Worse than IB?

I see a lot of people comment about PE just being banking 2.0 or whatever, but how many others actually had a significantly worse experience in their PE gig? I'm a year in (MM NYC) and feel like my quality of life is significantly worse than at the one-year mark in banking (and nevermind compared to if I had stayed on as associate).

In terms of work content, I don't think I really find investing any more interesting than banking. Anything can get monotonous when you iterate on 50+ versions of it. I do find the work a bit more challenging, but not exactly in a fulfilling way. Instead of alphabetizing logos or making bar charts, I'm writing some convoluted SUMIFS formula on some data pull or troubleshooting 20 data tables after I've reworked a formula that no longer has X as a simple input. If you ask me which I'd rather be doing at 2AM while counting down hours of sleep, it's the mindless monkey shit for sure.

Hours wise, I really struggle with the lumpiness of deal sprints. Maybe some people prefer it for "visibility," but I think losing like 6-8 weekends in a row is brutal for my mental health, not to mention you could go 10 or 15 weeks sometimes if you're on a particularly shitty deal or back-to-backs. So far, it's felt like I'm on a deal sprint more often than I'm not, so it's been a pretty consistent 80-100 hours a week. And once you have PortCo's at a MM firm, there's no real "non-deal mode" 50-60 hours type stuff. Realistically I definitely had bad and very bad weeks in banking sprinkled in but I wasn't working more than 70-80 regularly.

Culturally, I feel like I'm consistently walking on eggshells. In my banking role, the junior bullpen all hated their jobs, laughed about it, and commiserated. I feel like my current firm doesn't have any room for that since it's heavily career track and everyone views it as their long-term future. I know the saying is to never become friends with coworkers so maybe I'm naive, but I feel my interpersonal relationships in IB were far stronger than now. Talking to anyone above you here is just top tier schmoozing and absolutely ZERO pushback. I imagine IB gets more cutthroat too at the higher levels where promotion becomes tougher, but at least in my group the threshold for promotions seemed relatively attainable without becoming a different person entirely.

Which brings me to - there's a particular intensity to PE that I was ill-prepared for. It feels like you have to care so much more than in IB. This makes sense in that PE work is higher-stakes at an individual level, but it definitely feels like it isn't for everybody. I don't feel like I've ever been a slow worker - quite the opposite even - but it feels like I'm always behind or not hitting the team's expectations. I'm actually not even sure if I'm fucking things up (no one has really indicated as such), or just that they regularly operate at a higher level of micromanagement than I'm used to. Personally, I do truly feel I'm working pretty close to my max capability given my level of give a fuck. Admittedly I've always been going through the motions a bit with work (I don't ever think I can be that guy that throws himself into the job entirely), but where I succeeded in spite of that mentality in IB, it might be causing my downfall in PE.

Maybe I was particularly lucky in banking and somewhat unlucky in PE (which I'm trying to gauge from this question). Banking was tough but I was decently respected and had a manager that at least somewhat tried to reduce weekend work, manage timelines, and stay mildly receptive to feedback / input. I guess also given the constant turnover and average tenure in banking, it became easier to build a reputation over shorter periods (and subsequently get more trust / freedom). It might also be worth mentioning that the general "prestige" of my PE firm is marginally higher than my former bank so maybe that's where I went wrong. Most of my coworkers are from better banking programs, so culture may just be representative of those firms.

Finally, I think I was a bit more tolerant of the BS at 22 than I am at 25. Maybe if I could reset my brain to my fresh college grad self, I could put up with more of the lack of control and respect. I knew I was going back to the bottom of the totem pole, but didn't expect to reset as much on softer skills side. I've tried to look for more objectivity by comparing to my analyst experience given that establishing human capital is natural. But at the same time, you'd want the experience and years to count for something.

Unfortunately I guess there isn't much point to this post, but just curious if others are in the same boat. I do have quite a few friends at other firms who don't seem to be having the same experience. Realistically I know my PE stint will be relatively short, and though banking was somewhat better for me, chances are I move on from the general industry entirely. I guess misery just loves company and I'd feel better knowing it's not just me that got duped into thinking PE was some kind of promised land.I’m

 

Feels kinda relevant to this thread, but FWIW I’ve been evaluating returning back to the sell-side for a couple years now. I miss the reliability & career path of it all; not to mention I didn’t hate the client work - I hated some of the bosses that screamed rapid turnarounds when, now, as a mid-level / early senior, I see how much wiggle room there really is in timeline deliverables. 
 

