IB (BB) > PE Growth Equity > PE Mega > B School (worth it?)
Posted this on the bschool forum, but thought getting some thoughts here would be good, as well.
Started off at a BB (think GS, MS, UBS, CS, JPM) - 2 years ($70k base, $70k bonus)
Moved to PE Growth Equity (think TCV, TPG Growth, Carlyle Growth, Bain Cap Ventures) - 2 years ($100k base, $100k bonus
Jumped to Mega Fund (think GS PIA, H&F, SLP) ($110k base / $200k bonus)
I added pay for those of you that are interested.
Still an associate at the mega despite being one at the growth equity shop for 2 years. Reaching the point where if I apply bschool in a year then the option will no longer make sense. I would go to school mainly for three reasons... 1) take a break from "work", 2) network, 3) see if there is something out of finance/investing that interests me.
Things I worry about... 1) opportunity cost (will be around $1 million), 2) employment risk (low, but there is some), 3) wasting two years to get back to where i already was (goes to opportunity cost, but not monetary)
It would be great for people to share their thoughts and opinions. I am leaning towards applying to have the option, but am unclear as to what my decision will be.
Other pieces of information:
- I would only apply to H/S/W, maybe columbia
- Went to a tier 2 school UG b-school (i.e., think U Mich, Stern, BC, UVA)
- GPA UG was 3.6 overall, 4.0 finance
- did not take the gmat
thanks in advance.
Personally, at the point of where you stand currently with your experience, it makes no sense to backtrack to get that MBA. If you want to I would do it part-time. The opportunity cost of giving up your job is just too high. I would rather focus my energy at your point on getting the CFA rather than a MBA degree. People use a MBA to network to reach to a Mega PE or change careers, but obviously you are already there. The only other reason to get MBA is if you want to completely get out of investment side and go into something like marketing.
the only that is unclear here is after 2 years at the megafund...will they give you a direct promote with out the MBA...?
also thanks for the comp datapoints.
yes, i should have mentioned that a direct promote is very likely... the hire was made with a long term career track in mind (for both sides of the table). while i am not 100% certain, worst case scenario would be to move to another shop if the promote is not on the table.
Honestly dude, in your shoes, I would just take the money and say screw business school. Business school is not for people like you--you don't need a fancy MBA to show your worth and business acumen. People like me do. I am a military dude with no business training, and without an MBA would be doomed to making 80-120K a year for the rest of my career doing some F500 gig. You already made it to the upside and are making a ton of money at 25--I envy you.
I've struggled with the same thoughts and when you go to the MBA panels you realize that most of the alum want the job or in a job that you already have, you find it hard to justify business school. I think it would be great to network and take a break, but that's 2 years and in probably a less desirable city...
I've given some thought to an executive MBA program. I found Harvard to be extremely rigid in their bschool program (no opportunity to study / work abroad like the Wharton Lauder program)...but yeah too much opportunity cost unless you find a glass ceiling for your career progression and think a MBA would break it.
You can head over to Europe and do one of those 1yr MBA programs. Gives you a nice break/vacation from work, and the brand name would be just as good IMO (assuming you go to something like INSEAD). 1yr better than 2yr for you. Just a suggestion.
I echo what others have said above. Talk to your employers and be open about you have in mind. If you're good (and extrapolating from your career progression, seems like you're doing well for yourself), then maybe they can provide you with 'sabbatical' options etc.
I'd go to HBS if I got in. If I didn't get in there and was in your situation I'd think it was probably not worth the substantial opportunity cost. Certainly if you couldn't get into H/S/W then there's NO reason for you to be bringing yourself down like that (though I'd guess you'll get into one or more if you went to good UG which clearly you did).
Are you parents going to pay? If not, and the opp cost goes up that much more, than I might not even go to HBS... tough decision though, business school sounds like so much fun / such a nice respite
I'd go to HBS if I got in. If I didn't get in there and was in your situation I'd think it was probably not worth the substantial opportunity cost. Certainly if you couldn't get into H/S/W then there's NO reason for you to be bringing yourself down like that (though I'd guess you'll get into one or more if you went to good UG which clearly you did).
Are you parents going to pay? If not, and the opp cost goes up that much more, than I might not even go to HBS... tough decision though, business school sounds like so much fun / such a nice respite
Is that really standard pay at a mega fund? That looks pretty similar to a top ranked associate at a BB. And if you're an analyst promote at a BB you definitely don't have to take a break for business school.
I'm not saying the number is wrong -- just assumed it would have been higher than pay at a BB.
i'd go to MBA....
after 20 years, you will look back at the extra couple hundred k you've made, and regret you did not go have fun
network that you get in school is much more valuable than you think
aim for HBS/stanford
I don't know what everyone keeps saying about so much fun. Everyone that I know that goes/went to top schools says that it is tons of work. Class all day, studying/group projects all night. While a potential nice change of pace from work it's no walk in the park.
There is no way I'd go to bschool if I was in your shoes. Zero percent chance.
If you want to explore other avenues I'd discuss a sabbatical or an extended vacation at some point with your bosses. For example at your review you can say something along the lines of wanting to do a 1 month spanish program in spain, or go volunteer in micro finance for a month in peru, whatever it happens to be but that you are dedicated to the firm but just want to add to your personal development. If they like you and want to keep you they will.
As an anecdote my buddy's brother was in consulting (about 5 years in) and wanted to do a 6 month around the world trip. He told his managers his plan and said that he loved the company and the job but this was just something he needed to do. He said he'd love to come back to the company if they'd take him but he was going nonetheless. They not only agreed but offered him a promotion upon return. My point being is if they want you they will accommodate you.
