What, if any, differences are there between PE firms with 100MM to 300MM AUM vs. larger firms with 600MM to 1B AUM?
I go to a very non-target and don't have a stellar GPA (3.5 ish) but I landed an internship at a newly formed MM PE that is in the last leg of raising it's initial fund (100MM). FYI, these guys are all very experienced and have co-founded other PE firms and closed numerous funds in their career so I am not concerned with it being a "new" firm.
I love everything about the work environment, the partners, the culture...it seems like my ideal situation. Additionally, I am currently interning at the VC arm of a regional financial services firm (eg IB, Fin Advising, etc.) and definitely not enjoying it quite as much. Thus far it is more like the Army than the entrepreneurial environment I had hoped for.
At any rate, I am hoping to get a position with the PE firm, as I intend to intern there until my graduation in the Spring of 2009. However, they have an extremely lean structure right now (3 MDs, 2 OPs, an office manager and me) so I don't know how likely it would be that I could get a spot. I know they will be looking to hire at least one associate and one analyst in the not-so-distant but I am afraid it will be before I graduate and they may not be in a position to hire additional staff at the time of my graduation.
The MDs have told me that if they couldn't bring me on, they would gladly pass me off to their friends at other funds and I could likely land a spot somewhere in the southeast to mid-Atlantic. This, of course, would be a great option assuming I couldn't stay where I am, but these places are mostly MM PE firms with less than 500MM AUM.
From what I gathered it seems that pay is fairly similar among the junior levels, so is it just the more senior levels where the difference is more noticeable? Are the major drawbacks mainly: not being able to work at mega funds and maybe never owning a private jet? I know that a huge generalization, but my point is, you can live very comfortable at a senior level, outside of NY for sure, so is this just semantics (e.g. single digit millions vs double digit)?
Additionally, is there generally a certain number of people at a given size firm? Like 100MM AUM generally have no more then X analyst, Y associates, etc?
Thank you for any insight you can provide, its greatly appreciated.
Regards,
Chris
There's not much more to it than what you have. You got it:
Teams are small. Analysts are fewer in number the lower you go in AUM. This is because there really is no value add for a small team that runs quick numbers themselves and focuses instead on working directly with the small businesses they are buying (family-owned, small management teams, etc.). They can handle those things themselves.
Deal flow is lower. This makes sense, especially with small teams. A group with 3 MDs/partners might look to close anywhere from 10 to as low as 2 deals a year.
Other things to consider are differences in pay (this in part relates to deal flow, since your bonus is a function of how well the fund is doing). It might be worth your time to talk with your MD/partners at your internship now. I imagine at least one of them has larger fund experience. Talk to him/her about it.
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