Wtf happens now? What are other VPs doing?
2 years IB, 2 years Mega Cap PE, 3 Years LMM (startup fund, 5 people) - now where do I work?
Have considered every route at this point out of sheer confusion. My current fund is getting deep into platform world as opposed to traditional fund world, and despite the fact that we are small, the 2 guys who run the place will never give up economics. I'm doing analyst through partner level work, without as much upside as them. Our fund returns are mediocre, and I think our next raise will take a long time. Ie - I don't see the upside.
I genuinely love the privilege I have in my job - getting to learn about my industry, meeting really cool mgmt teams / founders, actually helping with deep ops or what's next for their business. I'm not a huge structure nerd but I enjoy the art of the deal. Definitely do not enjoy the legal / tax / admin parts of my job, like anyone else I think...
Do I go back to banking (I was an analyst at an EB where I'd now make ~$600K in cash per year if I went back - no upside, but great cash). More fun in that I can build out coverage / source deals - but more thoughtless / soul-less work after being an investor for a long time. I make less than that now at my LMM.
Do I simply trade and move to another fund? My boss is not generous and getting GP economics out of him more than what I have right now is kind of impossible. Current vintage looks mediocre. I have some traction at various other PE / growth funds - large buyout, MM buyout, smaller growth fund. All of which honestly seem like they are going to have not that much upside.... even the large buyout fund seems like I'd just absolutely slog to hopefully make partner and then collect fees on multiple funds (would be consumer investing, their returns have been okay).
I also considered going to a hedge fund and had offer at multi-managers, but my personality is more working with people rather than wanting to participate in daily market noise / monitor 30 / 40 names and run models for each name.
Is our industry just dead? Especially PE? Is it worth it to look for another startup fund, when it seems like the big platforms are just eating up market share? As we all know, this is now an asset pooling game where the biggest guy wins, as opposed to the smartest or most hard working guy....
I talked to an old mentor of mine who worked at one of the EBs (Lazard - he was a Director at 30) 20 years ago. I'm 30 years old and he assumed I was making "multi-millions' right now, as he was at my age - which is hilarious. When I told him I make ~500k he was shocked.
Maybe I'm crazy but I feel like just leaving it behind to go join a startup or a cool PE platform as chief of staff / ceo-in-training type role, where I'd hopefully have equity that's worth something. I'm thinking of just acquiring some franchised businesses or building out my personal RE portfolio.... I'm now 30 and I'm just not seeing upside in any finance roles (unless I slog it to Partner in Banking / PE)... I'd be genuinely interested in the PE job but I feel like 'investing' has just turned into mindlessly doing deals and a 15 year slog at the mid-levels to hopefully maybe one day make partner where you actually get good economics...
Ai startup go to Mercor and make a toj
Found the Mercor BizOps hire / shill
Sent dm
In a similar boat. Some form of entrepreneurship feels like the only path.
Whats your story / background?
Typical LMM VP story at a sweaty firm. I respect the competence of the Partners I work for, but don't like them on a human level. Looking up and seeing Principals and MDs with families and kids get jerked around, never sleep, and have very limited voice or agency (as very impressive individuals) is pretty depressing. The guys I work for are basically cartoon characters that would perfectly match a disaffected socialist's imagination of what "big bad private equity" looks like. Can't afford another Associate but (only) the top guys have NetJets account. In office 5 days a week but Partners are gone all summer. Unclear if we sold part of the GP.
Starting to think about my life overall and what I want to do with my time.
"This isn't good enough" keeps coming to mind. I keep on thinking of a different life where I own my own business and run it right. Maybe it's not very big, but who cares.
I also keep coming back to the thought that what private equity does is fundamentally unimportant. A construction worker or garbage man provides more value for the world than we do. We work so hard and stress ourselves out so much, for something that doesn't actually matter. At some point, as a man, I want to add value in the real economy.
I've been doing a lot of modeling around how much my net worth will be over the next 10ish years if I stay versus if I start a small business or buy a franchisee.
Next bonus/carry vesting cycle, if I don't get promoted (I'll be due for one), I'm gone.
500k cash for a 5 person LMM startup fund as a VP3 seems like a pretty sweet cash position to be in. Is it just the carry piece or does it feel like structurally you're stuck in your role?
