Why Mega Funds?
I like everyone else, see the allure of the largest investment corporations in the world and am intrigued. Like many other investment bankers too, the exclusivity of it makes me want it more.
My question is, does it actually do you any favors to be an associate at a BX/KKR/Apollo/Carlyle vs a middle market fund as an associate?
All in comp can’t be THAT different, and no one’s getting carry. Not like any associate will be there that long anyways, chances are they go get their masters and back to another fund.
So what is it?
Prestige - everyone wants to crack stick looking at the logo on their business card.
All else equal, pay is usually better at the MFs at the Associate and VP level with some exceptions. When you get to the VP+ level, it really depends on the economics of the funds and performance, but even then, the MFs pay at the top of the pack unless your MM / UMM fund outperforms (e.g., Veritas, Genstar, pre-2020 Thoma, Francisco, etc.).
It is also true that no one questions your background if you decide to go HF. It’s ridiculous, but people in the industry care about where you worked, where you went to school, etc.
Similar to why BB/EB its the safest route (currently at a MF). Also going into MM/LMM doesn't guarantee a better WLB. I've seen colleagues/buddies that go to MM and get grinded just as hard without the pay nor prestige of a MF.
Also, its easier to go downstream when looking for sr. associate/VP positions
What are your hours looking like
Mostly on the scale and the type of deals you can do. For MF - you can do take privates, which is what a lot of MM don’t have the resource or capability to do.
For LMM/MM - it’s a lot more competitive; deal process is based on door knocking, etc; though returns could be higher.
Ideally there are only a few players in MF but there are so many public assets. In a slow deal flow process like this, P2P are additional leverage MFs get / also some of them can pay higher premium for their asset
Sort of disagree regarding more competitive for LMM/MM - really depends on the asset and sector, but also you have more volume to compensate.
Also sort of disagree with ‘door knocking’. Most processes are banked / auctions.
Leaving the actual job aside and talking more practically from a career planning perspective, it's just more useful to work at a well-known shop. Those firms have the same reputation/notoriety as the largest banks (maybe not amongst main street but amongst people in the white-collar services world). Even a two-year stint at a place like that follows you through your career. Sure if you decide to go downmarket later, no one might care, but if you decide to do anything else in another adjacent industry, people know what it is and it helps. The best example I can give is when I was in college I remember this one guy who people didn't really respect as much as the others in his class as he was a little bit more into having fun. After he got a job at an EB, people started respecting him more. That's not a reason to take a job and I'm not saying that should be a consideration necessarily, however, if you work at a firm that's known to have top talent (whether warranted or not), people will give you more credit than you deserve which is like a warm intro you can parlay into something more. Another example, about a month ago, someone in another group was pitching a VP candidate to my group head they somehow knew. He was kinda nodding along making coffee in the kitchen not really paying attention until the person said they did their 2 years at H&F and he goes "well that's no slouch of a job." The candidate being referenced didn't end up getting the offer but did get a chance to go through the VP interview process. While H&F is a brutal job, there are many MM PE firms out there that are just as sweaty but no one gives those associates the credit for going through that brutality in the same way.
It's not fair but it's how life works. It's like being 6'+ tall as a guy or being naturally good-looking. Life is just a little easier for you. All the other noise people say is just a cope.
Why tf would you go to do masters if you're working in MF PE and then apply for other funds?.. PE is the end goal for many people in high finance. So people view it as a long-term career, and it's easier to attract clients (when you progress in your career) to KKR/Blackstone than to a no-name small fund.
I think the implication was that not a high % of MF PE associates will be given the direct promo and will therefore go for an MBA and recruit into a post-MBA role at another PE fund
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