As the title suggests, I have a poor understanding of what the exit opportunities are for PE associates. I know that staying in PE can be tough, so what are my other options? Hedge funds? Investment management? Corporate?
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B-school is a fairly common path post your associate stint. It also allows you to spend some time exploring multiple possible paths (including staying in PE) and can provide the feeder in some instances.
Some will jump to a portfolio company in either an M&A or operational role.
Hedge funds, isn't too common on the whole but really depends on the strategy you're in. If you are an associate at a special sits fund for example, then certain special situations or structured debt hedge funds may be a fit. I have a friend who did Real estate PE and now covers the industry for a large asset manager.
Finally, I've seen a few people take their hand at entrepreneurship either in starting a company or starting a search fund.
I've seen about 85% going to bschool and 15% to a fundamental/event driven/distressed hedge fund.
Failed PE exit opps (Originally Posted: 06/25/2013)
There is the typical 2 years IB>2 years PE>2 years MBA>back to PE route. As a PE analyst, as long as you do what you're told, there is little risk of losing your job unless your firm fails. But in post-MBA PE on track to become a partner, if you make poor investment decisions, what are some potential options/exit ops if you leave PE?
different fund, corporate world
Exit From PE (Originally Posted: 01/07/2012)
This may go against what everyone is trying to do here, but what are the exit opportunities for a private equity professional? I have an opportunity to go straight to PE out of undergrad, but could see wanting to leave after several years. Does MM PE give you enough operations experience or would I be better off getting some consulting experience first. I am doing IB internships so my experiences are more deal oriented than strategy.
Not everyone likes PE and sticks around. One thing I have seen is for PE folks to join one of their portfolio companies in a strategy role. I've even seen them become CEOs and CFOs of smaller companies. As for consulting experience, I do think it would be valuable, but I wouldn't recommend doing it to position yourself for industry. I think you're better off just going straight into the role you're looking for. If you can't get it coming from PE, you're probably not going to be that much more qualified after getting consulting experience.
All of that said, if you leave PE to go get your MBA, you'll be positioned to pursue pretty much any operations/industry role that you want.
Thanks CompBanker. That is exactly what I was looking for
Yey! Compbanker
Career Advice - Private Equity before IB and exit opps (Originally Posted: 12/19/2013)
As a junior at a semi-target school, I recently accepted a summer internship at a private equity firm (one of the top 100 from the PEI rankings). I am curious to know what my exit opportunities (moving from one PE fund to another) will look like compared to those who are going through investment banking before PE. Are headhunters less likely to target me because I haven't been through the typical 2 year banking stint?
thanks~
What is a "top 100 PE firm"? Are you talking like Thomas H Lee, Madison Dearborn, etc.? Like brand name funds that are routinely discussed on this site but aren't quite KKR, BX? Or are we talking SA offer at a BB/EB/top MM? If yes, then you might very well receive the same headhunter opportunities. If no, then you might want to consider recruiting for FT IB positions...
Their AUM is ~$4B and to be quite honest, I am sure a top BB-IB would trump this internship. That being said, should I be trying to get a FT IB position post graduation before looking at larger PE funds?
Put it this way: I wouldn't rush straight into PE right out of school unless the firm has the brand plus an established analyst program.
Need advice re: PE exit op (Originally Posted: 01/27/2012)
Need some third party advice.
Currently at a well known bank (not BB, but a reputable boutique) as a 2nd year. I am in talks with a MM PE firm, offer is almost in hand, just going through the normal back-and-forth that's required at smaller funds. Small team, but the guys there are good (in terms of personality and professional background) and would make for good mentors. However, they are on the very small end in terms of AUM (Sub $250m; about 50% invested). After talking to an associate at the firm, I was actually pretty sold on his day-to-day tasks (he is very involved with all aspects of the firm). They are also looking at an up-coming fund raise (which I would actually like to be a part of to get a more "wholesome" PE experience).
My long-term goal is to start up my own fund in an emerging market (my background is from this emerging market), hence why I like the small / "entrepreneurial" feel of the PE shop. However, my near-term goal is to get into a good MBA program (I went to a non-target, so I would like to build a solid network in Bschool) and I am just not sure if the lack of PE brand will be a major deterrent (the mitigating factor is that the IB I am at now does have a reputable name).
