Analyst to Associate - Direct Promotion

How common is it for an analyst to be promoted directly to associate? Why don't people do it more often? Do analysts ever move to another bank, without stopping to get an MBA, and become an associate?

 

If you're sure that you want to stay in banking and the economy is doing well, then it is not difficult at all to get promoted directly to associate. They might even try to convince you to stay. Just imagine: do you prefer someone who has had two years of experience in finance, knows everything in the group, and is very efficient... or would you rather have an MBA who did something completely unrelated and barely understands an excel model?

During economic contractions it is obviously harder but not impossible either. Analysts don't do it because (1) by their second year most of them are sick and tired of working 80+ hrs/wk, (2) they move to the buy side, (3) they move to do corp finance at a Fortune 500, or (4) they go back to business school to either move later to the buy side or a Fortune 500.

 
mrvau:
If you're sure that you want to stay in banking and the economy is doing well, then it is not difficult at all to get promoted directly to associate. They might even try to convince you to stay. Just imagine: do you prefer someone who has had two years of experience in finance, knows everything in the group, and is very efficient... or would you rather have an MBA who did something completely unrelated and barely understands an excel model?

During economic contractions it is obviously harder but not impossible either. Analysts don't do it because (1) by their second year most of them are sick and tired of working 80+ hrs/wk, (2) they move to the buy side, (3) they move to do corp finance at a Fortune 500, or (4) they go back to business school to either move later to the buy side or a Fortune 500.

say you decide you want to stay in banking for the long haul and have the option of either going to business school or staying on for a third year and then being promoted directly to associate.

will bypassing the MBA hurt your chances in the long run for important promotions at your bank b/c the senior people feel more comfortable promoting an MBA?

for example, say you (sans MBA) and another MD (with an MBA) are competing for the group's head position- will the MBA guy have the advantage, ceteris paribus?

 
Affirmative_Action_Walrus:
mrvau:
If you're sure that you want to stay in banking and the economy is doing well, then it is not difficult at all to get promoted directly to associate. They might even try to convince you to stay. Just imagine: do you prefer someone who has had two years of experience in finance, knows everything in the group, and is very efficient... or would you rather have an MBA who did something completely unrelated and barely understands an excel model?

During economic contractions it is obviously harder but not impossible either. Analysts don't do it because (1) by their second year most of them are sick and tired of working 80+ hrs/wk, (2) they move to the buy side, (3) they move to do corp finance at a Fortune 500, or (4) they go back to business school to either move later to the buy side or a Fortune 500.

say you decide you want to stay in banking for the long haul and have the option of either going to business school or staying on for a third year and then being promoted directly to associate.

will bypassing the MBA hurt your chances in the long run for important promotions at your bank b/c the senior people feel more comfortable promoting an MBA?

for example, say you (sans MBA) and another MD (with an MBA) are competing for the group's head position- will the MBA guy have the advantage, ceteris paribus?

Although I obviously can't speak from experience, from what I observed last summer once you're in everthing becomes meritocratic. Your MBA is just your pass to get INTO the job. Once you're there nobody cares as long as you make money for the team and the company. If you made it to MD without an MBA it's because you're just as good as an MD with an MBA. Whether you become the group's head will depend on who is better, who has the best skills, the best contacts, the most experience. Now, in the hypothetical case that two MDs are exactly the same and the only difference is that one has an MBA... well, I don't know... I think the "hypothetical" case is just too hypothetical. 'Political campaigning' within the company may play an important role as well and may be the decisive factor (and weigh perhaps more than whether or not one has an MBA and the other doesn't).

 

The poster above is correct to some extent. The MBA does confer some advantages in terms of credibility as well as well-roundedness. Career bankers who made the A2A promote tend to have a more narrow perspective and encounter difficulty transitioning into a client-facing role after being an excel monkey for 6 years. There is also the issue of having a more limited network.

All else being equal, there is not a huge difference between those that have a MBA and those without. However, practically speaking, most would be better off getting it.

