Does IB/PE Kill Your Creativity and Intellectual Curiosity?
DISCLAIMER: I'm incredibly grateful for having a stable job in a time like this - just needed to vent some concerns which have been bothering me for a while and really making me reconsider my career path.
I thought I was getting the best deal imaginable by going straight into PE - I could bypass the long nights and brutal culture of banking to pursue a job more focused on idea creation vs. pure content creation. While the hours may (arguably) be better, I'm finding myself continuously doing the same mindless work. I feel like a soldier on the world's most boring battleground, executing tasks passed down to me by 4-5 layers of command, never having the slightest level of ownership or control over the work I complete.
Why do financial firms insist on explicitly silencing and excluding junior members from any form of discussions until they reach a certain level? I'm not saying that my MD should come to me begging for my insights on the debt ratio we should use on an LBO, but I've literally had Associates tell me "don't say a word" during internal meetings with VPs/MDs, and that I should always turn off my camera on external calls unless told otherwise... the few times I tried to chime in with a small thought or idea through an email to my Associate, I never even got the courtesy of a response.
"Oh, well at least doing some decks and models can be somewhat interesting since you can learn about companies, right?" I thought. Not when a VP sends you the exact content and details he wants on a deck, even telling you what fucking color scheme and shape sizes to use, only to yell at you afterward when he realizes the slide specs he sent over make no sense. I truly never thought I could manage to make a 40-slide deck on something and have zero conversational knowledge on anything in those slides.
Meanwhile, I look at my friends in junior positions at MBB or in tech and they seem to be given opportunities to speak up occasionally, participate in whiteboarding strategy sessions, and get a relatively normal amount of ownership over the content they generate. Sure, there's definitely a "grass is greener" mentality here, but it's tough to reconcile why an IB/PE Analyst/Associate can go weeks without even being acknowledged beyond the occasional "pls fix", while Managers at consulting firms regularly ask their junior-most Associates for their opinions and insights.
Did I just come into this industry with the wrong expectations? Does anyone at an IB/PE firm get to do anything even moderately creative until they become a VP or Director? Seems bewildering to me that so many smart, outspoken, intellectually curious college students pursue these jobs which overtly destroy your intellectual curiosity. I can take the long hours and tough culture, but I'm not sure I can stand being told exactly what to do and how to do it for more than 1-2 years.
I personally think most people who go into IB don't really have much intellectual curiosity. Their main motivations tend to be income and prestige.
I SB'd, but disagree as I think people in finance tend to have a jaded view of it.
There are many interesting dynamics to the job that aren't given their fair shake. I think there is a subset of people who get into IB because they admire the ever changing dynamics of jobs. You see different industries, companies, and business models every day. Even though the deals have a machine like process to them, you cannot help but admire the fact that it shows you how quickly and significantly industries fall in/out of favor with the marketplace. Talk to any veteran banker and they will tell you all of the trends that have boom and bust over the years. Not to mention the ever changing human dynamics of the industry, and that you will never negotiate the same deal twice.
Additionally, I will say that many of the OPs issues sound like they are firm-specific. I work at a smaller firm where I have more visibility and responsibility - I have had none of the same issues stated as an analyst or associate.
Awesome response, couldn't agree more. +1. Makes me miss IB. I will say I never learned more in a shorter period of time. Also the level of understanding you have for the companies you analyze is relatively deep relative to how long you've been analyzing/working with them.
When I was in Consulting I had lots of really intellectually stimulating conversations on relatively equal footing as partners, at the junior manager level. I never experienced any of what you are describing until coming to Private Equity. I wrote about this recently for someone else wondering about leaving finance for MBB and I'm sure you can find the thread. The reason for staying in PE, if you don't like the work, is the money. That's why I'm here.
The formatting obsession in this field is super annoying and something I still resent. I empathize. Same with your point about being told exactly what to do and how to do it. The silver lining is that there is learning to be had here whether or not you recognize it with this form of apprenticeship / work. It is a different type of growth, not one where you help co-construct the world and answers around you and make sense of them (e.g., constructivist model of learning / consulting), but one where you receive knowledge by absorbing practices, thoughts, and information of others (e.g., banking model of learning / banking).
Going to have to agree here. Came from consulting and moved into PE and it wasnt until I got here that I was told exactly how to update a ppt or model and when I can and cannot speak up in meetings. In consulting the participation was encouraged.
Intellectually curious people shouldn't pursue a career in financial "services". You should be the type that finds fulfillment in helping others and providing expertise/solutions to enjoy IB imo.
I like this post a lot. Well written too. Yes, this toxic culture exists and is not uncommon, but also team-specific. I experienced this, but rose above it by being entrepreneurial in my own role. Read this - "Why you should become an 'Intrapreneur'" (3.26.2020) [Harvard Business Review] https://hbr.org/2020/03/why-you-should-become-an-intrapreneur. I created materials / analysis that did not exist, from scratch, made materials/processes more efficient, and used knowledge as leverage --that if I had created analysis synthesizing data and offer insights that my VP, MD, etc. don't even have the level of knowledge that I do, that they would be FORCED to respect my opinion, and that when we sat around the table discussing a deal, my opinion would matter --b/c I had the data to back it up (and so did my VP/MD - printed them copies too). For example - created an
Intrapreneur - Materials Created from Scratch (that don't exist, and add value)
Happy to DM and discuss more on ideas for you to use your creativity to earn respect, but i recommend leveraging
(1) knowledge,
(2) create something new that adds value, voluntarily (even if its not necessary, but is insightful)
This is an underrated post. I've been doing this without a name for it at my firm.
