Better prospects for LT success: Small PE firm or Big 4 TS?

What do you think? I have already spent a couple years in TS at a Big4 and am looking for the next move. I am uncertain as to my LT goals but want to set myself up now for the most successful career in the future. I feel as though an offer from an PE firm, no matter how small, is hard to turn down. Can you guys help me walk through the pros and cons of such a decision? Thanks.

Private Equity Interview Course

  • 2,447 questions - 203 PE funds. Crowdsourced from 750k+ members
  • 9 Detailed LBO Modeling Tests and 15+ hours of video solutions.
  • Trusted by over 1,000 aspiring private equity professionals just like you.

Comments (8)

Feb 26, 2016 - 12:36am

PE, no question.

The learning experience is unparalleled, and the work is incredibly interesting. Only potential con may be job security and, depending upon the fund, maybe work life balance. My typical work week is 50-60 hours when not working on a deal, which is comparable to TS. If I'm on a deal, there could be some 80-90 hr weeks.

Feb 26, 2016 - 10:53am

Thanks for your reply!

What are some questions i should look to get answered to gauge the potential of the firm? I would hate to join somewhere that was not successful (I imagine a large portion of the compensation is based on closing deals).

Also, at Big4 I am flooded with emails from recruiters about job prospects (good and bad). Do you think this would continue at a small PE firm?

Feb 26, 2016 - 11:34am

How small is small?

Questions to ask if you don't already know/can't find the answers online: AUM, performance, how much dry powder, whether it runs a discretionary fund or is a fundless sponsor, how they would see your career trajectory, etc.

If it is a fundless sponsor with low AUM and ambiguous performance data, I'd be a little sketched out. If it runs a small fund with meaningful dry powder and good performance, I'd feel pretty good with the PE firm.

Best Response
Feb 27, 2016 - 12:53am

If you go to PE, you can leave for other stuff, including going back to Big 4 since you have that background.

If you stay in Big 4, PE and many other jobs will never open up for you.

Career flexibility is key and that's one of the things I love about working in PE.

Even if it's a small PE firm, your long term earnings potential is significantly greater. You're still a PE guy learning how to acquire and build and grow companies. That's such a rare combination of skills to have and you literally only get that in PE. You don't get that in Big 4 or IBD.

Take it and run if you ever have the option. It's rare that someone in Big 4 gets into PE. But if you get an offer, take it. It may not work out, everything has some risk, but statisically it's a no brainer, unless you really love doing TS at a Big 4

  • 3
Feb 29, 2016 - 2:53pm

Thanks for your response!

I had one more question that i think would be very helpful to get some insight on: Can you guys speak to the bonus structure that is typically in place at these small firms? For example, is it fixed or variable based on the number of deals that are closed on?

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
Mar 1, 2016 - 1:24am

Varies, couldn't give you any solid information. Google for the heidrick and struggles PE comp report. It has some good info on PE comp by fund size and is free to download.

  • 1
Feb 29, 2016 - 3:36pm

This is a little off-topic, but what are your thoughts on starting out at one of the larger MM firms vs. an EB?

Mar 1, 2016 - 1:27am

Consequatur reiciendis aliquam reiciendis ex et modi. Eum quo at impedit sit reiciendis et est. Rerum fugit recusandae similique sint repellendus.

Start Discussion

Popular Content See all

Investment Banking is Paradise
+276IBby Partner in PE - LBOs
Public banging
+183OFFby Intern in PE - LBOs
Oncycle is a fucking joke
+167PEby Analyst 2 in IB - Cov
MD’s Daughter/Son has student loans?
+115REby Analyst 1 in RE - Comm
How often do you get "matches" on apps?
+113OFFby Associate 1 in AM - Other
Dating smart girls
+99OFFby Analyst 2 in Consulting
Who manages your money?
+96INVby TechnoPanther

Total Avg Compensation

September 2021 Private Equity

  • Principal (7) $694
  • Director/MD (18) $575
  • Vice President (67) $365
  • 3rd+ Year Associate (68) $270
  • 2nd Year Associate (139) $254
  • 1st Year Associate (284) $222
  • 3rd+ Year Analyst (25) $160
  • 2nd Year Analyst (61) $135
  • 1st Year Analyst (184) $118
  • Intern/Summer Associate (20) $67
  • Intern/Summer Analyst (219) $59