WTF happens to VP's and Principals that don't make Partner?
Basically the title. Are things still up or out at that level or can you remain at those mid-levels for the rest of your career? In banking VP's and Directors that don't make the cut wash out eventually, is the same true in PE? Does it vary by shop, size or strategy?
They're thrown into the LP furnace to please the Fee Gods and ensure they are ready for the next fundraise. The ones who make it bake the ashes into a Partner cookie or tart and serve it to the GPs who consume it then bless them to join the upper ranks of Valhalla.
cringe
Know a few principal level people that went down in fund size for a partner seat - pretty common to see MM/newer funds hire principals from bigger funds on a partner track
Yep, this is pretty much it. If you stall out at your current role, there’s no 40 year old virgins in PE. They gently push you out. If you’re eating into the carry pool and you’re not tracking to be a money maker, no sense having you around.
As above poster said, you’ll do fine. You leave Bain Cap and end up at Onex or something to that effect. Or you leave Onex and end up at some other non-descript MM fund.
Everyone I've seen went down-market or to a peer firm, but really it happened on the first go-around, and they hustled and got promoted. Don't wanna know what happens if it happens 2+ times though...
Mostly lateral and end up fine. Also seen a few go to portco roles and one even start a business that became very successful (the dream). At more senior levels, seen guys start funds and be successful (they were pushed out for cultural reasons rather than performance)
excuse my naivete, but what do you mean by cultural reasons?
Either they were an asshole, or they called out their bosses for being assholes.
You get a second chance at another sponsor between the two you can probably ride the gravy train 6-7 years easy and accumulate solid savings/carry. Then go to an lp and keep clipping mid 6 figure checks. Not a bad life
What sort of comp can you expect at an LP for asso/senior asso/vp level?
When you say as an L.P. you mean working at CalPER or Pennsylvania Teachers Pension?
FoFs/Pensions/Family offices
Those are completely different fields. Like saying what’s the compensation in sports (F1 Racing/Lacrosse/Beach Volleyball/Darts).
For the avoidance of double, none of the fields you listed are F1 Racing.
Pension Funds. You’re a public sector employee basically. Your constituents make like $30-70k a year. Save for the top job at few entities the compensation is going to be very lackluster and range bound because 1- your job just isn’t that ‘hard’ in the classical Wall St sense; 2- the politics of paying pension fund employees well look horrible.
Family Office. Prevailing wisdom on FOs is: “if you’ve seen one family office, then you’ve seen one family office”. Each one had a different model. Some are super cushy well paying jobs, some are middle underpaying, some are super autonomous eat what you kill, some are very sleepy and institutional, some consist of entirely outsourcing any investment work and you’re a glorified personal assistant flying to Arizona to make sure the family’s house there is properly stocked before they have a friend of a friend use it.
FoF. Some substantial discount to traditional investment roles. All you’re really doing is researching funds, selecting managers, and reporting the results. You’re an ETF for alternatives. Go look up what the economics are of an ETF.
I'll echo the above. I've seen all sorts of outcomes, but the most common one seems to be to lateral to another firm. Places are generally open. I'm currently helping a couple friends of mine who are VPs find new roles. One of them started looking and had two PE job offers within a month. I personally changed as a Principal, although mine was a big geographic move more than anything else.
Outside of that, it is a mixture of people going to banking, start-ups, other institutional investors, etc. PE really does provide a broad skill set and most folks who make it to VP+ also have great academic credentials. The world really is your oyster. The hardest part is to actually find a role that pays anywhere close to what you were making in PE because those jobs are few and far between. But if you're okay with the pay cut, you will have plenty of options to choose from.
Have you seen PE VP's go back to banking? If so, what was the rationale there
Absolutely happens all the time. Some people are better bankers / like banking more. Not everybody thrives on the pressure of being a principal.
None that I can think of off the top of my head, although there may have been one more senior person I worked with back in 2008 that did this (my memory is a little foggy on the person’s exact background). I’ve seen people return to banking from PE, but only after having worked as PE associates. Once they hit VP, they tend to stay in PE.
Do you see PE VPs move to HFs or LO?
I work at a LO and at my firm and others on the street not really seen any PE VP's transition as where would they come in at? At that point you'll be a senior RA or a PM but they wouldn't have the skillset to do these roles sufficiently so it just wouldn't make sense. I'm guessing SM HF may make some sense but even then your soo senior that I don't even know at that point?
About five years ago I helped an individual who had worked in large cap PE, made it to VP, joined a hedge fund, then decided he wanted to return to PE. He was successful in doing so. Other than him, I have never seen a PE VP go to a hedge fund.
I do know some people who have gone IB —> PE —> MBA —> Hedge Fund though. Basically, the standard PE path that then deviated post-MBA.
first you don't get a pay rise and bonus, then you get counselled out
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