I came to IB from enterprise tech sales and previously had my own start-up. Was actually looking to get into VC but ended up in IB.
At my firm now I've created new systems for sourcing and managing deal progression, funnels for converting leads from social media ads and created templates for emails that save me at least 10% of my time daily.
It's pretty rewarding, and I have fun doing it. Get to flex my entrepreneur side. The partners are also pleased.
Can you tell us more?
That sucks for sure, but I think it depends on the place, since I've experienced both ends of the spectrum in IB. My last firm was the exact opposite, and I fucking hated it and could not give two shits about my deals. I was bored out of my mind and honestly was what drove me to lateral--a process I was actually pretty selective about, and turned down some opportunities once I got a sense of how things at certain banks/teams worked.
My current firm runs fairly lean processes where I'm even on deals with just an MD and that's it (as an analyst). These tends to be the smaller ones, but I like working on them more because I feel my input is actually received. I have one MD who seems to be especially receptive this, and sometimes shouts me out for things even as small as writing a good email about something to a client and saying "you framed it well blah blah." Being incredibly overworked for the last year, this stuff matters to me, no matter how small it is in the grand scheme of things. There are a few who have seen me function over the last year and let me handle a lot of client action (particularly the earliest stuff like material prep) basically on my own until its final revision time, when they step in. This may be a factor of my favorite mid-year review complement, which was "great with clients". Here, I actually enjoy my deals and and not only feel ownership, but also feel like I want to do the best I can for clients who I honestly just like to shoot the shit with. Building ongoing rapports with clients about sports, beer, food, the area they're from if I have family there, etc has been my favorite part of the job. They're real people who I get to actually interact with on a regular basis, and that motivates me, as compared to be just an email from a coworker telling me what to do.
So enough about that. Having kind of been in your shoes, I really don't know if shit is going to get better where you are. It was not going to improve at my last firm, which is why I left to give IB one more shot to see if I can enjoy it elsewhere. If you have the ability, I'd honestly say you might want to think about doing the same. Stuff really is firm dependent, such as the experience working at one of the leaner EBs vs the stacked BB firms. I would assume this has at least some applicability to PE as well. Obv take your time and be selective--not a lot of opportunities and you are in very good shape in your current job, so don't rush or anything. I know nothing about consulting from first hand experience, but I have a friend at a big market research consulting firm who gets to go into the field and like interview doctors and patients and shit, which he really likes.
What size firm are you at? Keep in mind, the bigger the firm, the more "specialized" and cog-like your work will be.
At smaller firms you'll get more exposure to all parts of the process including the decision making process around new investments.
You have to realize that investing is all about creating a scalable and repeatable investment process. You do this by creating a template (figuratively speaking) of how you do things. It ensures consistency, efficiency, and quality control. It's the most junior person's job to tear open cardboard boxes, and place the object in the right cubby holes. That's why it feels so mindless, because it sort of is.
A few perspectives:
(1) At this stage in your career, the trick is to learn the process mechanics very quickly so you can go into autopilot, and but also avoid becoming so jaded that you're unable appreciate the grander plan / more interesting parts of the deal.
(2) As you progress in your career and become more distanced from unpacking boxes and indexing and sorting the contents, the thought process gets less tedious and is a bit more freeform. I.e., mastering an industry vertical, cultivating relationships, and thinking through emerging themes to invest around. But as a human being, you're hard wired for process to maximize efficiency, so even this becomes tedious eventually. It's often the novelty of something that makes something interesting. So continuous learning and cultivating your intellectual curiosity is what keeps things interesting, not necessarily the actual task at hand.
(3) The trade off between process/mundane and free-form/intellectually stimulating is scale and consistency. It's very difficult to scale capital while also optimizing for maximum flexibility and intellectual fulfilment. While a very flexible and off-the-run investment mandate provides the broadest investable universe and a diversity of opportunities (presumably very intellectually engaging), the tradeoff is scale, consistency, and ability to be differentiated/specialized. The body of knowledge you accumulate is far less transferable when you're hopping around from one industry to the next (e.g., consumer to saas to industrials), or from one investment style to the next (e.g., growth equity to special sits to credit). It's very difficult to be a true subject matter expert when you are so broad, even if it is interesting. In fact, it is interesting because you're learning it for the first time... the problem is you're competing against market participants that are seeing it for the 100th time.
I agree with this 100% and junior employees have to learn the industry/process. However, I don't think that this justifies creating a culture where your employees are literally scared to death to comment on something or to present a suggestion.
Totally agree. That has much more to do with bad culture, and insecure/arrogant managers.
