WORST/UGLY sides of a career in PE???
Hello monkeys, I am a student planning to work in PE in my future years.
I would like to ask to all the professionals in this field (both seniors and Juniors) what are the WORST parts of the job, so why one SHOULDN'T pursue a career in PE (I alr know all the good ones so its quite useless to ask about those).
Just wanted to hear your opinions on the worst part of a career in this indiustry, both in the short and in the long term (not only in megafunds, but also in smaller shops).
Thanks to anyone who will reply to my post!! :)
bump
Based on previous WSO threads, here are some of the worst and ugly sides of a career in Private Equity (PE):
Short-Term Downsides:
Intense Workload:
High Expectations:
Lack of Work-Life Balance:
Long-Term Downsides:
Limited Career Flexibility:
Unhappy Professionals:
Working for Out-of-Touch Partners:
Sustainability Concerns:
Comparison and Regret:
Additional Insights:
Intellectual Fulfillment:
Risk of Burnout:
For more detailed discussions and personal experiences, you can refer to the following WSO threads: - https://www.wallstreetoasis.com/forum/private-equity/working-in-pe-is-h…</a">Working in PE is hell on earth - https://www.wallstreetoasis.com/forum/private-equity/lets-be-honest-abo…</a">Let's be honest about PE - https://www.wallstreetoasis.com/forum/private-equity/for-seniors-who-ha…</a">For seniors who have spent your career in private equity, do you regret it?
These threads provide a comprehensive view of the challenges and downsides of a career in PE from various professionals in the industry.
Sources: Working in PE is hell on earth, For seniors who have spent your career in private equity, do you regret it?, Finance can ruin your career (hot take), Worse than IB?, Why do so many jump to PE?
It’s becoming a corporate job. You go up in the pyramid sucking up and when the time passes by, the quality of your work doesn’t matter that much. You’re disincentivized to act in an entrepreneurial way. IMO this is a result of too much capital in the strategy, which allowed mediocre people and funds to stick around
^^^ This one hits deep, but it’s so true
So true. The more layers get added to these MFs the more it becomes a bureaucratic shithole…
Random list off the top of my head of annoying or unfortunate aspects of the job:
I feel like very little of my work matters and it is starting to look more and more like the work of a F500 FP&A guy but with 3/4x the salary for 2x the hours
I really don’t care that much about my job and am just collecting a payslip until I can think of something better to do
PE without M&A is just being an analytics bitch
Bruh that's literally what you are. Energy modeler, FPA, what ever corporate function that runs on excel LMAO
Great realization bud
Many partners are "house poor". Spend all their cash income on mortgages, private school tuitions, car leases, and travel. Think they are loaded from equity 5-10 years out. Stress about finances on the regular. Fully trapped in the cycle, can't leave because they are in too deep on the expenses.
That’s not a PE issue tho. That’s an issue in any field with high earners.
To some extent but at least in my anecdotal experience it's exaggerated in PE. A lot more tech workers making a lot of money live by more humble means, same with many doctors. You're around money all the time in PE so you spend a lot to keep the image.
Long hours, no boundaries, limited time off that you usually have to work through, extremely hierarchical (even at “flat” funds), horrible pedantic, neurotic, self centered, and transactional people (even if they seem nice or outwardly presentable), no room for self expression, expectation of conformity in attitude, appearance, dress, and interests. There are exceptions to this but you have to get very very lucky to find them.
The job is only worth it if you really really are obsessed with doing deals and love the grind. If you value free time or autonomy at all, this is not the industry to go into long term. Short term there are real rewards from a skills, cash, and branding perspective but even then you have to be extremely committed to doing this job - it’s not something you can dip your toes into and just try out.
how do you feel about travels?
I think one of the dirty little secrets and inconvenient truths about working in PE is that generally speaking you will make less money than you think. There are many exceptions, naturally, but I think there are significantly more people that made less than they imagined vs. the opposite.
Yeah basically that post where a guy was 40 years old and had a NW of $4mm and the whole thread was about where he is vs where he thought he would be.
Do you happen to have a link to that thread?
That was kind of an awesome thread lol hats off to the guy for being open and honest
The worst thing about pe is the people in pe
Do we work at the same shop?
The recession analysis is my favourite. Coming up with a highly contrived end-market index to show that in 2008 this business would have not only survived, but probably even grown!
Fucking bullshit and not surprised a quarter of these jokers haven’t raised in ten years or whatever it is
My sides holy shit. Reminded me of this conversation I had with a VP.
"Associate 2, hypothetically, how would it look if EBITDA dropped 70% over the next 5 years?" "Probably not great."
damn this is a banger.
I would like to change my answer to that - mods pls fix
Now this is PE!
The compensation is high but incredibly illiquid. I know people who are MD/Partner level and have still not realized a liquidity event. They're rich on paper but not in their bank account.
How rich on paper
Does it really matter how rich on paper if it never prints?
This point is underrated
You can easily take out leverage on your carry to “pull forward” a cash realization though (the same as name-that-billionaire taking out a margin loan on their corporate stock)
Problem is that it doesn't increase your cash net worth
How exactly does this work?
You would have to be beyond retarded to do that
.
Some good points above (ton of upfront work for low win rate on deals and actually realizing compensation are two of them for me).
The biggest drawback is that it is an unrelenting 15+ year grind with the reward being that you are thrust into an even more stressful role of being the actual decision maker. You essentially become the CEO's boss for each of your PortCos, and only the most impactful, difficult, and complex problems / decisions which management can't or won't make on their own filter up to you. When you sit back and realize that you are ostensibly responsible for the well being of literally thousands of employees and their families, it can feel heavy. Not to mention managing relationships your lending partners, LPs, and investment committee all of whom you convinced to invest hundreds of millions if not billions of dollars into the company, not to mention managing your own staff.
So yeah, the ultimate job you are actually grinding for is stressful AF.
Lmao I’m staying in IB forever 😂
People / culture / lack of inherent meaning
of all the very true things everyone is saying, I find favoritism and office politics the worst.
Too often, incompetent shitheads are allowed to stick around (and get promoted too). They make the lives of everyone junior to them miserable not even because they can't give guidance, but mostly because they keep failing and have to push the blame on others. So they end up affecting your career too. Despite all the anti-diversity rhetoric, I've found this to mostly be straight men.
This happens in every industry, for sure, but in PE the lag time between job performance and actual results is very long, and the part you play is extremely small and not directly connected to the firm's returns (unless you're a partner / MD). Lots of shit firms just burn and churn the junior guys stuck under a shit VP whose dad happens to be the MD's golf buddy or wtv, especially if they're large enough to weather frequent departures w/o it affecting their recruiting
I did recently have the pleasure of seeing an unpleasant ex employer fuck themselves over with this though: in this bad recruiting market, half the ASO / SnASO pool still left. The bad news is that everyone who left was actually useful and pulling their weight, while the shitty ones stayed, so their capacity is actually down to like 20%, not 50%, of what it used to be. One of the SVPs (who is part of the problem) started crying when the last useful ASO / SnASO quit. Motherf*cker knows that he's got to run his own models now
Seeing your parents get older without being able to spend meaningful time with them.
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