 

Because after 2-3 years of 100-120 hours/week, most analysts, if not all, wants to take a break(MBA) or get out. And I've never heard of MD without MBA getting paid less than who does, although they'll never tell. However I've heard of women getting paid less than men sometimes.

 

I think the reason you don't hear about it more is bc most of this site is focused on getting to PE. Most of my BB interviewers were associates who were previously analysts (many had done the third yr as an analyst then became an associate).

 

The A2A promotion is actually pretty rare. Some banks offer an easier transistion, namely Wells/Wachovia, CS, DB, even UBS. Even so, most banks/groups will require you to be a 3rd year analyst, and then become an associate. Trust me, I left banking after 13 months...it is very easy to get burnt out if you work 100 hour weeks.

 
MoneyKingdom:
The A2A promotion is actually pretty rare. Some banks offer an easier transistion, namely Wells/Wachovia, CS, DB, even UBS. Even so, most banks/groups will require you to be a 3rd year analyst, and then become an associate. Trust me, I left banking after 13 months...it is very easy to get burnt out if you work 100 hour weeks.

by the way, how's the new job going?

------------ I'm making it up as I go along.
 

Work is going good. PE is much different than banking, but in a good and bad way. I actually prefer the work in banking, compared to the work in PE, however, the lifestyle is much better. I make it a point to take off either Saturday or Sunday, so I generally work about 6 days a week, around 70 hours a week, compared to 90-100 in banking. Also, the workload is generally more predictable than banking, which is much nicer. I have actually gotten a chance to get to know NY (shame considering I have lived here for a year and a half).

 

if the grass is greener on the other side (ex. PE), why doesn't everyone just leave after their analyst stint?

========================================= We are excited to formally extend to you an offer to join Bank of Ameria
 
futuretrader1999:

has anyone ever heard about someone getting into the associate program (but then taking 2 yrs off to get MBA) and then coming back after u get it?

Yes, but usually they upgrade firms or groups. Very rare to find someone return to same group at same bank as an associate after MBA, unless they didn't have the option for A to A

 
JustADude:

Well if you're at GHL, then analyst -- > associate is not even an option

What is your source for this?

According to their website, http://www.greenhill.com/?option=com_content&task=view&id=96&Itemid=222

"The full-time program requires a two year commitment and strong performers are offered the opportunity to remain with the Firm as a third year Analyst. Exceptional performers may be offered a direct promotion to Associate after three years as an Analyst."

 
Deo et Patriae:
JustADude:

Well if you're at GHL, then analyst -- > associate is not even an option

What is your source for this?

According to their website, http://www.greenhill.com/?option=com_content&task=...

"The full-time program requires a two year commitment and strong performers are offered the opportunity to remain with the Firm as a third year Analyst. Exceptional performers may be offered a direct promotion to Associate after three years as an Analyst."

Have friends that work there, as of last year the 3rd year offer rate has always been 0, it just doesn't happen. Maybe they just changed it.

 

No personal experience but 100% of the associates at my shop are direct promotes. Seems like a decent gig. when things are slow, most work 50-60 hours/week, and we pay analyst/associates above street (afterwards, its more dependent on personal/firm performance).

I think its dependent on the shop, there are a few places I wouldn't take jobs from unless they let me skip a year or 2 in terms of progression due to reduced job security/increased facetime. Alternatively, if you like where you work and have the option to stay, it may be as good an alternative unless you're dying to do PE.

 

MO and BO titles are different, for example, I have a friend who graduated in '08 and works in risk at a large bank. She's already a Jr. VP or some such title less than 36 months into the job.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

MD is a different story altogether. In IBD (BB), analyst to associate is standardized at either 2 or 3 years, but afterward is based far more off of merit/office politics and there's less rigidity. Moving Associate > VP > MD by 28 would happen if you're a rainmaker.

S&T is far less rigid, there was a guy posting on here a month or two back about moving to Associate in less than a year. You'll rise through the ranks there as quickly as you deserve.

I am permanently behind on PMs, it's not personal.
 

