Comments (8)

Funniest
May 30, 2020

IR sucks. Lifestyle is so-so, but it's deeply uninteresting.
What makes a big difference is whether your particular firm treats IR as true partners or views it as merely a 'smile and dial' service. You wouldn't think that sophisticated PE firms mistreat IR people, but it is actually very common. You can DM me to discuss, but if you really have in hand an opportunity to join Bain Consulting, I'd jump on that. KKR may be a flashy name, but think of it this way - would you rather be a real and productive consultant at Bain, or the toilet cleaner at KKR?

    • 6
May 30, 2020
earthwalker7:

IR sucks. Lifestyle is so-so, but it's deeply uninteresting.
What makes a big difference is whether your particular firm treats IR as true partners or views it as merely a 'smile and dial' service. You wouldn't think that sophisticated PE firms mistreat IR people, but it is actually very common. You can DM me to discuss, but if you really have in hand an opportunity to join Bain Consulting, I'd jump on that. KKR may be a flashy name, but think of it this way - would you rather be a real and productive consultant at Bain, or the toilet cleaner at KKR?

IR comp is supposedly pretty great for what the job is...and isn't it half ex-bankers? I know it gets flack since it's not a revenue generating seat, but surprised how harsh it sounds when I know several people from BB IB that went to IR for the lifestyle change.

Most Helpful
May 31, 2020

There is a huge amount of variance in terms of comp. Is it half ex-ibankers? Somewhat. I do see some former IBD people, but it's generally more equity sales folks or former placement agents. I also do see some deal people who switch over, but that's more rare.

You do see far more women in IR than men. The job is very EQ-heavy and involves relationship building, and many women outperform the men in that department.

Comp is all over the map. But generally no, IR isn't paid anywhere near as much as deal folks.

I don't agree with the point about it not being a revenue-generating role. Raising AUM definitely is an essential and integral part of the firm, and is revenue generating. To be frank, spending money isn't that hard. Spending wisely and generating high returns IS hard. But IR is similarly difficult, and I'd take deals over IR any day of the week. In IR you are CONSTANTLY searching for LPs, sending communications out, and trying to raise AUM, and fees are generated on that AUM, so it's absolutely a revenue generating role. IR is arguably more directly linkable to revenue than investing is, because who knows if/when a deployment of capital will result in revenue. Bigger AUM means more revenue now via management fees, and is the driver of more revenue later via carried interest.

At the end of the day, the job has pros and cons.
Pros: generally better hours and less need to deal with the deal minutae.
Cons:

  • far less respect than deal professionals, both internally and externally;
  • less control over your career and process
  • highly repetitive and logistics oriented

I'll paint you some pictures and you make the call as to whether it suits you:

  • You will get to repeat the same presentation 300 times on the phone and in person with LPs
  • You will try to pull LPs thru a process, which takes a lot of logistics and handholding and this is not mentally interesting, but you have to make sure that a million logistical things go right and they sign the dotted line
  • You will go to conferences and schedule a ton of meetings and juggle calendars. If you're at KKR people will want to meet you. If you are at a MM firm, you're going to be like a cheap hooker walking the streets (via email) shilling your smaller fund. You'll get to send out 300 individual and personalized emails to all LPs at a conference saying "Hi, I'm at RRK, a mid-market fund that has had stellar 20% returns. We focus on oil & gas. Care to meet? I give great handjobs." Well ok maybe no HJs, but there's a lot of begging for meetings and phone calls, 80%+ are ignored.
  • You have to track a lot of minutae in the CRM. You have to follow-up. You are judged by how much you close.
  • You will spend countless hours in Preqin and Pitchbook researching out LPs and their preferences, only to be ignored or told what you're selling is not what they like to invest in. You will get angry responses back ("Did you even check out our website first???!!" Yes I did. My bad. Sorry.)
  • All deal MDs/CIOs think their fund is awesome. So if your fund doesn't attract money, you will be blamed. If your fund raises money, you probably will not get credit. When I raised $1,5bn at a high returning fund, I was given no credit and only a standard 2 month bonus, because the fund returns made IR look easy. When I joined a smaller fund that then struggled with returns, I got reamed daily. It was beyond toxic. The CIO was yelling "What do you do all day??? You've raised FUCKING ZERO!!!" As if it's my fault no one wants to invest in a fund that has major strategy drift, a CIO that belittles LPs to their face, has little focus, and a negative 25% annualized return.

The degree to which an IR role is fun to do depends greatly on the firm / product, the degree to which you're respected and compensated, and your own disposition.

I'll give you some case studies:

  • My former analyst didn't want to touch deals, didn't feel she could really do finance, but liked people. She organized family office gatherings for fun on weekends. She has now been hired to a megafund. Good for her.
  • Another friend was a FoF LP that went to a mid-sized fund which he has helped to grow to >$1 or 2 bn. He told me he gets paid a nice base and a very significant % of the capital raised. I think he might clear $500k / year during a fundraising year. Plus he gets carried interest.
  • My last IR gig I took a 40% pay cut (went down from $275k+ to $150k) because I was desperate to work on the deal side in healthcare. Punchline? I got slotted permanently in IR and didn't work on deals. Bitter? You bet. I worked 80+ hour weeks, 7-days per week, only took a few days vacation in year 2 because it was mandatory, and I still had to spend much of the time on a laptop.
  • The person junior to me at that shop came from equity sales. She worked at the role for a year then went back to the ibank to make more money. She found the hours in IR to be longer than equity sales, and not well compensated.

The degree to which IR has better lifestyle depends also heavily on the shop. IR has to make a lot of calls and be on emails constantly. You're always on the hunt. You have to generate your own leads (unless I suppose, it's KKR). You may be traveling a lot. I know some IR people that are >50% of the time on the road. Others travel maybe a couple of weeks a quarter.

And the degree of ease and fun in raising is dictated by the product. When I was raising for an ultra-high returning PE fund, the calls came to us. I got to meet Fouad Said (Oxford's business school is named after him), got to meet Henry Kravis who headlined an investor conference we put on, met the named founders of more LPs than I could remember. When I worked at smaller startup PE funds it was like I had an infectious disease - no one want to even shake my hand at a conference, much less have a sit-down.

Maybe that's for you. Maybe it isn't. Just go in with a clear understanding of what you're walking into and what you're giving up.

    • 25
Jun 1, 2020

Dude - thanks a ton for putting this together. Blame me for my judgements, but I had never thought about IR with this width. I always saw it as the team that lubricates the system to make LP capital inflow easier for the funds. Thanks for clearing the air. Cheers!

    • 1
Jun 1, 2020

thank you so much!! you've given me a lot to think about and I will follow up with you. so kind of you to write such a detailed response

Jun 1, 2020

@Incoming Summer Missile @theretiredgymnast Thank you for your kind words. My pleasure to try to give a peek at the inside of IR. Good luck in your exploration. Hopefully you can get good insights into what the IR department is like at KKR. Maybe it's awesome, maybe not. There's a pretty big range. Good thing is if you do end up going to KKR, you'll get people to meet you easily, and will build a big rolodex quickly. It is not so easy to be able to get back to deal side though, so know what you're giving up if you do make that move. For some, IR can be a long and profitable path. But there's sacrifices in that there's a lot of repetitive work giving the same pitch over and over, and you're not necessarily going to be compensated as well (though that varies widely by firm). Good luck in your decision, either way.

    • 2
May 30, 2020

what in the lifestyle do you want? if it's hours, not sure Bain consulting is the play.

May 31, 2020
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