Not to mention, I have friends who stuck it out and are VP/Directors now from lmm+ banking who have magnitudes more saved up than me & make 2-3x my annual cash comp annually (even in this rougher deal environment). My carry isn’t even real for 5-7 years. And I’ve been at several firms at this point. 
 

I would never join a sweat shop on the sell side, ever, but if there was an interesting role with solid comp & trajectory, that got me home at my current 5-8pm daily timetable outside of sprints….I’d consider it heavily. FWIW, That 5-8pm excludes heavy deal work periods where even if I head home, I’m grinding 70-90 hours a week or more to close.

 

This is a helpful perspective. Also reminded me of another observation I wanted to add and kind of curious as to your take. May be just my subjective experiences but I feel like the mid-levels in PE work harder than in IB.

All based on “deal mode,” but that seems to be more often than not based on the staffing at my firm. I can’t remember any of my sell-side VPs doing much besides delegating/reviewing, leading calls, and making sure processes progressed logistically. They were out of the office by a reasonable time and had some semblance of a life outside of work (gym / significant other / drinking buddies). It was something to aspire to once you put your time in. My VPs now on the buy-side are often online till midnight with bankers / lawyers / consultants, calling in while on vacation, even digging into models to massage numbers and whatnot. Most leave the office quite late and are still ordering seamless alongside the junior bullpen. The few times we’ve gone out to drinks and such, they’ve been there refreshing their emails even more than the associates.

YMMV, but it just feels like there isn’t even light at the end of the tunnel here.

 

I don’t doubt it. There’s got to be a rational explanation right? I’m thinking incentives. Like is the PE midlevel more easily able to connect his effort on a deal to an impact on his future . . eg maybe his path along partner track could turn more meaningfully on a deal getting done and/or the perception of his leadership of that deal. Whereas the banking VP touches a bigger variety and/or doesn’t feel his standing at the firm depends on how much he appears to be on the ball.

To be clear that’s just an illustration of what I mean by incentives, not saying that’s the setup. Just figuring there should be some rational explanation.

 

Very much agreed - I feel quite a bit the same...

My banking experience was good (no crazy bosses or hours), and I left banking as an associate before heading to PE; and my PE experience wasn't bad except for the fact that I had to switch firms due to a rigid MBA requirement (which I didn't feel was additive to my resume/career) - that being said, I do feel that the work is indeed Banking 2.0, and I definitely see that my peers who remained in banking (who are now Directors or even MDs) managed to save up materially more $ than me, 

I think PE is great if you joined the right firm at the right time (and your carry is real), but I like to frame it as a do you wanna hit $10m vs $100m question:

- If you just want to hit $10m, staying in banking (and surviving) is probably the fastest and clearest way to get there (but you won't ever hit $100m)

- If you want to buy a lottery ticket to hit $100m, then you go to PE, but if it doesn't materialize, banking is far better to hit $10m

 

Haha yeah, I mean I’m definitely under no impression that it’s good culture. But at the same time, it’s not a firm that has ever come up with blaring red flags when you ask around in PE, among bankers, some online searches, etc. So I guess in a sense I’m trying to gauge what “normal” really is in the industry when I’ve certainly heard there’s worse out there. Certainly glad to hear you’re presumably having a much better experience.

 

My guess is that all the people who are working so hard have huge amount of carry at stake. You, as a new joiner, do not have carry yet. In the future, when you get carry, you'll become the same as them

 

Haha — as a matter of more or less semantics I do, but your point is taken. Though to me that timeline (~4 years before awards become meaningful, 4 years to vest, potentially few more to realize your first exit while getting locked in deeper every year) looks like far more of a deterrent than a motivation to even get that far in the first place. More power to them.

 

Great post and agree with most of what you wrote.

I also had a worse experience in PE than in banking for many of the reasons you articulated.

I think I had a better than average banking experience and a normal PE experience, and the result was pretty disillusioning.