Any thoughts from you guys in the MM PE space? In terms of learning opportunities, MBA options, etc...CompBanker, I am looking at you :)
Full disclosure: I am def trying to get out of IB asap given my absolute hate for it (username says it all haha), so there is a lingering sense of urgency to GTFO.
I think MBA is definitely essential. To start your own fund you're going to need to reach a level where you're sourcing deals and seeing things done from start to finish. MBA will help you get to partner level from what I've seen.
how far are you in your CFA?
which emerging market? mm PE is the best place to get trained if you want to do em PE in my opinion (more hands on). MBA opps very good if you have a good story, which you seem to have. MBA will help you to get started for sure - potential collegues, business partners or LPs (the rich kids)
Thanks for the replies.
Rasta: its a pretty untapped EM...I am bit biased but I think the market opportunity is pretty huge. Check PM.
I know lots of people that came from sub $500 million shops and ended up at H/S/W. While you are much better off (b-school wise) going to a blue-chip PE firm, no doors will be closed to you by going to a small shop. Either way you'll want something that separates you from the bazillion other finance guys out there. Also, the general rule is that the smaller the fund, the more hands on the role will be as a pre-MBA associate. You'll want to do your best to spin this experience in your essays to demonstrate how you've had extraordinary career opportunities.
Thanks CB, big help (as usual!).
What happens to Associates (Originally Posted: 11/15/2006)
...when the market blows up? I know the BB banks have no problem laying off most of the analysts...but can they really afford to fire a lot of their associates too?
Associates are considered the new blood. MBA programs don't mint nearly as many associates as Undergrad programs mint analysts. Know what I mean?
Good question. I want to hijack the thread real quick and ask about analysts being let go. How much of an economic downturn has to take place before they start laying off analysts? And as an analyst, how much job security do you feel you have?
Analysts and associates are relatively cheap...I've been told they're some of the last to go in a downturn. It's the pricier VPs and directors that aren't pulling their weight who get axed first.
(Anybody on the forum who was around during 2001-2003, please chime in. I'm sure we'd all be interested in your view).
I'd have to say I disagree with this, unless you're speaking from personal experience. I obviously agree that VP's and directors are more expensive than analysts and associates, but in a bubble-bursting downturn I'd assume just cutting inadequate VP's and directors wouldn't be enough to boost the bottom line.
no one is safe...but analysts associates are cheap. so your bonuses go down but there aren't many layoffs
Can anybody share experiences from 2001-2003? From what I know a LOT of analysts and associates were laid off in that timeframe? Can somebody share numbers? Also, for associates who were not laid off, what were the bonus numbers like?
Alrighty folks... I don't want to give away age/experience too much, but for what it's worth I can definitely chime in.
Let's see I started grad school in '03 and I'm 1-year post-MBA and from my perspective the climate for opportunities in IB is significantly better now than it was between 2000-2003. That's all u fellas need to know about me. Je je je.
Having said that and looking back at the past 5-6 years, I think that 2000-2002 were the worst recent years in IB in terms of recruiting, bonuses, deal flow etc.
I have several friends who took scut level positions at unheard of firms... the type where you eat what you kill... in order to stay in the business. One friend lost his VP position at SG Cowen on 9/11. A squad of folks from NY flew out to Chicago in the wee hours that morning in order to close down the SG Cowen Chicago office. My friend has not been able to get back into IB since then. Stories like this are plentiful amongst folks who were around during 2001-2003.
Also, 2001-2003 were utterly miserable years to try to get an analyst or even associate positions in IB. Many companies kept their commitments for on-campus recruiting just for show, others backed out of a presence in campus recruiting entirey. Companies just weren't hiring. Many many friends, like I said earlier... took alternate positions for what they considered would be an interim period of 1-2 years and they are NOW (like me) trying to come back. For example, a friend who was at ML investment banking transferred to ML corporate finance in order to keep his job in 2002 and now he can't later to an IB anywhere at a VP level. Very difficult. He thinks he's stuck in corporate finance. Actually, I don't think he's stuck and in fact believe he has a good gig going. Anyways, the challenge is that we're all competing with younger blood and freshly minted MBAs, analysts etc.