Out of curiosity what year analyst are you and do you think that A2A is a sure shot for you if you go for it? I've heard at different banks/groups it can range from almost impossible even if you want it to incredibly easy as long as you're average/above average and indicate you want it.

 

I'm a second year but got ranked in top quartile of firm and have very positive reviews / relationships, so would say it is. Have also been approached by other banks to come over and do a 3rd year there with acknowledgement that if I perform well, there is an mutual option for Associate promotion.

 

I would think they intend on promoting you if they hired you as a 3rd year analyst. Wasn't that one of the questions you asked during your interviews - I sure would have wanted to know that.

But yes, generally you need some goodwill and some firm support to get the associate offer, but it would be odd for them to just hire you for one year, or at least expect you to be a third year analyst for two years..., especially at smaller banks

 
dayaaam:
I would think they intend on promoting you if they hired you as a 3rd year analyst. Wasn't that one of the questions you asked during your interviews - I sure would have wanted to know that.

But yes, generally you need some goodwill and some firm support to get the associate offer, but it would be odd for them to just hire you for one year, or at least expect you to be a third year analyst for two years..., especially at smaller banks

you seem to be softly supportive of the idea that it is tough to be directly promoted to associate whilst there are other analysts battling to become associate for 3 yrs minimum. What are usually the promotion rates at a bulge bracket bank? 2/3?

 

Typically you find out around the same time as senior level bonuses are paid out, eg Feb/Mar. This is to give you enough time to find a job should you not get the position. They generally begin discussions with you as to your interest after you get paid your first bonus (July), then come Nov/Dec they start deciding whether or not its a good idea by talking to you more.

Sometimes they pay out the full associate sign-on bonus, but not always (varies by firm).

You will get the bonus in July plus the bump then the stub regardless

It used to be the case that star analysts could get promoted after 2 years. However, recently many banks have taken the stance that they will not make exceptions to the analyst promotion schedule. I ran head first into this one with my group head, the head of lev fin, and a bunch of other people up the line asking for them to do it only to be shot down by the CFO.

BrokenIncome:
When do 2nd/3rd year analysts typically find out if they are promoted?

Also, do you still get the full associate signing bonus?

That would mean a 2nd/3rd year bonus in July + signing bonus (when?) + bump to $95/100k salary and then a stub bonus paid out in January, correct?

--There are stupid questions, so think first.
 

The schedule may be slightly different at every bank. During your first full year formal review (when you are given numbers) is when I was extended my third year offer. Associate offers were extended the same time the following year. Soft offer deadlines were in October, hard deadlines in November.

I only know one person to get promoted early to associate.

 

moved to the two year promote (first time in a decade) and 3rd year analyst-2nd year associate promote in IBD (for the best analysts) last year to try to keep people at the firm. It didn't work that well last spring (most star 1st years just passed and took their PE/HF jobs), not even sure if they are offering it this year given conditions.

 

generally speaking, the asociate stint lasts 3 or 4 years. If you are an Associate for 5 years, then something is wrong. Usually you are associate 3 years before you become VP.

 

All of the major us banks will do direct analyst to associate promote. The program across the board is 2 year analyst stint with an option for a 3rd at both parties discretion. Then they either offer you an associate promote or not. You have conversations with your bosses far before they will offer either the extension or the associate offer.

For awhile, it tended to be rare for two reasons, the good analysts had exit options and they didn't like the bad analysts.

--There are stupid questions, so think first.
 

i've herd that 10% number thrown around for BBs but i think it is highly misleading. you have to think that the top analysts will go onto PE/HF and other really good analysts that don't get into PE/HF would much rather go onto another role (corp development, etc.) rather than think of staying to do banking for another few years. it definitely takes a special kind of person to even want to go straight through from analyst to associate. sorry i couldn't shed any light on the boutiques, but i kno it's not incredibly difficult to do even at BBs if you are motivated, good at your job, and still have a high interest in ibanking

 

Im starting work as an analyst next July and after 3 years as an analyst the firm makes me leave or go to business school (which they'll pay for, thank god) then its a 2 year binding employment as an associate. They've said that its very rare in the firm for the direct transition to happen.

