Why would anyone in their right mind make the switch to PE?

Why would anyone in their right mind switch from BB Analyst --> MF PE Associate? Why not just go A2A? Everyone on this forum talking about how MF PE is 2x worse than IB for work/life balance, similar pay at junior levels, and very little chance of making partner or getting that coveted spot at the top of the PE MF. Seems to me the best route is to become an MD at a BB making $1+ M/Yr by age 32 or so instead of burning out in PE at age 27-28 when you realize you will never make partner.

TLDR: Striving for MD at GS/MS or even top EB > striving for Partner/MD at APO, BX, KKR etc.
Am I missing something?

Comments (11)

Apr 14, 2022 - 3:40pm
kuf135, what's your opinion? Comment below:

I don't know many 32 year old investment banking MD's; either way it's very tough making MD at that age (or any age) unless you're good at the job. Winning advisory business is super competitive, such that to be good at it you really have to like it (because you will be dedicating your life to the craft).

Edit: as the person above alluded to, what do you want to be long term an advisor or an investor?

Apr 14, 2022 - 4:26pm
TMT Demon, what's your opinion? Comment below:

I think I would like to be an investor over an advisor. The only thing that's scaring me are the horror stories from PE people at APO etc that literally hate their life. Just don't know if it's worth it when, yes MD at BB is hard but significantly easier than landing a partner at a PE MF.

  • Associate 2 in PE - Other
Apr 14, 2022 - 3:55pm

You can't assume no one will ever get partner and then say that it's easy to land MD. Both are going to be extremely difficult.

Don't underestimate the carry that you get, even without hitting partner. It can be a large portion or even most of your annual comp in PE.

Apr 14, 2022 - 3:56pm
meep11, what's your opinion? Comment below:

Being an investor is a fundamentally different job than selling advisory services... 

Most Helpful
  • VP in PE - Other
Apr 14, 2022 - 5:28pm

I'd take the opposite view. IB MD has to worry about generating pipeline and closing deals. PE MD has both worries and then performance of portcos with their names on them. I've seen PE MDs scrambling to save their seats after 1-2 bad investments - their stress was far more noticeable than anything I saw in IB. I've excluded fundraising from this given you're including UMM/MFs - at smaller firms where there isn't a well staffed IR function this is an additional headache IB MDs don't have.

  • VP in PE - LBOs
Apr 14, 2022 - 5:55pm

Total earnings potential is much higher at MFs where MDs get upwards of $50mm to >$100mm in carry dollar allocated

Apr 14, 2022 - 6:55pm
TMT Demon, what's your opinion? Comment below:

Very true, but making a partner is so much harder. I've also seen a ton of threads on this site from associates at Apollo hating every aspect of their lives. Someone even said that almost 10% of associates offed themselves where he worked (APO). I don't know if that was an exaggeration, but even so, I don't know why someone would take that much stress and shit for 5+ years for the prospect of maybe maybe making multimillions instead of "mere" millions in IB.

  • Associate 2 in PE - LBOs
Apr 14, 2022 - 5:56pm

Look, they're different jobs, deal cadence as a buyer is different than a seller, different comp trajectories, etc. Neither one is better or worse. Just make a report card of each based on the factors that matter to you, all of which have been discussed ad nauseum in this forum already (my first thought was oh great this thread again) and then pick which one you want. That's it. Search the forum.

  • Associate 3 in IB-M&A
Apr 15, 2022 - 9:50am

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