Also, the industry is quite different. Firms are quite different. Folks won't believe/understand when I say this, but actually IB used to be somewhat 'loyal' to an IB and teams would stay a lot longer with an IB than they do now. These past two years I've seen more mobility of teams from one firm to another and the industry is highly incestuous. Also, the payout is huge for teams to cross over to a competitor shop and if you survived the carnage of 2000-2002, then a lot of teams in 2003 made transitions to competitor shops for the payouts and to re-brand themselves, sort of speak.
I generally agree with TireKicker's comments above. In challenging economic times, analysts and associates are not necessarily the ones to go. Two reasons. First, both analysts and associates typically have 2-3 year stints in their positions so they fall off or rotate out on their own. Second, at the VP and senior levels I do agree with Tirekicker in that these folks are more expensive to support and if they're not helping to pull their weight to bring in business etc, then they're axed. It's that simple.
I am not speaking from personal experience--to the extent that I am a class of 2004 analyst. But I have obviously met several people who were affected by the downturn...my previous post was a reflection of conversations I've had with others.
Anyway, I AM speaking from experience when I say that analysts are relatively cheap!
I'm really interested to see what's going to happen with BB IB & PE. Don't you feel like something is going to happen soon? Expensive credit will reduce PE opportunities, LBO's leveraged to the moon will be exited at tremendous losses, etc. Where will the BB IB's get their revenue stream from if the market for deals disappears and what will happen to all those PE people that get laid off.
The ambiance right now in terms of expensive credit and its impact on PE, LBOs etc. reminds me very much of the telecom bust in 2000-2001 when THAT industry was equally highly leveraged etc.
Ok, I admit they are two completely different industries. However same underlying foundation for a crash.
What I find so intriguing is how 2nd lien loans have become a part of almost every M&A transaction. Folks are discussing whether 2nd lien loans will fall out of favor soon. Perhaps. Whenever there's a credit crunch there's a simultaneous flight to quality, isn't there?
Also interesting how many BB's are aggressively expanding their restructuring teams... hmmm.
from hearsay on Morgan Stanley/lehman/JP Morgan in 2001-2003.. they overhired on the analysts, so about 1/3 were cut during summer training. those who scored on the bottom of the summer exams were laid off.
then.. 1/2 of the analysts were subsequently cut as the year started. 1/3 of the associates were cut. those who stayed had a pittance of a bonus (like $15-$20K at the associate level!).
also, i had a few friends who were working in IB in Asia that time. due to the tech bust plus SARS circa 2003, it was pretty ugly. all the MDs/VPs jetted out of Hong Kong while those anlaysts/associates that weren't let go were left in the midst of the SARS epidemic to close whatever meager deals there were.
Save your bonus. You don't know how long this gig will last
so would you guys say the culture now is a lot worse than the one depicted towards the end of Accidental Investment Banker(i.e. people were getting canned left and right, but at least the superiors tried to help people out by trying to move them into a different department)
Disclaimer: The post above has been made by someone who is not currently employed in IBD, and has not had an interview yet...
But usually if you're not happy at a desk, they will try to move you somewhere else.
no it was during the down turn, when people were being let go left and right. So the MDs etc would help them by transfering them to a different group, or a different department, or would call their friends at other banks to get them a job.
But that was mainly for the first round of layoffs, the rest it was a dog eat dog world. The book even mentions that the "worst" bankers ended up ahead of the better bankers, because they were able to find something else before the floodgates opened.
Just wondering if stuff like that would happen now
Disclaimer: The post above has been made by someone who is not currently employed in IBD, and has not had an interview yet...
People don't change that much in 5 years...some will help you some won't
is this different between boutiques and BBs?
Disclaimer: The post above has been made by someone who is not currently employed in IBD, and has not had an interview yet...
It will depend on the individuals not the bank
.......all the high fliying graduates who couldn't get jobs ended up in Accounting firms or doing Law - like me a lot want in now (as they qualify as accountants this year assuming they graduated 2003) - I think this 'gig' as you guys put it is gonna run out of gas soon (sector dependent of course) - get into commodities (the bull market has a few years in it yet).
From the ghetto....
