230-250k; 50 hrs a week; promotion track; MBA? Switch to direct PE?

hi folks,

need your thoughts on the situation im facing.

background: did 3 years of banking, currently at a large pe fof (it's been almost a year)

work in the current gig is ok - some interesting direct deal exposures via co investment (although limited dd as mostly rely on the general partner's memo). pay/hour is great - getting 230-250k all in this year; work about 50 hrs a week.

Dilemma - after a year of the current work, want to switch back to direct investing.

Either i try to find another gig (believe i can still do it now), or i go back to b school. Another option is to stay put (as im already on the promotion track). just that don't want to be stuck in fof forever.

tough part is to give up the great work/life balance and great pay at the current firm. and also convince myself to spend all that money on b school and to face the possibility that post MBA my job won't be as good.

thoughts?

Comments (74)

Jul 12, 2012

Fifty hours a week and a quarter mil? There aren't going to be many places where the grass is greener, so I wouldn't take the risk (not to mention the opportunity cost) of going through the MBA and getting stuck with something that's only marginally better, the same, or worse than what you have now. If you want to get back to direct deals, take your time and look around - you'll have plenty of time working 50 hours a week. I don't think an MBA makes sense for you - don't do it just because you feel like you're supposed to. Weigh the costs and benefits and the answer is a no brainer. Save the MBA for when you're ready to retire. I'm no expert on PE lateral transfers, but that's just my take on it.

Jul 13, 2012

Personally, no way I'd leave that position. Unless you REALLY have your heart set on direct investing as opposed to FoF. A lot of PE shops are still 2 and out, forcing many to go back to b-school. If you're on the promotion track, stay and get a MBA part-time -- I assume you're located in a major city since it's a large fund so there should be a good P-T option.

Jul 14, 2012

thanks a lot guys - makes sense. it's a good life right now but you know how it is you always think about other things. Like what if the longer i do it the more 'stuck' i am in it. esp. since fof skillset is not all that transferable. i was just thinking that as of now, 75% of my WC is still pretty hardcore corp fin/M&A. I do 'direct' deals now its not the same.. i just think im still quite young and don't want to just be so risk-adverse on career options. but yes money is good, and will get better (would say comparable to banking, maybe 10-20% different depends on the year). also job security is stellar.. so for the MBA i was hoping to beef up my creds a bit more and hopefully get into something even better..

Jul 14, 2012

What wrong with you mate ?
Job security + 230k$ + 50hours after 3years, + promotion track how old are you ? 25-26 ?

You won't find a place better than this anytime soon unless you are insanely good or lucky.

Jul 14, 2012

personally i think your current comp is largely irrelevant to this decision.

as far as i can tell, exits from a FoF will be few and far between especially as you get older. you need to decide if you are comfortable doing what your boss (or his boss) does and if you're comfortable with their comp. if not then you should think about the best way to jump to a PE firm.

i don't know your stats but you are probably a good candidate for a top MBA program. that may be the most effective way to make the jump.

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Jul 14, 2012

Doublebottomline yes you are spot on.

Im 27, went to a top 10 undergrad in the us, did 3 years of bb/elite boutique m&a.

Its a good firm but Im not sure if I want my bosses job, that's why I'm having all these doubts.

I think it's 3 options. Try to job to direct side now before it's too late or becomes impossible, or MBA next year then try to get into something better (although I'm not sure if I could find a direct gig that way, even mid market), or just suck it up and stay where I am and try to save up some cash and see what happens.

Actually the most immediate decision is MBA or not, I'm ready to apply this year and took the GMAT already. Its a risk I'm taking with the opportunity cost should I want to go for MBA (I'd be happy with wharton/Sloan/booth)..

It's a tough one man, especially consider that I could prob save close to 1mn in another 4 years without MBA (saved 300k so far)

    • 1
Jul 14, 2012
justanotherday:

Doublebottomline yes you are spot on.

Im 27, went to a top 10 undergrad in the us, did 3 years of bb/elite boutique m&a.

Its a good firm but Im not sure if I want my bosses job, that's why I'm having all these doubts.

I think it's 3 options. Try to job to direct side now before it's too late or becomes impossible, or MBA next year then try to get into something better (although I'm not sure if I could find a direct gig that way, even mid market), or just suck it up and stay where I am and try to save up some cash and see what happens.

Actually the most immediate decision is MBA or not, I'm ready to apply this year and took the GMAT already. Its a risk I'm taking with the opportunity cost should I want to go for MBA (I'd be happy with wharton/Sloan/booth)..