 

I feel like reading my own thoughts - exactly what I’ve been telling my friends. I was at a mid-tier IB but had a good experience - hours were bad but the people were genuinely caring. I got great deal experiences and was well liked by the seniors. I am now at a MM fund and while life is ok, I feel much less optimistic about the prospect. In banking I had a lot of visibility for promotion (I was told by the seniors that I’m in the pipeline for VP when I was just an analyst) but at my current PE shop, I’m not even sure about promotion to senior associate let alone VP/principals. Nobody above VP leaves the firm (Im pretty sure some want to but they can’t find what they want) and spots are limited by fundraising. Cash comps are lower than banking across levels. Yes we all get carry (associates get a small amount) but a few years before it starts vesting and then a few years till fully vested - so to me the carry doesn’t mean anything when I apply my own discount rate. A principal told me once (when he was tipsy) that he’s been here for 5 years and have not seen a dime of carry.

I think work is still more interesting as I enjoy commercial diligence but most of the time it’s about tweaking the model to do whatever to get a 3x / 25% case and then dealing with portfolio issues later. What I’m not sure about is if it’s just a junior experience and if life feels very different once you become a senior that you will really feel you are driving things / building businesses / partnering with management. If any VP+ has thoughts to share I’d appreciate.. 

 

Long time lurker here but this post really hit home for me. I felt like you were writing my mind!

I also just started an MF assoc role earlier this year and have the exact same feelings. Used to be a top performer at my IB and now I feel like I’m starting from 0 again - and this is making me feel really discouraged. I have gotten lazier (as you have) so I just don’t feel like working as hard as I did anymore. Coupled with the fact that the work here is just so much more intense (in terms of the level of depth of analysis, and also the much lighter guidance you get from your colleagues plus the fact that in the buyside the deal teams are just much leaner so basically you do everything yourself), I just don’t know if I made the right decision in giving up all the good rep (and friendships, in my new role I don’t really have friends in the office) I built with my old bank to come here.

 
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I went through this exact same realization (can check my past posts for reference!) and unfortunately I think this is the norm for a lot of people. If you aren't driven by prestige, money, or a genuine true interest in investing, it's hard to find your PE job fulfilling.

After going through 2 years of BS in banking and convincing yourself PE will be better, finding out you have to have the same level of neuroticism to succeed is a tough reality. Plus, as you note, people care so much more in PE that there is no collective 'this sucks' attitude that breeds camaraderie. Everyone there has a ton of comp at stake or are locked into their carry path. In some ways, they've chosen PE as their life and molded everything else around that, whereas after banking I was ready to not be a 'job guy' anymore.

I was planning on leaving the industry after my associate stint since, despite good reviews, I shared the same attitude you did and felt it would eventually either mean I wouldn't care enough to make it as a VP / above or I'd burnout (likely sooner than the former). Ended up getting a job offer somewhere else and left during my second year. No one understood at the firm why I was leaving PE for a lower paying job in my dream industry with better WLB, but that made me more confident I was making the right choice.

TL;DR: people go into banking for a variety of reasons, but most people in PE are planning on being lifers, so it's hard to go through the motions and that causes people to burnout quite faster than IB

 

I really enjoyed skimming some of your post history, and actually some of your comments I realized I’ve previously upvoted.

Funny too that you went to sports corp dev. I’ve thought about that quite a lot (it’s as much of a “dream job” as there exists while still being relatable to my career), and if an opportunity like that opened up I think it would make the drastic pay cut much more palatable.

Glad to see it’s worked out for you — gives me hope for the light at the end of tunnel.

 

Also enjoy reading your posts rubiomn9!

Hope you do an AmA / Q&A one day. Your story does seem quite interesting and relatable to me (don't work in sports but I relate to your career choices).

 

Adding to the fire. I was an associate a few years ago and felt the exact same way. Unfortunate to hear things haven’t changed much. It’s worth mentioning that PE doesn’t scale with people - it scales with money. Whereas banking scales with people. In other words, there’s much fewer seats as you climb and therefore it’s much more competitive and cutthroat. Imo - banking isn’t much better in culture and, first principles, I wanted to enjoy living everyday instead of just “surviving for maximum ROI”. Left the industry and much happier, making much less ($500K now), and work 4-8 hours a day. Still learning and growing - albeit slower. But I’d be lying if I don’t sometimes wonder if I had “manned it out” and be making millions right now. But I’d rather have a fleeting thought than hating every minute of my life 

 

OP - you are absolutely not alone in your thinking or experience. As others have said, this reads to me as my own personal thoughts and experiences.

