Co-investments to Direct?

Hi all,

I have recently come to the conclusion that I want to switch jobs within the buyside and would greatly appreciate your advice / views. Firstly, let me give you a bit of background about myself.

I joined a bulge bracket bank here in London straight out of uni (2014) and stayed for a bit more than 1.5 years in their M&A team. I then joined the fund that I am currently with where I am focusing solely on co-investments, (think of the likes of HarbourVest, Adams Street, Lexington etc.) and have now been here for about 10 months. I feel that the investment side of things is very interesting as opposed to banking but I still feel that I am missing out when it comes to managing the assets / the value creation bit, also given our nature, we are never in the "driving seat" throughout the process. I am happy I moved over since I now get to do a lot more modelling (opmodels and LBOs from scratch etc) instead of focusing the majority of my time on slides which is essentially the life of a junior banker.

**So now to my questions: **

1) I am wondering, given the above, what you believe my shots are at moving into a direct firm? I am aiming to find something in the mid market space - and I have actually had some headhunters suggesting places but its mostly been poor shops where there is a lot of Big 4 ppl (no offense) - pls note that everyone in my current team comes from M&A teams at BB's or elite boutiques.

2) How do you think I should position myself in order to make the switch?

3) Do you have any examples of people that have made this type of transition, I know its possible because I heard about 3 people so far this year (Harbourvest --> General Atlantic, Harbourvest --> Riverside, Pantheon--> Astorg). Any examples would be appricated. Any funds known to look at co-inv people would also be greatly appricated.

Thank you!

Comments (10)

Dec 16, 2016


Dec 16, 2016

It should not be an issue also because you come from a BB. Try to highlight your investments skills and point out the similarities between co-inv and direct. I do not personally know people who made a similar move.

Dec 17, 2016

Thanks for the advice. anyone else have any views?

Dec 19, 2016

I don't see why not. I have a good buddy that works at a similar shop (co-investment focused fund with a minor FoF business that he does ~5% of his work in), and it seems like he pretty much does all the work done at a direct shop in terms of business diligence, modeling, investment thesis creation, etc. A lot of the partners at his shop come from direct shops - assuming this is the case, it may be worthwhile to see if you could tap into their network to get interviews.

Dec 27, 2016

thanks, makes sense

Dec 27, 2016

What is it about your experience that makes you want to leave?

"Truth is like poetry. And most people fucking hate poetry."

Dec 28, 2016

The main reason is that I feel im being left out when it comes to the operational bits as we are not "active owners" due to the nature of our strategy... to give you an example its not feasible to have a board seat on each company in our portfolio since we own ~60 of them. I want to be part of the value creation part as well, co-investing is only execution focused. Also, I feel I am under payed compared to direct shops, but that's not just my firm but most of the co-inv shops

Dec 28, 2016

It's not very common, but obviously not impossible. There's a reason why headhunters are pointing you towards "lower-tier" PE shops: compared to a typical IB / PE (with true direct experience), you face an uphill battle. Headhunters want to maximize their opportunity to place clients so they'll show upper-tier opps to candidates with a more traditional profile.

I don't personally know people that have made this transition, but I imagine they did a lot of networking on their own to establish relationships at those direct investing firms. Seems like the only way to even get a shot.

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Best Response
Dec 29, 2016

update: got two processes lined up for january! one with a well known midmarket firm in Europe and one with an international tier 1 mega buyout shop - to be honest, now that I have started reaching out to HHs its a lot easier to get interviews compared to when I was on the sell-side. so any co-inv ppl out there - please know that its possible fairly easy to get traction!

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Jul 4, 2019