Next step after PE (Originally Posted: 12/14/2015)
I know pe is every banker's dream but what happens if one gets bored/burnt out/fed up with pe too? What would be a logical next step preferrably with humane work/life balance?
There are tons of options. You can look for a fund with a better lifestyle-they exist. If you're at KKR/BX and still doing IB hours, you can move down in size and while smaller doesn't necessarily mean you're working 40 hrs/week, you can find some funds with much better hours (you just have to figure out which ones they are and tbh they tend to not be in NYC). I've also seen a few guys go to different funds also such as mezz funds or BDC's.
There's also the common move into industry in corp dev but I've known a few guys who have moved into a CFO track or operations that could lead to a COO/CEO gig some day but that'll depend on how far into a PE career you are. It's easier to do this with a portfolio company but you can do it with an unrelated company. Startups are an option but that's a risky proposition and a totally separate discussion that's been had dozens of times on here.
I've seen some people go to fund of funds. You can also go to LP's-pensions funds, endowments, etc- and their advisors. Although the traditional allocators will do exactly that-allocate capital to sponsors-many of them have started up direct investment functions over the past decade so you may lead deals or at least co-invest. Nowhere near as much in pay but much better lifestyle and not as stressful in career progression.
I've also seen people go into impact investing or non-profits because they wanted to do something that they felt would benefit the world but I know nothing about non-profits and only slightly more about impact investing.
Consultant in the pension fund - it's a good option. Pensions consultants provide advice and information on retirement provision to organisations. They are involved in reviewing an organisation's current pension provision for staff members and recommending a range of options for consideration. They may then be involved in setting up and running occupational pension schemes on behalf of companies. Supporting organisations to provide for their future financial security requires a combination of up-to-date knowledge of the financial services sector and an understanding of pensions legislation. Most pensions consultants work for specialist pensions and benefits consultancies, although opportunities also exist with large financial services companies and life assurance companies. Alternatively, it is possible to work as a personal pensions adviser or independent financial adviser, selling pensions and saving plans to individual clients.
Family office.
The offices of PE principals in particular love the profile of junior PE guys. Each of the Apollo founders, Bonderman, Bloomberg, Soros, Jim Simons, Sergey Brin, Gates, etc. all have a personal investment office separate from the firm or company they run.
There's low volatility in that sort of position, so from what I've witnessed it's ideal for someone who wants to be surrounded by high-caliber colleagues, have an intellectually stimulating work experience, be paid well, and (above all) have the option and/or expectation to stick around a long time.
Recruiting occasionally happens through headhunters, but the best way in is through someone you know.
Thanks for the responses. Do you think PE to tech is achievable? İf yes, how? Or does one need an mba to make the shift?
What would you want to do in tech? Have you done tech deals and do you have a network in tech.
Either marketing or finance. I've done a couple tech deals but no network at all on the west coast.
What might you need to do in tech? Have you done tech bargains and do you have a system in tech.
However, most of that information probably won’t be new to you – if you’re already working at one of these firms as an intern or analyst, then you should be well acquainted with the many job positions and career paths that are open. But if you’re working at such a firm already, it’s always important to supplement experience with external information and research to make sure you make the right career decisions.
exit opps to PE 101 (Originally Posted: 09/13/2011)
Dear all,
As a rookie in this industry, I know that PE, to some extent, is at the end of the food chain. But did PE guys ever consider leaving this position and move on to something else? In that case, what exit opps are available for them? appreciate any sharing
http://www.leveragedsellout.com/pics/thetrack2.jpg
There are a few guys at my firm that did banking -> PE -> B-school -> HF.
and i thought pe and hf are two quite different career paths, which are equally well paid. is not normal for someone to switch to hf after pe right?
One of the greatest benefits in working in private equity is the connections you will make, both in the financial world and the corporate world. On one of my deals, the operator, who was a managing partner at a billion+ VC firm, was impressed with my work and wanted me to join him as the CFO of one of his portfolio companies. These types of opportunities, while not common, do come up every now and then. Another example - One of the principals at my firm was a VP when he closed a corporate carve-out deal. They needed someone to run accounting and finance at the target, so he was given the option of continuing to work on the deal side or getting some corporate/operational exposure. He ended up being the CFO for a couple years and coming back as a principal on the deal side once we sold the company.
