Monkeys, currently a BB VP and recently landed a PE offer in a MM Fund but for an experienced Associate role - yikes! Got the offer before VP promotion was received. Comp in line with 3rd year associate but lower than VP. Also, MBA not required for progression (makes sense since I already have one)
There is no headroom for a title bump but PE career in line with my medium to long term goals. Really confused here - finally getting to a point where I no longer do the bitchwork and focus more on the interesting aspects of deals. However, sellside sucks! whichever way you slice it. on the other hand, being an associate, while confident that I will be highly ranked, scares the shit out of me going back to gruntwork - will you take the position if you were in my shoes.
Let me put it to you bluntly. You'd be stupid not taking the gig, and I mean this in the most loving way.
1) you can ALWAYS go back to banking as a VP, especially after having direct PE investing experience. Your insight to a business is just better than a banker. This is a fact. 2) Not a lot of opportunities to move to PE at the Sr. Associate / VP level without prior PE experience.
Your goal is PE, as you stated, and from where I sit, this is really a life time opportunity for you. I hope you take it!
100% agreed.
Definitely leaning towards the offer - there is a bit of comfort in that comp is not too far off from a middle ranked IB VP.
I won't agree with that. Definitely been seeing more than a few VPs and Directors who spent their entire life in banking going straight to MF/MM PEs directly as principals. Somehow it feels that associates are often the ones who get the short end of the stick in terms of recruiting out
Wow, congrats on the offer! For those of us on the forum who are less experienced, mind giving us a bit of info on how you went about securing a PE gig (i.e. recruiters, networking, etc.)? We hear so often on WSO that any move to PE after the Analyst level is next to impossible, and I can imagine that it is, indeed, very difficult - so would really appreciate hearing your story.
That being said, agree with Whiskey5 - if PE is goal, take the offer!
I completely disagree that it is impossible to move post analyst years (based on evidence). It is however rare to see that jump to a mega fund or upper MM, since that route is structure, but in a few cases it does happen (strong network, worked with fund on a deal, performed well and got recognized (my case), change in cities, specialist fund etc). Without giving much away, I did have PE experience, albeit at a tiny fund pre mba but what helped in securing the gig was working on a deal with the fund and being recognized, by partners in the fund, for good work. I was not searching for this role and it just happened to fall on my lap.
That's awesome, thanks for that context - congrats again! SB'ed :)
Congrats man. When did you start to recruit for PE? I’m a current MBA assoc as well with long-term PE goals. I’ve been told to try to make the switch earlier rather than later (as soon as you have interesting deals to talk about). But seeing as you did it past A3 seems like that route is still feasible. Thanks!
The way into PE without PE experience is almost always either at Associate or at the top (MD/Partner). Unless you plan on staying in IB for at leastanother 5 years of so, I'd take the move now. It's not uncommon for IB VPs to come in at Associate level in a PE.
In any case, you'd have only a few months of VP experience by the time you move, so it's not like you're bringing a lot more than what they're hiring you for. If I were in your shoes, I would test the waters to see if the new title can earn you a bit of a higher comp at the PE.
You are currently facing one of the more frustrating career progression dilemmas. You are clearly over-qualified for the Associate role (that your analysts are applying for), but don't have the buy-side experience to jump in at the VP level. From my perspective, whether you take the job or not comes down to how much you care about your comfort level in the short-term. If you value the money and the lack of grunt-work for the next few years, then stick with your current gig. If you are tired of the sell-side and willing to take a small step backward to get out, then take the PE Associate role.
You are fortunate in that you have already cleared some tough hurdles in banking (i.e. making it to VP), so there is no wrong choice here depending on your goals and willingness to take a risk.
1) he is offered to join as experienced Associate. This is not A1, so most likely A2 with a wink and nod guarantee to Sr. Associate as along no major fuck ups like telling a PortCo CEO to f himself.
OP also mentioned this is for a career track PE opportunity and he has MBA already. The opportunity to transition to PE given his profile is so exceedingly rare that I only know of 2 others that made this transition. If this is just for a 2 & out type of situation then I'd say OP should stay put as VP in banking.
