My experience bridges three worlds: investment banking, private equity, and startup life. Here’s my story, in a nutshell: I graduated from the University of Texas at Austin's Plan II and Business Honors programs and was hired directly out of undergrad to GS. I worked in the firm's Special Situations Group, analyzing private equity and debt opportunities. I closed 11 private equity and debt transactions across a wide range of industries, which accounted for over $600 million of investments. On a day-to-day basis, I managed ~$300 million of assets directly. Since leaving the firm, I founded Nextvest, which offers sophisticated HNW members direct investment access into private equity deals. Nextvest partners closely with a growing number of highly-trained ex-PE professionals who source and negotiate deals as independent sponsors in the lower middle-market (generally, $5-25mm equity check). We run each deal on our platform independently, so our investors have the freedom to choose participation and allocation in each deal. We pool checks together to get our investors the same terms as the big players. Our greatest asset is our advisory team, which includes a former CIO of Citigroup, a founder of the largest PE firm in Asia, partners at the largest US PE funds, and other impressive gray hair. I’m a long-time member of WSO, and I’m grateful to those who have shared their perspectives with me along the way. This is my first Q&A, in hopes of paying it forward. Ask away! [EDIT 3/28 @ 1:45p] FYI, I'll be fairly responsive on this thread throughout the week. No promises after that. [EDIT 4/5 @ 4:54p] I'm a couple days behind replying but expect to catch up in the next day or so. Thanks for the incredible response - I'm planning to keep my responses going through 4/10 as of now. [EDIT 5/2 @ 7:56p] Still occasionally will take a look at this. Feel free to add more comments - timing will be sporadic.
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Thanks! We're entirely self-funded to date. We'll bring on outside funding in the not-too-distant future, but that's a choice, not a requirement.
When working a lot (as many of you know), there's not much time to get around to spending money, and I saved the overwhelming majority of what GS paid me (after-tax, of course).
EXTREMELY hard. Two reasons: (i) starting a business is generally hard; (ii) starting a new type of business with an as-yet unproven business model is even harder. Both of these compound the demands on a skill that junior bankers don't ever use: prioritization. Now, that's overstating the truth, because, yes, things are prioritized (like that slide over this one and that analysis over this one, etc.), BUT rarely if ever does a junior banker have any real question about what to do that day.
Starting a business = a prioritization exercise. There's an infinite amount of possible work to do - figure out what matters.
Hi Powers99,
Thank you for taking the time out to do this AMA. I will be working as a restructuring summer analyst at LAZ/PJT/HL. I am concerned that the restructuring space is not only slow right now, but also might pigeonhole me alot early on. Would you advise me starting off my career in a more versatile group (ie M&A)? To add more color, I am not obsessed with restructuring, but do have interest in the space.
One, there's still plenty of time for things to get exciting for your summer (for better and worse). Two, you'll be a summer analyst. Exactly zero of the deals I worked on my summer moved forward, but I learned a lot, which was my focus. Three, if you decide to continue full-time, there's even MORE time for things to get exciting.
We're not quite "due" for that to happen, but leveraged loans have been pretty boring for a while now and they are not always boring (take a look: here).
To my mind, restructuring is versatile. A lot of finance knowledge boils down to "how do I avoid making this kind of mistake", and you will get to see plenty of dumb things.
I have a limited sense for recruiting paths coming from the role you describe, but there's likely a good story and experience.
Free advice = worth what you've paid for it.
Usually these "AMA's" aren't that interesting, so this is great, thanks for the time.
1) Can you speak a bit more about SSG's role in GS? More specifically, what's the difference between GS's (that I am aware of) 3 PE type funds (i.e. Direct Private Investing, SSG and Principal Strategic Investments)? Also in SSG, as an analyst, did you work on IBD / advisory projects / engagements in addition to investing / lending?
2) Nextvest sounds like a really interesting platform, are you guys - for lack of better term - hiring on the origination side?
Thanks
Simply put, SSG is one of the main branches within Investing and Lending. That is to say, SSG generates profits through successful investments (vs. success fees in IBD or spread-taking in S&T or [something, IDK (nor does Matt Levine to be fair)] in Equity Research).
As you mention, there are a few different principal investing groups within GS. We'll call them: MBD (for Direct Private Investing, because it's actually housed within Merchant Banking), SSG (obvs), and PSI.
For reference, Matt Levine is fantastic, so here's another of his articles for reference on the Volcker Rule, which matters.
[CAVEAT - I DIDN'T ACTUALLY INTERACT WITH OR WORK IN THIS DIVISION SO, ] I know the least about MBD, so let's start there. MBD raises substantial outside capital (well north of $100bn last I checked) into investment vehicles - for one or both of equity and credit investing. GS invests a small percentage of the capital and acts as general partner for these investment funds. For the chart in the Volcker Rule link, MBD is in the bottom part that is green.
I know the second least about PSI. The key word here is STRATEGIC. Let's imagine that you own SuperTech for Finance, Inc. Our imaginary STFI is a financial technology firm that allows you to [store/analyze/process/filter/etc.] [insert financial product or internal process here] information [quickly/reliably/securely/etc.]. Now imagine that you get GS as a client. That's pretty cool. Now, GS sees STFI as a product they'd like to use (as would other banks), so PSI would invest and sign up GS as an anchor client. This is the green box in the top-right corner of the Volcker Rule link. [massively overgeneralized, but the gist is STRATEGIC investments]
Natch, my familiarity with SSG is strongest. It's the on-balance sheet investing arm. Ballpark is low $10bns of AUM. SSG also lands in the top-right corner's green box of Volcker Rule chart. (as an aside, S&T lands in the top left corner's green box) The group can invest ~$25m-1bn per transaction across capital structure and industries. Most deals are on the smaller end of that range. Deals are characterized by industry specialization, deep operational diligence, substantial legal structuring, and (often times) significant complexity.
No. I don't recall any instances but do recall conversation around occasional wall-crossing in both directions (i.e. IBD to discuss with SSG and vice versa). SSG and IBD are run completely separately. Yes - we're always looking to find sharp investors running transactions. Feel free to DM me if interested in discussing further.I think I actually caught up to the questions.