IB Good Exits - Not so much
Good article from efinancialcareers this week on the perils of joining PE
Once you arrive in the promised land of private equity, things aren't what they expected. Oops, the hours are just as bad as at Big Bank of the Universe or the Boutique Bank of M&A, and there are years of long hours and basic salary and bonus ahead of them before any prospect of equity ownership in the form of carried interest.
But what do you do when you've skipped to the exit option, and then you want to exit that too? Pre-pandemic, I met with a graduate of a name-brand New England prep school, Ivy League college, near-Olympic-class athlete, who had gone from two years atto one of the big four U.S. private equity firms ( , Apollo, or Carlyle). He quit his private equity job after less than a year because the working hours and lifestyle were no better, and he had no equity in deals.
Maybe he shouldn't have expected carried interest going in. But he would look at how much revenue the PE firm expected to generate from a deal he worked on (perhaps $400 million over the course of owning the company) and compare that to his few hundred thousand dollars a year in salary and bonus, and feel short-changed.
After a year or so, he left to sell real estate and tried to pick up one-off finder's fees from introducing companies to start-up PE or VC firms run by peers of recent MBA graduates. I don't know how he's done since the pandemic, but it seemed like a better bet than climbing the long ladder in private equity.