IBD vs PE - Long-term / Let the war begin

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iBankedUp - Certified Professional
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I've read a few posts on PE and found that it mainly involves searching for capital for new funds. There is also a considerable amount of time spent doing actual things related to the operations of the businesses and managing those businesses.

On the other hand, banking involves real-time market related work where senior bankers are active advising some of the largest companies and transactions. Bankers are economics drivers.

Is PE really better than banking at the senior level? How about even for a guy like Frank Quattrone or Micheal Klein who are more boutique with a specialty on advisory?

UPDATE: I would like to clear lifestyle differences, compensation (although there's some stuff out there on that), ability to challenge, prestige, interesting work, etc. What's better between PE and IBD long-term?

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Comments (48)

Mar 17, 2016

IBD and PE are two fundamentally different businesses that happens to have (some) overlapping skill-sets at the junior level, and that's about it. At a senior-level, it's as much consulting / operational as it is finance - e.g. forming a thesis regarding an industry or an investment (which extends far beyond a company's historical financial performance).

If you're a "deal guy" - you're very likely to see more transactions as a banker than as a PE partner. Your role will be that of an adviser and not that of a principal. Therefore, the compensation model is also very different. In banking, a top-tier MD at a GS / MS / JPM can net anywhere between $1-3mm / yr (a lot of that will deferred stock w/ lock-ups and clawback provisions). Your "at-risk" principal is $0 - you don't need to invest anything to generate that income.

PE is a completely different model. As a partner, your job is to discern good investments from mediocre ones (which includes finding the right industry, the right company, the right management team, the right timing, and the right price). All partners also contribute some degree of personal capital into the fund - so they're investing their own money as well (admittedly, once you cross a certain threshold, the majority of the capital you are investing is going to be that of institutional investors). Based on a 1.5% / 20% model... you're generated a stable "management fee" stream of income as well as a performance based payout that can be significant.

Let's do some quick math - a firm does a $500mm acquisition - let's say 5 years later, EBITDA grows 50% and you get some multiple expansion (timing / lucky) - that company is now worth $1bn. At acquisition, you only put up $200mm of equity + $300 debt, and by the time you exit you've paid down $200mm of that debt. So now the math is $200mm equity at entry - $900mm of equity on exit. You just generated $700mm of equity value for your LPs. Take 20% of that - $140mm goes directly to the partners. For a fund / deal of this size, you're probably looking at a firm with 5-7 partners. If you're the lead partner - you will also be entitled to outsize carry... you can do that math on that. So from an 'economics' perspective... a senior PE partner and a MD are (generally) not going to be on the same level. Goes back to the original point - completely different businesses.

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Mar 17, 2016
ibhopeful532:

IBD and PE are two fundamentally different businesses that happens to have (some) overlapping skill-sets at the junior level, and that's about it. At a senior-level, it's as much consulting / operational as it is finance - e.g. forming a thesis regarding an industry or an investment (which extends far beyond a company's historical financial performance).

If you're a "deal guy" - you're very likely to see more transactions as a banker than as a PE partner. Your role will be that of an adviser and not that of a principal. Therefore, the compensation model is also very different. In banking, a top-tier MD at a GS / MS / JPM can net anywhere between $1-3mm / yr (a lot of that will deferred stock w/ lock-ups and clawback provisions). Your "at-risk" principal is $0 - you don't need to invest anything to generate that income.

PE is a completely different model. As a partner, your job is to discern good investments from mediocre ones (which includes finding the right industry, the right company, the right management team, the right timing, and the right price). All partners also contribute some degree of personal capital into the fund - so they're investing their own money as well (admittedly, once you cross a certain threshold, the majority of the capital you are investing is going to be that of institutional investors). Based on a 1.5% / 20% model... you're generated a stable "management fee" stream of income as well as a performance based payout that can be significant.