I have few years of buyside investing experience (2yrs MM private credit + 2yrs LMM private equity) and started in banking. I started my PE gig after my PC days, and was in a similar boat to you. Pretty well-liked when I left PC, and had an opportunity to stay on long-term and really liked the team. But I wanted to try something new and build my equity chops. I knew I'd be at the bottom of the totem pole and have to grind it out, but didn't realize how oddly intense / stuffy the culture would be. Not in a healthy competitive way, but in a "I could never envision myself becoming my MD / principal / VP" way. I resonate with everything you said above to the tee. 

I've since left after finishing my PE gig, and moved into a different investing role. It's amazing to me how reinvigorated and rejuvenated I feel when working nowadays. I don't regret my PE days, and understand why I had to go through that grind. But understand that things do get better afterwards, if you truly think about what you want to do with your time and effort, and find something that aligns. 

 

So happy that you have found what rejuvenate and energize you!! Could you mind me asking which industry/role are you taking after this? because at this point, I'm just not sure what are the options anymore...Thank you for the insight

 

A little over a year into my PE stint, and the senior associates/VP's grind more than I do... struggle to see myself in their shoes post my associate years, this thread resonates with me big time and is refreshing to hear that this seems to be more the norm than I expected. Planning to stick out at least 2 years as the experience will definitely pay off, but beyond that it's pretty hard for me to commit to.  

 

It’s been great to see all the responses and it’s almost surprising given it’s not a super common discussion. I know many people like myself who left to PE for mistaken reasons, and it would benefit both candidates and firms alike to set the record straight. I’m sure some better self-selection and confirmation bias helps. But also I think some of us are afraid to admit that the perceived endgame isn’t so endgame (sunk costs, etc.)

 

Largely agree with the sentiments expressed here and I think the issue people have (or at least I have) going into this job was that it was a step up and endgame from IB in terms of thoughtfulness of work, comp, responsibilities and skills developed, better WLB (at least marginally), etc. For me anyway, it’s generally been the opposite - pay cut in compensation, worse hours on leaner teams, and generally similar amounts of mind numbing work at banking. It is more critical work generally but instead of building a CIM I’m managing other admin tasks for my portcos or formatting market maps, etc. 

What disillusioned me is seeing how you have to grind even as a mid level and your stress doesn’t go away or magically get fixed, it gets even worse as your rep is based on the deals you close or don’t pursue. Partners may have more free time but they’re still always on calls, managing portcos, etc. 

If you love all that and love the job itself then its a great gig and I don’t want to come off entirely negative as you develop a strong skill set and get to interact with high level executives as a junior. That being said, in order for the math to work out for carry you have to work your way up in often political and poor culture environments, and then stay at a firm long enough to realize that carry (multiple years). If you’re driven by money or love the job, then the cost is worth but if it’s neither like it is for me, makes it easier to walk away. 

 

Very much agree on mind numbing shit. Tbh I may spend more time formatting stuff now than I did in banking.

All absolutely hilarious because 98% of it is strictly internal unless it’s a specific PortCo task or lender stuff. I understand for IC and high stakes deliverables. But I was mindblown the first time I was told “partner wants to see this quick analysis on customers” and it required like 3 turns of formatting nits (number formatting & dollar signs, summation lines vs an indent, adding a line between columns, etc.) I remember in banking even if it was my director, I could just send a raw data Excel or screen grab for something so elementary.

Your last line also resonated. To an extent I’m grateful because prior to PE, I might’ve been one of those who wrongfully stuck around whether it was due to comp or prestige or just inertia. Seeing the reality of this side, at least I’ll feel absolutely confident in my decision to leave.

 

Anyone have a perspective that it’s in fact not worse? Little disheartening to hear as a second year analyst…

 

These points resonate with me, but it feels a bit glass half empty and one-sided. I feel the job is much more rewarding given the increased responsibility (at least at my firm) relative to banking. I certainly have my own frustrations that pertain specifically to my firm, but that will be the case anywhere. At the end of the day, you have to really enjoy the work and the job and see the bigger picture. I didn't have a good idea of what I was getting myself into when I joined, and after a year or so getting the full picture, there are puts and takes. Just like with any career choice, it comes with a set of problems. Whether or not you enjoy solving the set of problems that comes along with a job in PE will determine your attitude towards the job.