That's not to say one is better than the other, it's just one of the exit options available after you've done some time in PE, particularly at the more operational oriented firms.
Not to hijack, did you take the offer?
Who are the more operational oriented PE firms? Thanks!
Thanks for sharing. But may I assume a boutique PE firm internship can provide the same connection as described in your previous post? By PE firm, were you just referring to a few large-cap PE firms. After all, not each PE firm is held equally.
In fact, I am recently considering leveraging my contact to land an internship offer at a boutique PE firm. My current concern, however, is this might not give me good exposure as compared to a BB IBD internship. PE firm internship has the disadvantage of small dealflow and thus little deal experiences as compared to a BB IBD internship. This disadvantage will be even more obvious in a boutique PE shop right?
The only positive thing is that a PE internship experience in my CV might help me get into a PE firm four years later, after 2 year IBD + 2 year MBA. As post-MBA rarely break into PE shop without prior PE experience.
Any comment/suggestions?
Of the larger firms Bain would be a main one. Hellman and Friedman and General Atlantic are others. KKR also has a rather large and dedicated operations team for its portfolio companies. Basically if a firm has a high relative % of consultants it's a good bet it'll be more operations-focused than pure financial-engineering focused
golden gate has a lot of ex consultants. platinum equity, gores group and marlin equity in the la area like to look at "hairy" deals so one can imply they are operations focused.
what's after pe? (Originally Posted: 03/18/2007)
I'm sort of ignorant, but I'm pretty sure that most pre-mba people only stay on for two years. What does one do after leaving the pe industry?
Get their MBA and then its up to what you want to do, but having the PE experience is definitely a leg up when it comes to recruiting
Retiring at 35, smoking a Cuban cigar on the beach at your own private island in the Bahamas.
You can't retire at 35. A deal takes 3-7 years to materialize. You'll need to run through about 2 to 3 full cycles before retiring.
I was only kidding.
how lucrative is pe. we all hear the rumors but....
Depends.
I have some data on this, I'll try to post it one of these days and ask those in the industry for their opinion on it's accuracy.
MM PE Exit Opps? (Not b-school) (Originally Posted: 04/15/2013)
Will be interning this summer at a $2-8B AUM PE firm as a rising senior. Their FT conversion rate is relatively high. If I choose to accept, where could I go after 2 years? Are the exit opps better than the standard 2 year BB program?
audax?
No....anyone have any insight on my questions?
also interested
You'll start out as an analyst at the PE firm, working under an associate. Most firms that hire directly out of college will readily offer a direct promote if you're a good employee (though it's tough to say without knowing the specific firm). After that, your route starts to mirror someone who started out in IB and then went to the buyside - you can stay in PE, do B school, corp dev, work for a portfolio company, etc.
What if you don't want to become a direct promote and are interested in opportunities elsewhere...where can you go?
It's really wide open; there are no "typical" paths once you get out of the pre-MBA associate role. What it really comes down to is your interests and your experience/skillset, and if you lack the skillset to get you to where you're interested, then it becomes a matter demonstrating you're capable.
One step at a time; crush the internship and get the FT offer first.
This.
Hopefully you rise up to Associate/VP/Director, but a lot of my PE buddies end up going to HFs or Bschool. A smaller portion go to startups or get C-level positions at a smaller firm or ex-portfolio company.
I was just wondering what else I can do after two years, rather than the typical 4-year route (2 IB, 2PE). Is it possible to pursue opportunities at mega-funds (Apollo, Carlyle, Blackstone, etc.) after 2 years for example?
Anything is possible (including moving to larger funds) but I don't understand why you're so focused on things that are 4+ years down the road. From your post, you will be an intern, so who knows if you even will like the work?
Your focus should be on 1) asking yourself if you really like the role/firm, and 2) doing your best to get a full time return offer (even if you realize that it's not for you, since it demonstrates that at the very least, you're employable.)
Possible, yes. Like I mentioned you could also exit into a hedge fund or a startup.
bump
Exit Opps from $2B+ PE Fund in LA (direct from undergrad) (Originally Posted: 05/02/2012)
I'll be starting as an analyst in July at a PE fund with a little over $2B in LA (they've been doing really well recently). It sounds like the experience will be excellent, but I'm wondering how this potentially unfolds down the line.