Also to add: his promotion to VP in banking does not automatically qualify him as a good Associate in PE. Very different roles. If they gave him a VP role in PE, it would set him up to fail, from day one.
Solid points you both make. The reason I certainly will do well as an associate (junior or experienced) is that I do have prior PE experience but at a much smaller (and sector focused) fund. Also, have worked with the PE team on transactions and get the dynamics. Recruiting effort during MBA was for larger funds but was unsuccessful there - interest was solely from similar sized or even smaller funds.
Very good point on the last sentence. +1
What if you're an associate moving into Private Equity as an associate? Would that be considered a step backward?
Depends. A BB Associate jumping to a MM PE Associate role is a step backward (especially in pay as junior pay at banks has grown disproportionately fast over the past 3-4 years). Larger PE shops won't have the pay discrepancy so you could make an argument that an A1 to A1 move is truly lateral.
It's only a hard decision if you think words mean a lot. If you think the word "associate" is a big deal because it's the same title your analysts are going for. Or if you think the word "Vice President" is a big deal because it's the same title that some respected senior-ish folks hold at your bank. If you really put this much stock in words, I have to be honest and say I'm surprised that you're as successful as you are. I imagine most people would place very little value on a word.
As for being a grunt . . don't think a PE Associate can't call up a banking VP and tell him to work the weekend. Happens every Friday somewhere in midtown.
Less about title and more about responsibilities. Not sure if you are in college or have prior IB experience. If you do, you would know that the silver lining to years of brutal work condition is becoming a VP (essentially a different job from analyst / associate), having a life and working on more interesting aspects of deals (leeway for business development, managing deals, effectively becoming the deal "manager" etc). A senior associate in my opinion would have been more appropriate where responsibilities are similar to that of a BB VP at this particular fund.
To your last point, having worked on both sides, it is plain false that a PE associate will keep a banking VP working all weekend - sure some work may be tossed the bankers way (and in most cases driven by / approved by someone more senior in the fund) and that work will be done by the analyst if reasonable. I personally push back on unreasonable timelines without flack from anyone.
Weird thread. We're both looking at eachother's comments and seeing a guy who seems to not know how things really are, despite having about as identical a career arc as two people can have.
I left banking as at the end of my VP1 year to join PE, although a bit different because instead of joining a MM PE shop I joined more of a mixed PE/VC role in a family office.
I don't see any reason you'd be lying, I'd just say two comments indicate your IB experience to be quite different from mine.
You describe becoming a banking VP almost like it's the other end of the rainbow. I know you weren't saying its all roses but you present it as a pretty stark contrast from Associate. Personally I didn't find the difference to be significant enough. Maybe I was less of a rockstar VP than you (I mean that sincerely), but I still had too many layers above me (product MD, coverage MD, 1-2 directors, coverage VP) to feel like I was getting to steer the ship. Half the time I'd feel like a junior end of MD (good) but the other half I'd feel like the senior end of Associate. That's life in the middle. Also, I gradually got more responsibility as an associate so the move from A3 to VP1 was no different than any other one-year move. Nothing magical about the promotion.
We'll just have to agree to disagree on what happens when the PE client on a sellside calls in casually with an ask. Even if it's just the associate. In my ~10 MM PE deals the result was always the same - client says jump, banker asks how high. If your experience was different that's fine, but you speak with a lot of certainty for a guy who's still deciding which side he wants to be on.
Congrats on your potential move. Despite what others might say on this thread, it's an avenue that is rarely available. Won't surprise you to hear I'm a vote for PE. Ultimately I just don't place a ton of value on the VP title in banking, for reasons explained.
2 years from now you will be a banking VP.
2 years from now if you play your cards right you'll be a PE VP.
Who cares if for 24 months you had a different title (it's unlikely you'll be changing jobs within that window anyway).
"There is no headroom for a title bump but PE career in line with my medium to long term goals."
There it is, no? Seems like that should settle it right there.
