How competitive is it to make VP / Principal at UMM / MF PE?

Curious about the competitive dynamics / important traits of people who make it to VP at UMM / MF PE. Seems like there is a funnel of 1) some IB analysts decide to forgo recruiting for MF since it's essentially banking 2.0 2) PE ASOs don't see a long term career in MF PE, may move downstream, HF, out of finance

Would love to hear from more experienced ppl - does it come down to love for investing, grinding it out, being super smart / technical, etc.

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Comments (35)

Sep 11, 2021 - 1:16pm

From what I have seen from my professors, VP of top banks and institution. It wasn't just what the sheer capability to think of stuff, and pulling solutions and basic accounting theories out of mid air. It was also their long time networking and friends in the industry that helped them be there and for the firm to use them as a network node. Without this function any VP or principal would just be as good as a technical prodigy.

  • Associate 2 in PE - LBOs
Sep 12, 2021 - 12:13am

From what I've observed, there's a great deal of self selection. I've written about this before but it's not like out of an Associate class of 8, there are 8 Associates grinding for VP. The reality is that maybe ~1-2 of those folks actually wants to stay to VP. Most people develop a distaste for the job. There are some places that buck that trend (for example everyone I know at Bain Capital wants to return) but for the most part I'm of the opinion that it's generally less competitive than what the forum seems to think. That's not to say it's always possible, and there will always be competition.

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  • Analyst 1 in PE - LBOs
Sep 13, 2021 - 2:58pm

This is consistent with my observations as well. Most associates at sweatshop MFs will try and get out before they get locked down with carry. No one wants to end up being the 2nd-3rd year VP that realizes he/she hates life and wants to leave but doing so would leave massive comp on the table.

Most Helpful
Sep 12, 2021 - 4:12pm

The difficulty doesn't lie in competitiveness amongst your peers as people have mentioned it is largely self-selection. The real issue is related to timing and luck as it relates to headcount planning. VP/Principal needs are often related to:

(1) When the next fund is being raised

(2) How big it will be (based upon the performance of prior funds over which you have near 0 control)

(3) Which sectors or teams need a VP

(4) Whether the partnership needs to hit diversity or other LP requirements for a certain number of women, etc. at the fund

(5) Whether someone else from B-school, a portfolio company or another fund has already been lined up for the spot years in advance

As someone that very nearly pulled the trigger on getting back into private equity at the mid-senior level, there are numerous other considerations that will instantly ding people that they won't find out about until years later if ever. There is so much politics at large funds as it relates to seats / carry. The PortCo exec life is relatively simple though you obviously have less control over strategic decisions.

Sep 13, 2021 - 4:23pm

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