Do I still go through PE interviews in a year and a half? Is it difficult to switch firms (whether they're larger or not)? Do I stay in PE for only 2 years before MBA or wait longer?
I've crawled all over search but there's not much insight there since direct from undergrad PE isn't common. I'm really excited about the opportunity but just a little unsure about how this all plays out down the line.
Thanks.
+$2 bn is a decent size fund, and would guess your senior guys likely are fairly well known among the LA PE community, so don't see why you wouldn't be considered for formal PE recruiting in 2014; as most funds consider PE experience in addition to a traditional 2 year IB program.
Could probably give you some more clarity if you wanted to PM me the specific fund.
Why are you already considering exit-op? This could be a place where you work your way to the top. Your mindset is off. Alternative investment classes (PE, Hedge Fund, Venture Capital, etc) is commonly considered the end of the line in investment finance- the most likely opportunities for a typical employee to make out-sized amounts of money. Why would you even be thinking of leaving before you arrive?
I appreciate the response rls; I'm not necessarily closed to that possibility (of sticking around), I just want to be aware of what the available opportunities are (including possibly staying--I'm definitely not opposed to that in theory).
Also, considering I'm just graduating, the probability of this being the end of the line is fairly small, especially given my desire to pursue an MBA (of course, that may change, etc.).
Just trying to gather info!
What firm are you at? I'm going to be working a SA at a bulge in SF and was considering doing PE in LA after 2 years.
what will you be doing there?
Trojan: At the risk of sounding incredibly ignorant, it should be the regular entry-level tasks assigned in PE, such as, if I understand correctly, due diligence (including traveling), evaluating potential investment targets, etc.
The interview process was ridiculous and the final round included making a presentation (with accompanying model) for a hypothetical investment they proposed (real company but fake scenario)
Anyone else have input?
what is pay for PE with no IB experience/straight out of undergrad?
just curious
you can interview for other PE firms relatively easy if you have a meaning role in investment. PE firms still prefer guys with buyside + modeling exp compared to someone with just sellside and modeling exp.
that being said...you might want to edit the post as there aren't that many +2 bn fund in LA...let alone having an analyst role so you are easily searchable
Life After PE (Originally Posted: 11/14/2009)
Once people start to work for PE firms (non- ungrad level), what do people normally do afterwards?
Do they stay there and make MD? Do PE firms have up or out policy?
they just go around wearing hugo boss belts (see http://cdn2.ioffer.com/img/item/101/165/639/o_Rp8B1RTIGceAaU4.jpg ) and make everyone call them 'bawss.' its the best.
i always thought the spelling of the pronunciation is "bauss", but tomato tomahto
I would like to know this as well..
I've heard some places are 2 years and out? Some make you go get an MBA?
So, at the Pre-MBA level, Megafunds are basically all two and out. In fact, most firms are two and out except for the most exceptional pre-mba associates and if there is a need in the firm right then. You then go get an MBA and come back as a Post-MBA associate.
At the Post-MBA Associate level, it then just becomes an up or out culture. Many people are able to advance because they already have 2 years of PE experience plus 2-3 years of banking experience before coming back. They then know what needs to be done and that they truly want to be in it for the long haul. At this point you go from Post-MBA associate up through the ranks to Managing Partner if you can.
Once you are at the very senior level, you may start your own fund, stay and manage a fund, leave for a portfolio company, or retire and sleep on your bags of money.
How common is it for PE funds to throw down for your MBA in exchange for a long-term committment?
It is very rare for either a bank or a PE shop to throw down for your MBA. To be frank, they don't need to. They feel between the signing bonus you get afterward and all the money they have already paid you that it is really unnecessary.
If by some magic you were some major pimp that they wanted to keep around, but you wanted an MBA, they might consider something like that. However, you would be retarded to go get the MBA. Think about the opportunity cost, you go pay $100k+ and during that time frame you would could have easily earned as a post-mba associate $1m+. If they are willing to promote its silly to go get an MBA at that point.
Yes you hear stories about some firms doing this, but its very rare.
How much is the signing bonus for a post-MBA associate? Does it depend on whether or not it's a return to the same firm?