Re: Gruntwork - FWIW, senior guys in PE were getting in the weeds way more than senior guys in banking. Like in my IB stint, VPs never touched models, but in PE, it wouldn't be uncommon for senior guys (including the more junior partners i.e. the non-founders) to be digging into models themselves.
Moves at the senior level depend a lot more on the firm / group. PE isn't necessarily always the better option. A lot of firms never hit their carry hurdles or have trouble raising subsequent funds. It can be hard to move up the ranks and in many cases there are basically two tiers: the founders and then everyone else. There are also great firms where everyone from associates to partners get huge payouts. You have to figure out which one you're dealing with.
The "no headroom for a title bump" is a bit of a red flag to me. If not now, do they have a clear plan for when you'd get the promotion? Associate to VP at a PE firm is usually a big jump, so I'd want to have that spelled out before I accepted an offer.
What kind of work are you doing at the BB IB? Do you have a path to MD there? A path to managing relationships and building a client base in a solid industry?
Shouldn't you be coming in as a senior associate? (typically 2 years banking experience, 2-4 years [sometimes, 3-4 years] PE experience).
Typical associate title is reserved for 2 years banking, 0-2 (sometimes, 0-3 years) PE experience. Why can't they call you a senior associate?
Sounds like the comp is high, but I would be slightly worried about the optics of such a title downgrade - might look like you got forced or something else. I also echo labanker's concern directly above regarding headroom / plan.
I will be effectively staffed as a 2nd year associate and move to a senior associate after one year. Senior associate will be 1-2 years before VP vs my peers who will be in the middle of their MBA program.
OP said his offer is for an "experienced Associate role"
Your "years" are getting downgraded quite a bit, and I can't figure out how your comp is flat. Shouldn't 3rd year BB IB Associate be $400K+? (never mind what you would be making as a VP). Isn't 2nd year MM PE $225-250Kish?
Clearly I'm very far off on one (or both) of these, but that's what I thought of as "market" comp.
3yr IB associate is ~$400K+ but there are UMM PE funds that pay first year up to $300K all-in, and I have been told H&F and Apollo pay even better. Not sure about second year but even if it is $350K, after tax it is just a 30K delta which you can take imho for a job that you prefer in the long term.
I personally left banking in the middle of my Associate 2 (2 years of Big 4, 4.5 years of banking before, so a lot of ground work already) year to join as Associate 1 an UMM fund with a 4 year associate program. It was easy while I was going through the recruiting as I hated being the middle man in banking, and I was seeing very limited value being added by bankers, but I have to say that being back at Analyst 3 type of life is not that great. However, the work is indeed more interesting and the depth and experience of the people I work with is just on another level so, overall, I am fine with it and hopefully, in a 3/4 years, happy.
3rd year IB Associate surely not 400k, especially median figures and Fund one of those that pays well and are willing to pay above market
Well, this year top BB paid people ranked not at top 200k plus 105% and top ranked 200k plus 125%, which is more than 400k in both cases. Probably median is 360-380k so not far.
I wouldn't take it. Big step down. No guarantee you progress. My motto is never accept a new job you're overqualified for.
Out of curiosity, were you actively looking to move into PE or were you approached about the new opportunity? If the latter, how common would you say that is? If the former, how was that experience as an experienced associate/new vp?
The latter but it was through a direct deal with the fund. It is actually pretty common if you work on FS sellside mandates and have the opportunity / visibility to take on a lead role and excel at it.
Take it and re-evaluate after your first 12 months or so. You can always go back.
This is what I am leaning towards. I have a pretty good relationship with my group (and a good reputation across bank) so I do not believe going back will be too much of an issue
Don’t understand this strategy: why should you go back? I mean, you’ve already been in PE so you have a good idea of what it is. You’ve been approached by them because of your worked well with them, meaning that you already know them on the job (despite in from a slightly different perspective, which isn’t bad if you think at this because if they treat you well as banker it is quite likely that they’ll treat you even better as one of them), so no doubt on the team. What could go wrong?
The only point I’d raise is what was your ideal trajectory before being approached by them. You mentioned aiming long term to PE but it seems you’re not currently trying to make the move...
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