It's a tough one man, especially consider that I could prob save close to 1mn in another 4 years without MBA (saved 300k so far)

i think you should first work the headhunters or your network and see if a move is possible. you will figure out quickly whether it's possible. if it looks very difficult, i would put in apps to top MBA programs in the first round.

your third option of just "seeing what happens" doesn't make sense to me. that's a big risk to take when a) you don't want to be there, and b) it's not an obvious stepping stone to where you want to be.

i know things like b-school cost, opportunity cost, etc. seem important but i don't think these numbers are meaningful when seen as a percentage of your earnings over the next 30 years of a career (especially in a lucrative field).

    • 1
Jul 14, 2012

Like doublebottomline said, I believe a headhunter can be a great resource during this time. I know you don't want to get in pigeon holed in a fof but keep in mind the opp. cost of leaving and going for an MBA. And also, have you tried networking?

Jul 14, 2012

let it ride bro.. let it ride

I'm making it up as I go along.

Jul 16, 2012

great points guys. actually just updated the resume.. networking is a good (and obvious) point. Other thoughts?

Best Response
Jul 16, 2012
justanotherday:

great points guys. actually just updated the resume.. networking is a good (and obvious) point. Other thoughts?

Let me make this as clear as I possibly can:

You have hit the fucking jackpot

You literally need to be insane to want to leave what you have. People in PE would straight up kill for your gig. Yeah, I'm sure the FoF side isn't as "interesting" as the direct investing side, but let's be clear, 50 hours a week for a quarter-million a year at 27 years old is staggering. It's literally a lifestyle job...except you didn't have to bust your ass for 30 years to get it and it pays a mint.

As someone who is finishing up a two year stint in middle market PE, I can say that my job has been interesting probably 50% of the time. It really depends on what you're covering. It can be fun to get in the weeds on a cool company, but it sucks to spend months doing due diligence on a boring ass business. Plus, it's basically always two-to-three years and out to B-School. After B-School, you've basically got to hope you can land a spot at a solid fund and get on the Partner track. Not as easy as it may sound, even with pre-MBA PE experience.

Now, I know you say you've got a bunch of cash saved up, but do you really want to dump a ton of that into b-school? And let me be clear, if you want to do direct PE investing for a career, you almost certainly will have to do B-School.

Why not, instead, keep at your current gig for a few more years, stock away a TON of personal capital, and then put it to work yourself? I mean, if you work 50 hours a week and have half a mil to work with, you can definitely get some legit cash flow investments going on the side. Invest in rental property, buy a gas station, do some real enterprising shit.

You are in a pretty unique position right now and I think you might be best served by trying to make the most of it. Trading the opportunities you have to jump back into the grind seems foolish to me.

Just my thoughts.

    • 4
Mar 6, 2013
TheKing:
justanotherday:

great points guys. actually just updated the resume.. networking is a good (and obvious) point. Other thoughts?

Let me make this as clear as I possibly can:

You have hit the fucking jackpot

You literally need to be insane to want to leave what you have. People in PE would straight up kill for your gig. Yeah, I'm sure the FoF side isn't as "interesting" as the direct investing side, but let's be clear, 50 hours a week for a quarter-million a year at 27 years old is staggering. It's literally a lifestyle job...except you didn't have to bust your ass for 30 years to get it and it pays a mint.

As someone who is finishing up a two year stint in middle market PE, I can say that my job has been interesting probably 50% of the time. It really depends on what you're covering. It can be fun to get in the weeds on a cool company, but it sucks to spend months doing due diligence on a boring ass business. Plus, it's basically always two-to-three years and out to B-School. After B-School, you've basically got to hope you can land a spot at a solid fund and get on the Partner track. Not as easy as it may sound, even with pre-MBA PE experience.

Now, I know you say you've got a bunch of cash saved up, but do you really want to dump a ton of that into b-school? And let me be clear, if you want to do direct PE investing for a career, you almost certainly will have to do B-School.

Why not, instead, keep at your current gig for a few more years, stock away a TON of personal capital, and then put it to work yourself? I mean, if you work 50 hours a week and have half a mil to work with, you can definitely get some legit cash flow investments going on the side. Invest in rental property, buy a gas station, do some real enterprising shit.

You are in a pretty unique position right now and I think you might be best served by trying to make the most of it. Trading the opportunities you have to jump back into the grind seems foolish to me.

Just my thoughts.

Exactly my thoughts. +1

Mar 7, 2013
TheKing:
justanotherday:

great points guys. actually just updated the resume.. networking is a good (and obvious) point. Other thoughts?