There is a very interesting book out there called "Range" which delves into the mechanics and background to becoming either increasingly specialized or more of a "utility" player and where each type sort of excels in the long-term. My perception has been there is an increasing focus on bankers, lawyers, investors, professionals, etc. becoming increasingly specialized so you are a "mile deep and one foot wide" in a professional sense (e.g. not a "banker", not even a "levfin" banker, but a "mm industrials levfin" banker at the most senior levels). There are obviously benefits of being so specialized, namely creating and preserving relationships and a reputation, but ultimately you hit a development plateau and its hard to see your work as anything less than the process underlying successful repetition.
Part of my issue with this industry is this model, while successful, creates a corner of comfort in one's career that even very intelligent people become hard pressed to escape from and think intelligently outside of. I think a lot of smart, hardworking people go into financial services thinking they will be universal masters of corporate finance, only to realize very quickly that the quickest path to success if finding a small niche and just beating the hell out of it while the market presents an opportunity there.
You're in a bad culture. I've actually seen this a few times with PE firms. In fact, I've seen it worse where even a VP is not allowed to say or suggest anything.
I currently work for a boss who is the opposite. He wants to push his people forward and wants to hear ideas. At company meetings, he'll even encourage the most junior team member to put in a word or two. Now, that doesn't mean that you're running meetings and your idea will likely not be followed 80% of the time, but everyone appreciates the input unless you're over doing it. In a one hour meeting, you get to raise your hand perhaps once if you have someting truly insightful to say.
What you describe is just bad leadership. Yes, you are hired to do repetitive mundane tasks, but if you believe that your Ivy League analysts and associates have absolutely nothing to contribute ever, you're a complete idiot and are not using your own resources to the fullest. And like I said, juniors will make pretty lame suggestions 80% or 90% of the time, but that other 10% to 20%, they may have some idea that really contributes to a deal in at least a small way.
NoEquityResearch
Yeah agree with this - OP it sounds like you’ve been unlucky in terms of your firm’s culture. I work in PE myself and one of the major differences from banking is that you do get some (arguably relatively limited) creativity and control over your work.
In my IB analyst years it was pretty much “update these inputs in the model” and “make these changes to the PPT slides” - ie a very strict almost robotic process. I don’t begrudge it as that was how an analyst learned, but as you get experienced it gets boring/repetitive very quickly.
By contrast at my PE firm it is much more results-based. I.e. my boss or a VP will ask for an analysis of a potential investment and I go through the CIM and data room, I look for what I personally think is relevant and build my own excel model and create my own PPT summary.
Now obviously we have model templates to start with (although often I build up from scratch) and also a set format/layout for PPT, but other than that it’s really up to me how I structure and present my results. Of course when I send it to a VP they might change a fair bit and strip out what they don’t like, but ultimately I get to make the initial suggestion on things like potential cap structure, financing etc.
This probably doesn’t help your current situation much OP. But I guess what I’m saying is the whole industry isn’t like this - and it may not be like this at your current firm as you progress and get promoted?
Whilst IB/PE will never be known as a creative industry, there is a surprising amount of creative thought that goes into analysing and structuring transactions - in fact that is often where the biggest value-add to a deal is (as opposed to who can build the most complex model)
I think anyone in the first 5 years of their career vastly overestimates the value of their thoughts or ideas.
The reason I say that is because at the junior stage of someone's career, they're likely working with anywhere from 5-20% of the information and perspective that the seniors have. The higher ups literally think about stuff that juniors have no concept of or understand, because they haven't seen it for themselves due to a lack of experience.
So instead of trying to produce value to differentiate oneself or whatever, a junior employee is better served trying to understand why VPs and MDs are making the decisions that they are. The goal is not to add value as a junior, but to pick up the remaining 80-95% of information and perspective that more experienced staff bring to the investment decision making process.
I say that as someone who thought they knew how things worked back when they started their career, but should've just shut up and focused more on learning what was actually going on.
I might be wrong, but I honestly felt like reading a leading, public company's annual reports helped me understand more about a particular industry than any kind of due diligence that IB/PE firms do for a specific deal.
That's because IB/PE reports completely neglect the commercial side of the business half the time
Yes. Full stop.
Finance/deal-making is much more process-driven than anyone cares to let on. It doesn't make for a great recruiting pitch. But senior folks in IB/PE are adept at running a process; they've seen it all, or almost all, before (besides, usually a fund is founded on a single strategy that they continually redeploy, so you shouldn't run into too many unfamiliar situations), and know how to steer the ship. Your job as a junior is to help execute that process, and in time, learn how to manage it yourself. There isn't much they really need or even should ask your opinion on.
You bring up consulting as a contrast. This is partly cultural, but mostly systemic based on the kind of job it is: if deal-making is about process, then consulting is about bringing structured thinking to ambiguous problems (and making slides about it). The ability to contribute to this effort is much less dependent on years of experience.
Source: worked in both IB (bulge bracket) and consulting (MBB). Some of my best friends from b-school are in PE. Discussed extensively.
you probably weren't that creative in the first place to go into this field. speaking as someone who has worked in this field a few years.
sorry in advance for hurting your feelings to all those that get offended (actually not sorry).
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