 

HokieAnalyst-what bank do you work for? Is it a normal occurance for firms to pay for your MBA?

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-
 

After my third-year analyst stint, I took a job as an associate at a different firm. At the time they said only the top 10% of analysts were promoted to associates, so it was a major coup. However, it was a very different job. Instead of being told to do things, you were told to manage people and processes, including analysts, MDs and clients. I could do very well all of the analyst tasks, but after being promoted I had to do all of that as well as a whole suite of other tasks. It took me less than a year to decide I needed an MBA to be good associate and above. I've now done that and an back in the game. It is shocking how much better able I am now to cope with challenges after my MBA. I generally think analysts should go back for their MBA, not because they can't be associates without it, but because they will be better associates with it.

 

Holymonkey: The firm im working for has a analyst merit type program. If you show you know what you're doing and are smart, the firm will send you to one of the top 10 business schools. They do this to keep the good analysts in the business and promote them to associate for a minimum of two years after grad school. After this summer, when offering me the full time job the MD in my division said that this would probably be the case for me if I did as well as I did over the summer. Whether I'm recommended or not is to be seen at the end of my analyst stint.

So to sum it up, if you do well in your 3 year tenure as an analyst, you get a nice year end bonus as well as a free top-10 MBA. However, not all analysts are recommended as it is the decision of the MDs.

 

Are you asking about the scenario where you are promoted to Associate, then stay for 1-2 years in that role, and then decide to go to business school? (I think this is what you mean).

If you go that route you will be in an awkward and uncommon situation because you won't be an entry-level Associate but you won't have the experience to be a VP either. I actually don't even know how/where banks would place you in this situation - you might just be a Senior Associate as you suggested.

Bottom line is if you want to go to business school, do it between Analyst and Associate... no reason to be an Associate for a few years and then go.

People who have done banking since they graduated will be VPs by age 29, so you'll be behind as well.

 

At 29 yes there will be people who are VPs at that point. That being said, it is not impossible to bypass some of the process. But why not go to B-school in 1-2 years that is the best time to go in my opinion. Then come back as an associate, or better yet make the jump to a good pe/hf shop. With the 1-2years of analyst work you should be a good candidate for those positions. I am a big supporter of getting your MBA sooner rather than later.

 

If you're directly promoted to associate post-analyst and you want to remain in banking long-term, there is no reason for you to get your MBA. There's no point in getting an MBA as an associate and then returning to banking after the MBA, as the MBA is what most analysts use to get to the associate position in the first place.

 

Thanks for making my question clear. Sorry guys about the grammar. Currently working late and posting questions.

I am trying to add more Ibanking Experience on my resume before I go Bschool. If I am promoted to Associate. I plan to do 2 years of being associate. This would give me more time to get in to deal details. As I told you, I am going to be hired as an experience candidate. But folks at the firm do get promoted to associate from Analyst.

I am currently 25. I was hired in to the bank not from College. Do you feel I will be too old to be a VP at the age of 29-31?

 

i dont think age matters that much man (woman). I have seen 35 yr old associates. You'd still make much much more dough than any normal corporate carrer at age 29. Even if you make VP by 31, you would probably make MD by the time you are 40. Is that that bad? Pulling over a million a year by age 38-40 would seem ridiculous in most professions. Look at management consultantancy, which is def one of the most prestigious jobs in the US, they make peanuts compared to bankers (note-source:others in this forum).

I know money is not the end all and be all, but I think its a good parameter to put things into perspective a little bit.

even if you have to RESTART your associate stint post business school (unlikely I think), won't you rather work these two extra years now and get a Harvard MBA that will stay with you for the rest of your life? What if in business school you discover a completely new path like may be venture capital or doing something on your own...are you willing to bet losing out those revelations and opportunities for a lousy year or two here and there?

Sorry for the rambling, the rain is making me philosophical...