 

FWIW, I agree with you. If I loved the job and some of those elements you mentioned, I imagine I'd see the balance too. There's certainly a spectrum, and I happen to be on one end of it.

Original commenter - I definitely never meant this post to be any sort of guide to anyone making a decision or anything. To be clear, I posted mainly because the vast majority of people I know (and certainly on the internet) would agree with picking PE life over IB if asked in a binary question. So I see this and a lot of the responses as a devil's advocate response to a somewhat more "mainstream" opinion.

A lot of my friends joined PE and prefer their current situation over banking. From my view - some are genuinely in great positions and may be in it for the long haul, and some are getting by decently enough to stick around a few years (but don't see a long-term future). There may be some inertia and confirmation bias involved, but I'm actually the only one I know who would say I regret making the jump. So definitely don't think this itself should cause any panic just yet.

That said, not to go all psychologist here, but if you have second thoughts as-is, maybe the real root of those (not so sure about investing, banking job is pretty cushy, only doing PE because everyone is) should be considered. Those can definitely make the flaws of the job more pronounced.

 

And once you have PortCo's at a MM firm, there's no real "non-deal mode" 50-60 hours type stuff. 

Interested to hear what you or other more experienced guys here mean by this. I'm currently at a MM infra fund, 50-60 hours a week so far which tbh is better than I expected, but I'm conscious of the fact that it may just be because the fund has only just begun deploying. 

 

Does infra fund also do the portco management work similar to traditional buyouts? Like value creation stuff (I guess M&A etc?)

 

Well tbh that's kinda why I was asking, to see other people's take since most of the IB/PE people I know from uni/in-person are not in infra.

But well most of the deals we've been looking at are platform deals and infra-as-a-service kind of stuff as opposed to individual assets, so I think so, yeah. For at least one of the platforms we're looking at, synergistic bolt-on acquisitions look to be a big part of growth projections.

 

It's called variability in different teams. You can just be really unlucky after checking for things like what's the senior-junior ratio (the bottleneck is always the senior in PE) before joning.

You need to set boundaries at some point to survive. If you get pushback, it could be that your staffer thinks you're taking way too long, or they're actually unreasonable. You can also set boundaries by pushing back on unnecessarily complicated work or people trying to do next month's work today and that sort of thing.

Try to benchmark and then read the room to find out what your options are. Are you valued enough that they'll cut you some slack? It sounds like your shop is severely understaffed.

 

For sure. The post was just somewhat of a gauge as to just how “unlucky” or uncommon my personal experience is (a little masochistic, a little intellectually curious).

I fully agree on pushing back, it’s great advice for anyone here who hasn’t. Unfortunately I can’t say that’s my issue. For what it’s worth, we have no staffer or oversight to how junior resources are managed (cue the time that I told a deal team I didn’t have capacity for a new project and they basically told me that yes I did). The other big issue with boundaries is that most things are flowing through my senior associates, who all categorically refuse to push back on literally anything (I “get it” given SrAso->VP is the main hurdle for promotion here). The most “give” I’ve ever gotten from a SrAso on a completely unreasonable request from VP is “I’m so mad, I’m going to put that in his annual review.”

In any case, I’m sort of ranting now — tbh it doesn’t really matter who’s “to blame” at this point. My future is already written regardless of the why’s. Very admittedly just seeking some sort of validation or commiseration along the way in case it’s a more common experience than I expected. And if not, oh well I guess I’m due for some bad luck in my life that’s been fairly privileged thus far. Cheers.

 

What aspects of the job (or if it pertained to your shop) made you make this decision?

 

Also, from what I've observed, folks who enjoy their PE associate experiences relative to IB all had trash IB experiences. They needed it to be that bad (from a starting point) to enjoy PE.

If you had a mildly good (or above) banking experience, chances are PE will feel like a downgrade.