I'm in a similar position, although it's bit of the inverse. Very small fund where cash is very low (low 2's) with heavy deal bonuses and economics. Great in theory but we're getting blasted competitively and have struggled to put capital to work in a meaningful way, which means total comp is in the dumps.
As I've thought about off ramps, I have tended more towards either a Corp Dev or FP&A tracks, with the end goal of each being c suite roles (CDO or CFO).
I personally wouldn't be excited about going back to banking and the slog that comes with it. Certainly great cash opportunity though.
It's not in the cards for me, but if I had other PE opportunities in the LMM/MM space I would probably prioritize those. I think the investing seat is very interesting and I liked the "adversarial" nature of IC (all done the right way!) at my past larger firms that forced you to grow and learn at a quicker pace than the micro teams of the LMM and other start up funds.
Can you elaborate on the learning at larger firms vs smaller ones (your comment on micro teams) - not sure I understand but curious.
Were you at a UMM / MF before? What prompted the move?
I think having the larger networks of people who are looking at the same problems you are and taking different approaches helps you challenge and refine your own approach. Certainly there's a limit to how many viewpoints is helpful, but a good balance I think is a net positive over the smaller teams where there is 1-2 others.
I was at an MM before. Moved for personal/family reasons to a new geography.
I find this really interesting, is this really that common place where the top guys won't share the economics? Seems like such a net negative guaranteed to create churn, ruin culture, and dissuade top performers from staying.. Like all it takes is them to share the economics a little lol and maybe their next fund won't take forever to raise and they'll actually start generating some good returns
Extremely common
Ignore the title I’m a bit more senior than it suggests. Im at a MM/UMM fund depending on how you want to define it, but I was shooting the sht the other day with one my principals and he made the point that at this point in our career if we ever go to a PortCo we would get meaningful MIP. The exact terms and specs obviously vary person to person and level you are at but if you are serious about getting out, I would think about how you can get into a good PortCo and get meaningful MIP. Could be your fund investments, a buddies funds investments or just a random spot (although likely harder to assess). But at this point we have a pretty narrow yet valuable set of skills and if you get out other than moonshot startup (which I have no idea how to determine if it’s real or not), I think the best bet is a company in a space that you believe in and try and hitch your wagon to a winner. At our level you probably won’t get the life changing money right off the bat, but the portco life seems kinda nice if you can hit the right spots (could also miss completely and you take a big initial paycut to do it)
Not sure what your title is (can’t see) but I would strongly argue that unless you are a principal or higher I would not expect to get any really meaningful MIP at a portco. Have several datapoints to confirm this from PE peers jumping to Corp Dev. I think folks in PE think a portco will offer MIP value that aligns with C-Suite Execs because they are in board meetings all the time and view themselves to be at that level. Others may feel they can command MIP value in lines with their carry DAW. PE folks think their skill set is a lot more valuable to a portco than it is perceived to be by CEOs.
Also GPs like to market the people the place at top of portcos as having key experience or functional expertise to sell to LPs/Coinvestors. As an example an ops person from a f500 cpg business for their rollup. I think it's harder than first thought to make that transition.
Also MIP programs are only going to be in the money if you 2x ebitda so it's a hard road to climb and you have single asset risk
Well directors(D/MD) at Lazard probably no longer pull in multi millions
Talk about first world problems. And I thought I was whiny for a rich guy. Jesus bro, woe is you.
Corporate? Doesn't have to be corp dev but strategy, ops, IR, chief of staff, etc
Nihil omnis animi iste repellat. Ea voluptatem et eos saepe consequatur. Fugit dolores veniam hic. Ut et soluta earum. Quisquam nihil et debitis. Excepturi sint facilis qui distinctio aspernatur velit enim. Commodi laudantium illum veniam voluptas voluptas impedit excepturi.
Autem facere quasi quia blanditiis. Et quo omnis amet nemo. Velit voluptatem molestiae porro illo ratione nihil.
Quas sapiente quo officia consectetur totam sint. Ut magnam perspiciatis iusto vero facilis animi et. Ducimus minima vero nostrum sapiente vel maxime dolor. Sit ipsum voluptas sed corporis ut. Suscipit quia deleniti at repellat.
Tempore porro aut excepturi ut earum beatae. Suscipit corrupti iure autem ratione quasi ea. Nulla ut dignissimos laboriosam illo.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...