 

You are double-counting the 3rd year analyst bonus with the stub year bonus. You need to pro-rate the 3rd year analyst bonus. But the figure, surprisingly isn't too far off. In that A-to-A year, you will see something more in the range of $225,000 to $250,000. In an associate's first full-year, all-in comp ranges from $275,000 to $325,000 based on the figures I have seen.

Check out - http://www.wallstreetcomps.com/index.asp That resource shows you compensation ranges for associates and above.

 

Not sure how in double counting the 3rd year bonus and the stub. As a 3rd year you will get 100k top for the past years worth of performance since you don't get bumped to associate until the end of your third analyst year (ie July 2012). When you receive this bonus you will get jumped bumped up to associate 0 salary. A few monts later you get a stub bonus for ~6 months of work, which is separate from the analyst bonus. So therefore I get 275-315k. Only variable here is the 40k sign-on bonus that all new associates get.

 
The Birdman:
Not sure how in double counting the 3rd year bonus and the stub. As a 3rd year you will get 100k top for the past years worth of performance since you don't get bumped to associate until the end of your third analyst year (ie July 2012). When you receive this bonus you will get jumped bumped up to associate 0 salary. A few monts later you get a stub bonus for ~6 months of work, which is separate from the analyst bonus. So therefore I get 275-315k. Only variable here is the 40k sign-on bonus that all new associates get.

You aren't double counting the two separate bonuses, necessarily, you are just accounting for too much of the 3rd year bonus in that second half of the year. The reason you would prorate the analyst bonus is to have an apples-to-apples comparison. By prorating the salary for your 3rd year, you are implying that you are trying to figure out how much you would make in a given 12 month time frame...Jan to Dec...which is why you "should" only count half of the 3rd year bonus.

So the actual figure should be about $50k less...but I think the point you are trying to get to is that it's a crazy amount of money. Realistically, you will have an influx of about $140k for the year, plus your checks will be several hundred dollars higher. Then, I believe that you will get another increase in Jan to like $120k or $125k is my understanding...could be wrong though, maybe someone can confirm or deny...and that's in addition to higher bonuses.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 
Smith3408:
Bonuses that high are a thing of the past nowadays.

$100k for a 3rd year analyst? Doesn't seem that far off. I'm fairly certain my friend, who is the 2nd year I mentioned above, had somewhere in the neighborhood of $70k-$80k and he, technically, wasn't top bucket...so it doesn't seem too far off. At any rate, what are we talking about $120k or $130k vs $140k??

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 

You are not double counting, however, third year bonus is for the past 12 months and then stub is for the next 6 months after the promotion, so you are count the bonus for a 18-month period here, not 12-month.

If you cut your 3rd year bonus by half to 50K, then you are getting 225K to 265K, which is a lot more reasonable for a 12-month comp. Essentially, the only extra portion is really the signing on bonus of 40K. If you take that out, you are just making 185K to 225K, which is just a little bit extra money than what you get for your 2nd full year.

Also, you 3rd year bonus of 100K is top rank bonus in this market I think, which means not everyone can get it. Your upper range of the stub bonus (80K) is probably not going to happen for a long while. 40 - 50K is a more realistic number.

 

You should have a clear conversation with your group about it, it depends on every bank. Most BBs have clear paths now for A-A promotes, so as long as you're not terrible most ppl have the option of staying. It's really once you're VP the paths becomes more unclear.

Also, I would try to keep an open mind when coming in for other opportunities as well. Always evaluate your alternatives.

 

Your desire to become an associate is irrelevant if your bank doesn't have the desire to keep you on full time. Just do a good job, get along with others, try to learn a lot, and don't go overboard with the "banking 4 life, yo" mentality. Hell, you haven't even started yet and are already saying you want to become an associate. Goals are good, but don't let your lack of experience make you come across as some blinded, naive kid.

 

I understand addressing (or blasting) the fact that he is only a mere SA and should not be thinking about A2A promotions, but can you guys actually answer the question? If he didn't give out that information that would have changed everything. At the end of the day, whether or not he is a SA or a 1st/2nd/3rd Year, giving him helpful information can not only help him out, but also others who are searching for the same answer.