Is it the same 2 and out culture in MM PE? If you're good, why would they want you to go to business school? Do you really learn that much in MBA?
Signing bonuses are all over the place, but a good start is the BB IBD standard associate sign-on of $40k. I have heard of Post-MBA signing bonuses at this level and far in excess as well.
If you return to the same firm they may have allowed you to keep you phantom equity, or some other incentive that might not have vested prior to leaving. Plus you will maintain the political capital you built up over your time. You might also continue to work as a summer at your firm, if they like you enough.
MM PE, for the most part, is just as much a 2 and out culture. The main reason being at an MM shop you need the network gained from an MBA even more as your firm won't have the name to attract capital or deals in the same way as a Mega-fund. You don't necessarily learn shit from an MBA, but you will have a built in network afterwards, which is the big reason they want you to have one.
PowerMonkey, are the hours for a Post-MBA Associate on average ~ 60-70?
Not a big change in hours pre to post mba. So, if you work at a laid back MM PE, 60-70. If you work at a mega-fund, you can expect 70-80 most likely. A lifestyle shop is a lifestyle shop, and a crazy busy place will always be like that.
Think about it this way, in banking associates work as much as analysts, for the most part. The same holds true in PE. Until you are running transactions and bringing in dollars, you will not see a large decrease in hours. Yes you may be able to pawn off more on both Bankers and your Pre-MBA analysts, but I would never expect a big change in hours just from a promotion. Also, even when the hours go down, you are still basically always on call when a transaction is on. When working on deals, everyone gets screwed on hours.
The only thing you can be assured of in the pre to post MBA move is more money.
After two to three years in MM PE (where there is no partner track), what is the likelihood of moving to another PE shop or HF without getting an MBA?
bump
How much are the comps for Pre-MBA PE analysts and for post-mba PE Associates?
Life after PE (Originally Posted: 03/25/2013)
I've been steadily chugging down "the track" for some time now. Target school > MM banking (one year) > lateral to BB banking > PE, the whole nine. I've managed to stretch out my current PE associate tenure well beyond the typical two years, but I've extended my rope as far as it can go so it's time to move on.
So I started thinking about answers to the obvious "what's next" question, and I came up with the following list, which is fairly typical for someone with my background:
But then I started to think about which parts of my job I really enjoy, which parts I really do not enjoy, what success in the above endeavors would require, and what I really enjoy doing on a daily basis.
I've always been the kind of guy that has derived a great deal of pleasure from producing something - something that is well put together and of high quality. Thus, I actually enjoyed a lot of the more "mundane" aspects of analyst IB and associate PE life, because it involved "building" lots of things like models and presentations.
Given this affinity, the prospect of continuing on the typical finance trajectory made me uneasy. My analysis, model, and presentation building would eventually be replaced with "deal managing," which from what I've observed means telling other people to do things and then presenting what those people did. Of course, you do have to know what to tell those people to do, but at the end of the day, you are neither really doing anything nor creating anything. There is no craft to master, no tangible skills to hone. Only an endless stream of conference calls, meetings, and plane rides to meetings.
"Grow up," I'd tell myself, "eventually this is what work becomes - you get paid for your ideas, your decisions, and your relationships, not your ability to monkey around in Excel." Most others with whom I spoke would corroborate this view. But the "decisions" I've seen senior executives and investment professionals make are generally all but already made by the time the dilemma reaches them. The junior folks have distilled things down into an obvious answer: "do you want to invest in a project that has an IRR of 5% or 25%?" And whether or not the senior folks "ideas" succeed or fail (especially in the investing world) is mostly a matter of luck, from what I've observed.
So if the usual exits opps are unappealing, where does that leave me? Well, I've been picking up programming on the side a little bit, as it seems to be a natural offshoot from building things in Excel, it involves mastering a craft, and programming gets a fair amount of airplay on this site (particularly from Eddie). I've found I enjoy this, which gave me a crazy thought, what if I really dived into this, and did it full time?
I initially thought that ship had sailed, that I was too old (just turned 30), and would be way behind. But then I saw some information on these programming bootcamps (Dev Bootcamp, Hack Reactor, gschool) which basically purport to take a complete novice and turn him into an entry level developer in 9 weeks - 6 months. It's along the lines of the "non-traditional" learning theme that also gets a lot of play on this site, so it got me curious.
