I was unfortunately part of company wide layoffs at a medium sized debt fund earlier this year. I was working as a senior associate on the team and have 7+ years of experience on the debt originations side. Hadn’t seen many new job opportunities in the market but received an offer this week for a small family owned private equity company (owner/operators). They have historically done deals in the $3M-$30M range and have syndicated most of their previous deals. They were now looking to ramp up an institutional bucket of capital with a few select institutional capital partners and substantially grow AUM targeting opportunistic deals in the MF and retail space. I would be doing everything from underwriting, putting together memos, deal sourcing, running DD, assisting with financing, and some asset management/ budgeting.
The comp was offered was super low IMO - initially sub $100K but was able to negotiate to low $100s. They offered me a discretionary bonus (historically has been $10k-$15k), 1% of the acq. fee (they charge a 1% acq. fee traditionally) on deals I’ve closed, and 1% of the promote (would have to have been at the company still to receive this). I only ever met one of the three partners (which was odd in my opinion) and it seemed sort of low brow deals to me. Market rate for someone with my experience seems to be in the $200K+ (all-in) range in the debt originations world in my specific market.
I didn’t end up taking the offer but now feel some remorse. As rate cuts start up I’m in talks with several debt funds that are looking to hire near EOY. Obviously, not a for sure thing so who knows what will happen. I know I would’ve learned a lot but seems like it would have been a massive step down in pay with no clear path to really see the type of comp I could get in my previous career path unless we started doing some home run deals at a large scale. Still I’m completely torn.
Couple of questions - are you interested in an acquisitions career? If so, this might be enticing…but yeah the pay is very low. What’s the title? What’s the AUM? Size of portfolio
If you’re interested in making more and continuing to work on the debt side, then I’d probably wait to the extent you can.
Also, working at a syndication shop can be tough if you’re also doing AM. For instance, how do they call capital? When did they buy their deals? If they bought a bunch of stuff in the peak, the promote might not be worth much, and deals were much easier to syndicate then vs now. And if they over levered them which many syndicators did to juice returns and minimize upfront capital requirements, those deals might be facing a lot of issues…not saying they did all that just something to consider.
Yes I've always wanted to switch over to a career in acquisitions. The title is Acquisitions Associate. I was told the portfolio is around $500M. They are looking to ramp up deal size and AUM rapidly over the next couple of years. One of the institutional capital partners mentioned is pretty formidable shop that everyone would know of. They would mainly only being doing institutional deals moving forward. They are vertically integrated and have an in-house PM. They have an asset management team as well so I would only really be focusing on yearly budgeting. The promote would only be on a deal by deal basis on of course on the deals I've worked on. They've been around since 2007 but seems like they've really only started getting active in the past five or so years.
Look maybe you wanted to take it now, but seems you'd really be an in house broker for them (getting 1% of acq fee) and realistically may only close 1 to a few deals a year at best.
There are better opportunities out there now and you will find a role at a better shop and long term spot.
Agreed needed to hear that!
If it's a small company but you only met one of the three partners, that's all you needed to know.
You without a doubt made the right call. That would have been a dumpster fire and they were trying to take advantage of you with that comp. You should feel no remorse.
I think you made the right call. Let people show you who they are. Clearly isn't a place you'd stick out long-term, and nothing worse than being stuck at a job you don't like so you aren't labeled a flight risk.
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