 
InvertedMooning:

I understand addressing (or blasting) the fact that he is only a mere SA and should not be thinking about A2A promotions, but can you guys actually answer the question? If he didn't give out that information that would have changed everything. At the end of the day, whether or not he is a SA or a 1st/2nd/3rd Year, giving him helpful information can not only help him out, but also others who are searching for the same answer.

Focus on doing a good job for the first few months. In your mid-year review, if you've done well and the group wants to keep you-you'll know. I'd bring up your interest then. If you're a mid-bucket performer, the majority of places will give you a 3rd year offer. The top analysts (and this obviously varies by culture, hiring need) are more likely to get a true A2A.

As a summer, I would not mention it to anyone - how much people like you is as important as your work product (to a point). If you start asking A-2-A questions, the juniors will likely think you're just kissing ass, or worse... crazy. Figuring out what the culture with regards to A2A by looking at the background of the associates and VPs.

 

Or you can go to Europe. Out there, 3rd year -> A2A is the default career path;in other words, if you don't quit or get fired, you automatically get the 3rd year and A2A promotion. MBA is not a big thing across the pond, and most of their associates come from A2A, instead of MBA.

 

3 all-nighters in a row will quickly diminish your love for banking, 27 revisions of the same paragraph will quickly rain on your banking parade, and dealing with the word processing/printing department hours before your pitch book is due for a meeting with a financial sponsor will also quell your enthusiasm...

One reason i-banks have a 2 year program is so that they can ride their analyst class as hard as possible and then kick them out

Also, the skill sets necessary to be a good analyst are very different from those needed to be a good VP, MD, etc (although the standard pre-req still exist, i.e. strong work ethic, insatiable desire for money, etc. still exist)

Good luck

 

While these guys are trying to scare you, banking isn't that bad. I really liked it and strongly considered staying on for my 3rd year and taking a direct promote to associate. How hard is it? Assuming you still want it after 3 years, and you're half decent (which you would be otherwise you wouldn't get a 3rd year offer), not very hard at all. For the record, there are alot of things I liked better about my time at banking than PE.

 

1) People - Not saying that I dislike the people I work with now, but I loved the group I was in when I was in banking. All the analysts got along extremely well, the associates went out with us a lot, and sometimes the VPs would come, as well. Directors took us out to lunch (especially if they were sensing we were all getting crushed) and weekend excursions. This is also a function of the median age of bankers being lower vis a vis PE professionals. 2) Institutionalized - This is good and bad. But since we're naming the good: Better support (graphics, word processing, printing) and better infrastructure (IT, excel shortcut macros, powerpoint layouts, etc.). 3) Better variety - I guess this becomes a non-issue once I've had years of portfolio company experience, but I liked the fact that I could be working on an M&A assignment, LBO, IPO, convert, debt offering, or any combination. I also liked working with the product teams and learning about the different nuances associated each product.
4) Fast-paced - I don't necessarily get bored working now, but while banking days were very long, they flew by because of the amount of work and the pace of the workday. At the end of each day, you felt like you covered alot of ground and learned quite a bit.

However, I'm still extremely happy I made the move (especially given the way the markets have gone), and my opposing list for PE would probably be twice as long.

 

Though one point to consider is that in a recession, both external hiring and internal promotions slow down. If this were 2006 and you had wanted to stay on as an Associate rather than going to that lucrative PE job, it would have been much easier.

I also happen to agree that it's not necessarily THAT crazy to want to stay on doing banking long-term. I would not do it, and in fact am not doing it, but it could make sense for some people.

And to be honest, what you do work-wise on the buyside is not that much different... yes, there's less stupid work and not as many firedrills, but it's still modeling, diligence, etc. so if you don't like that work to begin with, it's silly to think that going to the buyside will make it all magically better.