Let me make this as clear as I possibly can:

You have hit the fucking jackpot

You literally need to be insane to want to leave what you have. People in PE would straight up kill for your gig. Yeah, I'm sure the FoF side isn't as "interesting" as the direct investing side, [b]but let's be clear, 50 hours a week for a quarter-million a year at 27 years old is staggering. It's literally a lifestyle job...except you didn't have to bust your ass for 30 years to get it and it pays a mint.[/b]

As someone who is finishing up a two year stint in middle market PE, I can say that my job has been interesting probably 50% of the time. It really depends on what you're covering. It can be fun to get in the weeds on a cool company, but it sucks to spend months doing due diligence on a boring ass business. Plus, it's basically always two-to-three years and out to B-School. After B-School, you've basically got to hope you can land a spot at a solid fund and get on the Partner track. Not as easy as it may sound, even with pre-MBA PE experience.

Now, I know you say you've got a bunch of cash saved up, but do you really want to dump a ton of that into b-school? And let me be clear, if you want to do direct PE investing for a career, you almost certainly will have to do B-School.

Why not, instead, keep at your current gig for a few more years, stock away a TON of personal capital, and then put it to work yourself? I mean, if you work 50 hours a week and have half a mil to work with, you can definitely get some legit cash flow investments going on the side. Invest in rental property, buy a gas station, do some real enterprising shit.

You are in a pretty unique position right now and I think you might be best served by trying to make the most of it. Trading the opportunities you have to jump back into the grind seems foolish to me.

Just my thoughts.

It seems that people on this forum have never used a simple tool like this:

money(dot)cnn(dot)com/calculator/pf/cost-of-living/

Trust me! It's an eye opener. Believe it or not, there are industries out there are just as if not more lucrative than finance. There are 20-something year olds from non-target schools that graduated average in their classes that are living lavishly in places outside of Manhattan.

Senior software engineers in the defense sector in the Baltimore, MD area (not even management). The comp is pretty standard across all the defense contractors in the area:

- $140,000-$170,000/year (which is equivalent to $250,000+ in Manhattan)
- 27+ paid vacation days
- 10+ paid military leave days
- differential pay if called to active duty
- 100% reimbursement for language training or certifications related to career field
- 40 hour work week

The sector is also very Reserve friendly. The above numbers don't even take into account the fact that these engineers could be stacking the following on top of their civilian compensation:

- Reserve military pay
- Commissioned officer military retirement (almost 1/2 there)
- Federal education benefits
- State educational benefits
- Extremely low cost insurance (USAA, etc.)
- Access to best health care/insurance available, etc.

Jul 16, 2012

I agree with TheKing.

Jul 18, 2012

thanks guys very much - all make sense. the situation is kinda like dating - you've found a great girl, but the question is - is it the time to 'settle down'?... but yes going back to the 'grind' seems not a great idea at this point.

Jul 18, 2012

I have nothing to contribute other than to say I wish I had this problem.

Here to learn and hopefully pass on some knowledge as well. SB if I helped.

Mar 6, 2013

I very specifically wish I had this problem. Trying to break into PE FoF / FO from IBD right now...would kill for that spot.

Mar 6, 2013

The fact you're even thinking about switching blows my mind

Mar 6, 2013

Since this was bumped... did you end up moving, OP?

Mar 7, 2013

@knivek, did you just make an account on here to post about your defense job on several posts?

Mar 7, 2013

i'm not angry and have nothing to be angry about, just making an observation

Mar 7, 2013

Let's get back on track here...justanotherday where do you work and how do I go about getting an interview at your firm? Also what did you end upd deciding to do?

Mar 7, 2013

this whole cost of living calculation adjustment is a bunch of bs.

sure you can ball out on 100k a year in bumblefuck idaho, but therefore you also are in bumblefuck idaho...

its not like nyc is much higher cost of living vs everywhere else with no upside lol.

also this what % make it calcs are fucking retarded, it depends how good you are and how massive your edge is. there is no average banking analyst class.

Mar 7, 2013

this thread is about a guy deliberating a jump from a fund-of-fund either to direct PE or business school.

wtf is this clown babbling about...deployments? clearances? baltimore? marine engineers? qualcomm?

i don't understand.

Mar 7, 2013
DoubleBottomLine:

this thread is about a guy deliberating a jump from a fund-of-fund either to direct PE or business school.

wtf is this clown babbling about...deployments? clearances? baltimore? marine engineers? qualcomm?

i don't understand.

Seconded.

Mar 7, 2013
NorthSider:
DoubleBottomLine:

this thread is about a guy deliberating a jump from a fund-of-fund either to direct PE or business school.

wtf is this clown babbling about...deployments? clearances? baltimore? marine engineers? qualcomm?

i don't understand.