What do you guys think? Is this nuts?
I could see myself in your shoes in 3 years - am leaving MBB for PE now because I don't want to be a manager, and enjoy doing the analysis way more than managing people.
It seems like an interesting play, if you'd use the skills to build your own business, versus becomes a programmer for some big tech company.
How about a small hedge fund where you can work as an analyst researching investment ideas and crunching numbers. Aren't there senior analysts at these HFs who deal strictly with investment analysis?
Or a small MF? I know people over there who are in their 50's and still produce brief reports, do some modelling and come up with investment ideas views?
I'd second this.
I've thought about this, and this certainly seems more up my alley than some of the other options. The problem is, and this might seem a bit heretical, I don't think there is ultimately a lot of skill behind "successful" investing. It's a lot more about finding greater fools, capitalizing on and riding exogenous stimulus waves, and plain luck.
I've seen several peers leave lower MM PE funds and Growth Equity funds to take on senior position with small, fast growing companies, revenues
You can always do the camp for 3 months, get the experience and see if you like it. In the mean time you can be recruiting for other PE/HF/CorpDev jobs. If you like the programming route stick with it. If you don't, you can just spin it as a sabbatical of sorts for the finance jobs and say you always wanted to learn to code so decided to do so while you looked for new work.
As other people have said I believe you are craving operating experience and I think you should go out and get it. I feel that a lot of people on the finance side spend most of their time evaluating companies and end up developing a specialized skill set(not a necessarily bad thing). I think it would only help you as an investor and as a businessman to get operating experience.
Why are you resistant to telling others what to do?
Not resistant to telling others what to do or leading a team. Just wary of becoming a professional "manager," the value of which is highly suspect in my opinion.
I agree on the small HF piece. Know a former Cerberus guy that started one.
If not, go Corp Dev route w/an interesting corporation. Could be more freedom and different than what you are used to.
What programming language are you learning?
Best thing you can do is start immersing yourself in the local tech community. Participate in a Startup Weekend and get a feel for things. Odds are you'll really enjoy it and want to burn the boats.
I'm hearing more and more about the FP&A thing. It contains all of the qualities that you like and I'd like to think that it could have plenty of exit ops. You could help C level execs and your findings would drive major corporate decisions. You could your programming skills to build out a department at a smaller firm.
I know a good bit about gschool, which i believe is pretty cool. Feel free to PM me for a more detailed discussion. I wouldn't recommend going in completely cold though. Boulder Digital Works is another good one. If you do a program, make sure to do it in a place where there are plenty of tech jobs in the community as most dev hiring is now done by word of mouth (at least where I live). People in tech are avoiding recruiters because they add no value and don't get a lot of the nuance. Also, learn rails...there are 5x more jobs than candidates so it's not like it's hard to find something.
P.S. Here's a fun tech recruiter story: http://h30565.www3.hp.com/t5/Feature-Articles/Tales-From-The-Crypt-of-T…
[quote=TechBanking]I know a good bit about gschool, which i believe is pretty cool. Feel free to PM me for a more detailed discussion. I wouldn't recommend going in completely cold though. Boulder Digital Works is another good one. If you do a program, make sure to do it in a place where there are plenty of tech jobs in the community as most dev hiring is now done by word of mouth (at least where I live). People in tech are avoiding recruiters because they add no value and don't get a lot of the nuance. Also, learn rails...there are 5x more jobs than candidates so it's not like it's hard to find something.
P.S. Here's a fun tech recruiter story: http://h30565.www3.hp.com/t5/Feature-Articles/Tales-From-The-Crypt-of-T…]
Haha that article was great. "Hello, Mr. Kravis, we are expanding our fledgling Private Equity firm and have just secured $500mm dollars to put to work investing in an industry agnostic capacity. Do you happen to have any experience with the leveraged buyout process? If so, we look forward to hearing from you."
Programming ruined my life. Try looking down the barrel of 150K a year for life writing code in a small room for the rest of your days with unqualified and technically incompetent managers breathing down your neck, paying just enough to live well but never enough to go off and build something on your own a few years down the road.
The grass is brown everywhere.
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