hours, more stress and your ass is actually on the line. When an advisor fucks something up its expected and not a big deal (or you just don’t hire them again)
My firm hires a mix of consultants and bankers so I've seen this play out a number of times. Generally bankers have gotten straight up abused in banking and consultants were treated like humans. PE skews somewhere in between so it feels worse for consultants and better for bankers.
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