Seconded.

it's pretty hilarious. look at some of his other posts - they all say the same shit. i honestly can't imagine taking the time to find an engineering forum, create an account, and then post about how my career (that is completely unrelated) is better.

Mar 7, 2013

Sounds like someone who is jealous of his finance friends who make more money than him; or is just insecure as fuck

Mar 8, 2013

Thanks for the bump! :)

    • 1
Mar 8, 2013

lol

Mar 8, 2013

U mad bro?

    • 1
Mar 8, 2013

Trying to picture what kind of military engineer spends his free time writing novels on a finance internet forum.

    • 1
Mar 8, 2013
FranciscoDAnconia:

Trying to picture what kind of military engineer spends his free time writing novels on a finance internet forum.

clearly asserted itself in the apparently meticulously intricate typing which
was simultaneously a long unpunctuated nonsensical run on sentence and yet a
photograph perfectly halftoned into dots shaped as letters of the alphabet
no doubt generated by a cybernetic system that creates fractal branched
sentences which never end but instead sort of parenthesize and go for a ways
and then change course usually by going into detail in a tangential sort of
stackpush that never pops but instead keeps zooming in yet another level
each line or so like an infinite inwards motion that doesn't even need
punctuation and takes the reader on a one-way trip forwards into
progressively refined images much like the incredible shrinking man or
Fantastic Voyage except that it just keeps on going so actually the effect
is more like the colored oilslick breakdowns in 2001 and if you could get
the wave action of the text into just the right peristaltic contractions in
sync with the eye and mind of the audience it could get pretty awesome like
nanotech cities living on the bark of redwood trees in undulating valleys of
forests on nonspherical fiberspace membranes extruded by femtopicotek
nested-space 3.2-dimensional manifolds "bigger at the small end of the
scale" provided you have senses which don't peter out when things get subtle
thus allowing you to encode information in the very borderlines of its very
existence thus relying on the viewer's idiosyncrasies more than on his
common-ness because things which are on the edge of not being there at all
are going to probably excite a set of simultaneous responses which don't
triangulate or intersect or agree or synergize in an unambiguated crisp
singleness and are also somewhat partial and even flickering or dynamic or
changing rapidly with time which requires their mind(s) to choose from a
bifurcating multiplexing divergence of (mildly) resonant rapidly-evolving
attractors forming a ghostly community of evaporatory cooperative "temporary
friends" sharing fleeting memories because a localized continuity of thought
is maintained on more than one level

Mar 8, 2013

Started out as an interesting thread and now my only takeaway is:

knivek = retard

Jul 11, 2013

Had no idea about the digression this tread had since posting exactly 1 year ago and thanks for all the contributions

a lot has happened since a year ago. First of all, i got engaged and am generally living a pretty good life. I have to say that getting engaged changes the state of mind quite a bit - all of a sudden you need to consider your significant other's role in your decision making.

job is going ok, nothing too dramatic. made $225k CY12, a bit less than expectation but hopefully this year will be north of $250k. got a base bump up to $140k

I will apply for MBA this year, and there's a chance that the company will sponsor. I think it'd be a win win if this happens. If not, depends on where i get in, I will decide whether to attend or not. what all of yall said about opp cost totally makes sense. also, there are so many people with MBA's, including some of my close friends. and when you see the sort of job they go into afterwards, sometimes its like why bother.. but one consistent feedback i get is that b school is hella fun

It hasn't been easy to swtich. I've gotten interviews, the closest one was a final round at a billion dollar hedge fund, but the rest hasn't been easy.

Jul 13, 2013

Interesting problem. Sounds similar to my position, except I probably have more flexibility in terms of exit ops.

Let's see. I'm 27. In front office doing deals. Making somewhere between $250k and $350k depending if it's a good year. Work hours of around 45 per week. Sufficient volume of work. Quite flexible hours - can have a long lunch if I wanted or leave early at 4pm if I needed to.

Most important thing is, work gives me flexibility to manage my other interests and I've built up a portfolio of various assets that generate something similar to my salary in terms of income (requires around 2 hours attendance per week, but at my own leisure).

So now I need to work out if I want to stay here for a bit longer and save another mil or so to increase my portfolio; go do something high powered like front office at a top end PE; quit and just play with my assets and keep growing my portfolio and travel the world for life. Something tells me the latter is what I want to do. But the former is sufficiently interesting that I think I have 2-3 more years to give, and maybe I can make a big bang before I exit paid employment.

Jul 13, 2013
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Dec 20, 2013