 

I guess to begin with, I selectively interviewed with upper middle market firms that had less headcount in terms of investment professionals. I didn't want to be an analyst for another 2 or 3 years, nor did I particularly care for the lifestyle. As a result deal teams at my firm are small; 3 professionals most times, maybe 4 if its a big or important account. Generally, you work at your own pace and there's not a dozen people (or more) breathing down your neck. There is much more responsibility and along with it, much more stress - you are held accountable for much more than you were in banking (at least in banking, an overlooked error was always the fault of the associate, ha).

You also get quite a bit more exposure to, well, just about everything. Whenever I have questions about a model I'm building or company I'm researching, I call whoever I need to speak to - the sellside bankers, the portfolio company CFO, our outside counsel, etc. There's not as much fear that you'll screw something up by the senior guys. In banking, I felt like MD's were always afraid to let you be alone with a company CEO or CFO, like you'd spontaneously combust and the flames would damage the CFO's shoes, or something. Senior guys in PE tend to trust you more. I once put together a CIM-type document for one of our smaller companies. In banking, this would take probably 3 weeks to put together, with maybe a hundred iterations between the Associate, VP, Director and MD before the final product got sent to the printer. It would probably be many late nights or all nighters, and it would always come down to the wire in terms of deadlines. In this particular case, my firm sent me alone across the country to the company, where I worked with the CFO and VP of Finance for just 2 days, and it was done. Things are much more efficient in private equity in that perspective.

And of course, the obvious things: lifestyle, small perks (office, corporate jet, board meetings that transform into golf/ski outings, company dinners). Mostly though, the fact that you play a bigger role in your team than you did in banking - but again, probably more stress and higher expectations.

 

Do you do any deal sourcing or is your job mostly execution work? Lots of friends in PE now at growth equity and MM firms do a lot of cold-calling, and I can't say it really sounds appealing to me.

I know it's important and you have to be out there getting deals to work on, but it would be pretty boring to spend all day cold-calling all the companies on the Inc 5000 list.

If you do any sourcing, do you find it valuable? Or is it just a waste of time?

 

Why don't bankers just go and work for hedge funds instead of working for PE firms? It seems hedge fund work is a lot more fun than PE work, although I haven't worked with either of the two so my opinion might be incredibly wrong.

 

No sourcing work. I asked specifically not to interview with firms with sourcing models (although I considered interviewing with Thoma Cressey at one point after they told me it was 15% of my time, but ended up passing). A friend of a friend works for a sourcing model PE here in town and hates it. He also has some sort of performance quota he has to meet so that they know he is calling X amount of clients per day, which seems pretty ridiculous.

Hedge funds were never very appealing to me, as odd as that sounds. I didn't even consider HF. As stupid as it sounds, I never had enough of an interest in the markets to follow them everyday, let alone every minute. I knew I wasn't a good fit for HF, so I didn't pursue it. Same reason I went into banking and not trading.

 

I would say that your experience sounds about right - where I am at it looks like there is a 25-50% difference with MBA associates depending on where the MBA came from and other factors... I am going to wait when the time comes, to go to Bschool when I can get a good deal on my costs, and when I feel stagnant at work. Years down the line for now...

Still not sure if I want to spend the next 30+ years grinding away in corporate finance and the WSO dream chase or look to have enough passive income to live simply and work minimally.
 

Hey chron3k, so you know about the specifics of my situation already, but I can tell you that at my new firm, they have pretty wide salary brackets for each position, and usually graduate degrees allow you to be at the higher end of the bracket. They hired other people at my level who didnt have a graduate degree, who are getting about 20K less for the same job. I think education becomes irrelevant around the Senior Manager level.

-MBP
 

I work at a small fund in acquisitions. To take the next step up from anaylst you need to do the following:

  • Require less oversight on modeling/underwriting and be reliable in reviewing younger analysts work

  • Be able to formulate arguments both verbally and in writing when you are pitching a deal internally or externally

  • Come up with somewhat original ideas on deal structuring

  • Take ownership of DD

  • Relationship and business development

As you move up in almost any industry it becomes more about soft skills.

 

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Array
 

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