 

I made a similar post addressing PE issues recently. See my post here https://www.wallstreetoasis.com/comment/3154943#comment-3154943 (also pasted below). In my experience, your sentiments hit home for the majority of ppl who go the PE route. 
 

PE as a longer-term career is vastly overrated and not a good decision for the long-haul, which shocks many. I do think there is merit in associate years because the learning vs. banking is significant and opens up a lot of doors. The problem is a lot of undergrads and bankers have been gaslighted into thinking that PE is the long-term career path way to go. The following are just a subset of issues that are not discussed often enough about PE:
1) The big $ in PE that pays off vs. other finance paths will not be made unless you stay with a fund for >10 years. This is the case at >90% of funds. IMPORTANT: this requires you find a fund that is tolerable and that you can reasonable stay at for that duration plus one that you play the corporate politics well-enough for the more senior seats. Hint - this is extremely hard to find.
2) The work is mind-numbing after you do your first couple of deals. Once you learn the game, combing the data room and modeling out false precision becomes unbearable. Most folks cannot say they enjoy sourcing with a straight face and view it as a necessary evil.
3) PE is banking 2.0 narrative is absolutely correct. You are trying to do deals and accumulate AUM. Firms will claim they are not and that "trying to stay small" but they are trying to do as many deals that their LPs will allow within their strategy, regardless of forward returns. Don't be fooled. If you want to do investing, go to public markets.

4) It's incredibly hard ex ante to pick which firm you want to be at since you're dealing with very smart folks who all know the right things to say. Weight that against the fact it's hard to get more than 1 solid PE offer and you're left making a less than ideal choice if you want to do PE. Try to speak with former associates/VPs if possible, they are likely the only ppl who will give you a straight answer.
5) Last, reverting to my point #1, if you want this path to make sense, you have to suck it up and deal with all this BS for ten years at the same fund without going crazy and ruining your personal life, knowing that if you decide to leave, it's a negative NPV decision due to the way the carry vesting works.

In summary, the narrative around PE needs to change. This is a mature industry where it's incredibly hard to get 1) a seat at a good fund and 2) a seat that you have staying power at that makes the sacrifices worth it.

 

Great post, and also fully agree with anything I haven't already echoed.

I personally struggled with point 4 a lot. I have always been a decently cynical person and consider myself a decent judge of character with pretty solid "bullshit meter." While recruiting, I really did as much due diligence as I could via bankers, third parties, friends at other firms, people who knew people, and every online source I could find. I spent a few months feeling genuinely upset I had been played, questioning my own judgment, confused at the fact that everyone sold me so damn hard.

I eventually did come to terms with it all. I think ultimately in an investment team of ~30 people, ~10 of them truly like it ("investor" types), ~10 of them are deluding themselves while continuing to chase promotion, and ~10 of them just have to consciously lie because the team is small enough to trace back any bad word. It's a well-guarded setup, and pretty hard to break through unless you're lucky to be dealing with a firm where you have a source. But of course, with on-cycle recruiting you just take whatever offer you get. It's not easy, and the system does set you up to fail.

Definitely ask former employees if you have access to them. I actually started looking up former employees on LinkedIn 6 months into the job, and I regret not doing so much earlier.

 

Agreed - point #4 is the most painful. In banking, there's very much a "going in with eyes wide open" mindset where you know what you are getting into. Some PE firms legitimately gaslight recruits as a strategy to get ppl to take the offer because guess what, 99% of PE firms don't have name-brand recognition and ppl want to buy-in to life being better on the other side of banking.

It's a nasty game but I agree at PE firms incentives are too great to deviate from the firm message. I joke that it is a cult, but it really is. If you dissent or cross someone senior, you could fck up your trajectory at the firm over something petty. Even some FORMER employees don't say it straight since they might have co-invest yet to be vested and the investment world is a very small place.

The PE career path attracts the most risk-averse ppl in the investment landscape. Ask yourself, do they have the balls to tell you straight?

Don't be too hard on yourself. At firm I did associate years, we all felt slighted and pissed off. It happens.

 

1000% resonate with this. Constantly feel like I'm being set up for failure but I'd say the experience varies/comes down to luck especially during on cycle where you probably don't have time to diligence. Some of my buddies have Sr. Associates/VPs willing to help them ramp. In my case, I'm lucky if I get a response to questions over ping and emails.