I work at a top-tier MM PE firm and honestly, I've become a little disillusioned with the amount of shit I have to deal with. Don't get me wrong, my hours are not considered terrible (probably 60-70/week, no weekends), but the entire execution of the deal process is nauseating and repetitive. Since we're swinging for the fences (>3x MOM for new platforms from growth juice/buy-and-build - not looking for 2x MOM on stable cash flow), we typically do a shitload of work and try to uncover every stone. Getting PwC/KPMG/E&Y to build up databases and diligence the shit out of companies always result in finding things that we don't like, which causes us to drop purchase price at the last minute and haggle over the last $5-10 million. The amount of diligence we do causes us to lose sight of the original investment thesis.
Has anyone else felt this way about PE in the MM?
My main question is whether anyone has experience or know of people switching from PE to a direct placement mezzanine fund (Ares, GSO, BlackRock/Kelso, Carlyle, MSCP, AIC, etc.)? It seems to me since you are more concerned with preservation of capital and putting small bite size $ to work, the entire deal/diligence process should be more efficient and less prone to the myopia we run into in private equity. Also, as an anecdote, our strategy in PE is to spend the least amount of time possible educating the lenders in order to get commitment papers. Given that mezz guys only get a limited amount of exposure to the equity sponsor and receive diligence responses piecemeal (and slowly, as sponsors need to get their own diligence done before they spend time with lenders), theoretically the mezz diligence process is more high level and results in less brain damage. Can anyone comment on whether this statement makes sense?
Would love to hear people's thoughts on mezz diligence process, lifestyle and compensation relative to PE. Also, is it tough to make the switch (my hunch is no, but I have not talked to any headhunters about it).