Family Offices vs MFs

Hey guys,

I'm currently a second year analyst at an EB (Evercore / PJT / CVP) and looking to make the jump to PE. I've had a few interviews, mainly with MFs, and have a few upcoming with large family offices (think Soros, Dell, etc.). Obviously, this forum is full with info on the MFs, but I can't seem to track down much information related to these large family offices. Generally speaking, can someone provide additional insight into FOs, specifically in terms of exit opportunities, pay, culture, and ~prestige~? Any info would be greatly appreciated.

Also, as I am looking at both MFs and FOs, how would you compare the two opportunities? Obviously a very vague question, but what are the main benefits of one opportunity over the other? Do the two offer similar opportunities in the long run?

Thanks everyone for your help!

 

Not really educated on the topic, but would assume a family office would have better WLB? Potentially worse career progression as well since its owned specifically for someone else. Would to love hear more from someone who is more in tune with this.

 

Thank you! This is a very personal question, but do you think the WLB outweighs the potential sacrifice in prestige (and, in turn, career progression)? I'm trying to wrap my head around if pursuing FO in lieu of MF is worth it.

 

Also interested in this. How would your exit ops / career progression at an MSD compare to that at a KKR?

 
Most Helpful

Prestige is so unbelievably overrated. Most people in the real world, not on this forum, do not care that you work at a MF. They certainly don't know whether WSO thinks it's a Tier 1, Tier 2, etc. MF. Most people's knowledge of investment firms is basically just the meme:

they're all the same to most people

Solve for the highest paycheck, the best WLB, some mix of the two... but solving for prestige is a wild goose chase because 99% of people don't know and don't care. The only ones who care are in your analyst class with you, and they probably won't care in another year or two either.

 

What makes you say Wildcat is institutionalized? It’s like 10 guys subletting some office space in TPG’s office. They run a slice of Bondermans net worth, a bunch is in RE and public markets (FI and equities) and a sliver is in PE. From an asset allocation standpoint, he’s already massively over exposed to PE, so he’s not exactly running his own $4bn sleeve of PE on the side.

More broadly, the FO mandate is ‘stay rich’ not ‘get rich’. So it’s typically (even tho there is no typical in FO world) not dramatically over-allocated to direct investing and not much of a slugging mentality.

WLB for sure better. Economic model varies. Some are decent but pretty uninspiring comp-wise, others can be very attractive if you have ability to put a lot of capital to work (even at a jr level) and get paid off AUM you put to work and performance. Lots of unknowable family drama/infighting and sometimes the FO staff is just viewed as part of the help.

Unlike actual PE world, being at a $2-3bn FO is actually pretty scaled. Unlike managing institutional capital, there’s slim to no tail outcomes.

Also have to think about more practical outcomes like “what happens when Soros dies in like 3 years or Bonderman dies in like 7 years?” Etc. So from that perspective none of these places are institutions.

Pretty sure Lemkau was hired at MSD to turn it into an actual alternative asset manager.

I think Pritzkers, Mousse Partner, JAB are up there.

 

Really depends on the FO. Pretty standard information on MFs on this forum but there's a difference in being at Soros Fund Management and a no-name type of FO which may have a singular type of mandate. On one hand FOs could offer you a diverse experience with good upward mobility without the need for an MBA or whatever, but there are also some which could feel trapping given how narrow the investment mandate could be.

 

Do you happen to know particular FOs that have a strong WLB, while having a more institutional investment structure?

 

How do you see the longevity of your role if you wanted to stay and progression?

Always wanted to work at a FO for the best of what it can be, but the politics and such make a strong deterrent. Are there capital lock ups typically? What’s gonna happen if there’s too much political issue and how to diligence for that when joining a firm?

Any red flags at your current firm that you would stay clear of at the next // what are things you’ve realized once actually working at the firm vs the marketing they had toward you before joining?

Also are you in a popular geography (nyc/CA) or smaller city? Southern (warm) or no?

 

Sample set isn’t big since our classes tend to be 1 person in a year and we don’t hire every year but only one person has gotten pushed out and that was due to very poor performance. They’ve never implied that I’ll have to leave and in fact generally talk about my long term career. We will see how that actually plays out.

At the associate level at least no politics I’ve seen outside of standard office politics. Part of our diligence is about reputation though and we don’t invest in anything that could look bad in the news (e.g., for profit education, consumer lending, etc.)

EDIT: I thought about this more and I will add that there is one person at the top of our family office and there are some politics in the fact that they have final say on everything (since its their money). So everything is catered to one person and it specifically tailored to them. They’re generally amicable and open minded, but it’s still something to consider. If you don’t agree with their investment profile / them in general you won’t have a good time.

No real red flags. I guess two things I’d call out are (a) like someone mentioned the goal is to stay rich not get rich so with how hot the deal market has been we lose in a lot of processes since we don’t HAVE to deploy capital and we don’t want to pay crazy multiples which can be frustrating and (b) the volume is a lot lower so you’re getting fewer reps and I’d say in general family offices can be less technical in my opinion (no IC with 10 people grinding you down with questions and asking for a bunch of follow up analysis). Work life balance has been great though. This is a fund by fund thing, but at mine unnecessary work is pretty limited and everyone from MD to associate splits up work and I rarely every work late or on the weekends.

I’m in a “second tier city” (e.g., Boston, Chicago, Atlanta, Miami, etc.)

 

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