I'd vote a 1 year program or part time, a traditional 2 year makes no sense unless you feel burned out.
I can only dream of being in your situation, but if I were, I would never take two years out for business school. I think your employers will think you're crazy for leaving, considering how competitive these PE Mega Fund jobs are in the first place.
thanks to all that have posted their thoughts.
hearing what other think certainly helps, and hopefully this post will help someone that is considering something similar.
To respond to IB31, "mega fund" comp can vary. BX, KKR etc can pay closer to 400-500k, but you have to understand how that comp is structured. $300k-$350k for an associate is in line with most firms for cash comp.
the numbers i posted did not have any carry associated with it. I have no idea where carry and matching will shake out. i have yet to be allocated my carry number. matching comp is basically 2x leverage with zero interest and zero downside risk on the levered portion of the coinvest. the cap at the associate level is 1x salary for coinvest.
cheers
A very interesting post, may I ask some side-track questions? I recently started to accept seeing the megafunds you refer to in the 1st post, however in Asia (esp. greater China) they are mainly looking for juniors for their growth capital funds not buyout funds. How's your experience different when in growth fund vs. mega fund?
My 2nd questions is whether you mind explaining a bit more how in general carry works for independent mega funds like KKR, carlyle, TPG vs. bank's funds, i.e. GS PIA, MS, JPM etc, I heard that independent ones pay carry earlier and higher. Appreciate if you could give us some general idea too. Thanks a lot.
Personally think it's not worthwhile going to MBA if I were in your shoes, after 5-6 years' experience. It might not be very appealing sitting everyday among a group of people trying to get into banking or consulting or PE...while you are already in it. No matter which b-school, this seems pretty similar, unless you are also considering something different, like the Kennedy school in Harvard.
If I were you, I would continue working. As someone that worked in a large middle-market private equity firm and now currently at a top 3 MBA, I can tell you that the hiring market is still pretty challenging and it will be tough to give up all of that income to go through the rat race of recruiting again. I am enjoying my business school experience and am personally contemplating either going into business development or investment management since I've realized that I'm more interested in public investing than transactional work. However, if you want to keep doing what you're doing, it will be tough to sacrifice that much opportunity cost to go back to school.
I might say there's an exception for HBS and Stanford, but also remember you will be in school with much younger candidates than yourself that are looking to get into investment banking or consulting...and how would you feel about that? Anyway, I also didn't make as much income as you did, but if I did I would have a hard time justifying going back to business school and now that I'm actually in school, I'd have an even harder time justifying it.
Anyway, this is just one person's opinion but I've been in similar shoes as you so I feel like I can credibly comment on your post (as opposed to providing some random conjecture).
Those numbers dont make sense. You were making 70k base a good 4-6years ago as an IB analyst?
^^$70K base would likely have been his 2nd yr analyst base. The bump up to a $70k base for 1st year analyst across the board was fairly recent (last 1-2 yrs).
correct. 1st year was 60k base + 10k sign; 2nd year was 70k base. washes out, so i did not think it was necessary to explicitly explain. hope that helps.
Sit tight man. If you weren't likely to get a direct promotion and if a career track hadn't been discussed when you joined, then I would say shop around and look to jump to a different PEG and if that didn't pan out, then go back to school.
You are in a great position and unless you are really just looking for a break, business school seems like a huge waste of money and entirely unnecessary at this point. In my mind, it's a safety net that will be there if you ever hit a point in your career that you aren't able to advance. Or maybe you get sick of finance and decide you made a good amount of money and want to open your dream business, exiting to bschool to take advantage of the actual education and the network you get will be tremendous.
I know it isn't a straight forward decision because you are forgoing the potential network you would get in bschool but you are talking about $1mm in opportunity cost just to make yourself unemployed. I just see so little benefit in leaving a great position with great pay and great potential of advancement for such a marginal benefit (and in some ways drawbacks and cost). Good luck.
Regards
IB (BB) > PE Growth Equity > PE Mega > B School (worth it?) (Originally Posted: 10/25/2010)
Started off at a BB (think GS, MS, UBS, CS, JPM) - 2 years ($70k base, $70k bonus) Moved to PE Growth Equity (think TCV, TPG Growth, Carlyle Growth, Bain Cap Ventures) - 2 years ($100k base, $100k bonus Jumped to Mega Fund (think GS PIA, H&F, SLP) ($110k base / $200k bonus)
I added pay for those of you that are interested.
Still an associate at the mega despite being one at the growth equity shop for 2 years. Reaching the point where if I apply bschool in a year then the option will no longer make sense. I would go to school mainly for three reasons... 1) take a break from "work", 2) network, 3) see if there is something out of finance/investing that interests me.
Things I worry about... 1) opportunity cost (will be around $1 million), 2) employment risk (low, but there is some), 3) wasting two years to get back to where i already was (goes to opportunity cost, but not monetary)
It would be great for people to share their thoughts and opinions. I am leaning towards applying to have the option, but am unclear as to what my decision will be.
Other pieces of information: - I would only apply to H/S/W, maybe columbia - Went to a tier 2 school UG b-school (i.e., think U Mich, Stern, BC, UVA) - GPA UG was 3.6 overall, 4.0 finance - did not take the gmat
thanks in advance.
I'm not qualified to advise you, but I'll make a comment anyway.
Do you have periodic reviews? Could you bring up your dilemma during one of these? If I was in your shoes, which I will hopefully one day be, then I'd just ask it outright. Explain your situation and leave the room with a clearer understanding of i) where you can go with your firm; ii) where they'd like you to go.
Your next steps should then be clearer.
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