Let's do some quick math - a firm does a $500mm acquisition - let's say 5 years later, EBITDA grows 50% and you get some multiple expansion (timing / lucky) - that company is now worth $1bn. At acquisition, you only put up $200mm of equity + $300 debt, and by the time you exit you've paid down $200mm of that debt. So now the math is $200mm equity at entry - $900mm of equity on exit. You just generated $700mm of equity value for your LPs. Take 20% of that - $140mm goes directly to the partners. For a fund / deal of this size, you're probably looking at a firm with 5-7 partners. If you're the lead partner - you will also be entitled to outsize carry... you can do that math on that. So from an 'economics' perspective... a senior PE partner and a MD are (generally) not going to be on the same level. Goes back to the original point - completely different businesses.

To be fair, you're describing at 4.5x deal which almost never happens these days.

Mar 21, 2016

4.5x deals never happens these days...? Forget about headlines regarding megafunds. There are a lot of middle-market players that are killing it and have these types of deals (information just isnt made public). I work for a large mm fund and we just had a deal that made 6x our money...

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Mar 18, 2016

Echoing the above comment I think this paints an overly optimistic picture for PE and a much more conservative one for IB. Though not as volatile, IB comp still varies a lot at the senior level. We have partners clearing low 8 figures a year and partners clearing low 7 figures a year. In general, PE cash compensation at senior levels is lower on an annual basis, but you can receive massive payouts through carry at the end of the fund's life. The above carry scenario is possible, but keep in mind during the recession there were also people whose carry blew up and received nothing. Yes, there were bankers who also got 0 bonus, but that's one year. Imagine getting paid nothing for carry you'd been waiting 5-7 years for. In general, returns are shrinking, so don't enter the field expecting 9 figure payouts. This is not a popular opinion on these forums, but comp is roughly comparable at the senior level. There are outliers in both industries.

Don't expect to be schwarzman or kravis. Those times are long gone and most of the people entering PE as associates will not make it to partner. Go into whichever field is more interesting for you and whichever field you think you'll do better in.

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Mar 21, 2016
throwaway82694:

Echoing the above comment I think this paints an overly optimistic picture for PE and a much more conservative one for IB. Though not as volatile, IB comp still varies a lot at the senior level. We have partners clearing low 8 figures a year and partners clearing low 7 figures a year. In general, PE cash compensation at senior levels is lower on an annual basis, but you can receive massive payouts through carry at the end of the fund's life. The above carry scenario is possible, but keep in mind during the recession there were also people whose carry blew up and received nothing. Yes, there were bankers who also got 0 bonus, but that's one year. Imagine getting paid nothing for carry you'd been waiting 5-7 years for. In general, returns are shrinking, so don't enter the field expecting 9 figure payouts. This is not a popular opinion on these forums, but comp is roughly comparable at the senior level. There are outliers in both industries.

Don't expect to be schwarzman or kravis. Those times are long gone and most of the people entering PE as associates will not make it to partner. Go into whichever field is more interesting for you and whichever field you think you'll do better in.

LOL this guys has no idea what he's talking about. Go talk to midlevel and senior guys at the top performing large MM PE funds in this current market and see how much carry is flowing through. VPs at these type of funds are pulling in 7 figures and senior partners are buying beach houses and yachts...

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Mar 21, 2016
ledger123:

Go talk to midlevel and senior guys at the top performing large MM PE funds in this current market and see how much ...

"Top performing" by definition is neither typical nor average, but rare. There are top performing funds, and there are zombie funds too.

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Mar 21, 2016
HedgeKing:

ledger123:Go talk to midlevel and senior guys at the top performing large MM PE funds in this current market and see how much ...

"Top performing" by definition is neither typical nor average, but rare. There are top performing funds, and there are zombie funds too.

You're obviously NOT in private equity. If you think that's "rare", then you'd be utterly surprised at how much money PE professionals make. Even at "middling" or "non-top performing" funds...

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Mar 21, 2016
ledger123:

HedgeKing: ledger123:Go talk to midlevel and senior guys at the top performing large MM PE funds in this current market and see how much ..."Top performing" by definition is neither typical nor average, but rare. There are top performing funds, and there are zombie funds too.

You're obviously NOT in private equity. If you think that's "rare", then you'd be utterly surprised at how much money PE professionals make. Even at "middling" or "non-top performing" funds...

For midlevel and senior guys maybe. But how many pe associates get to climb up to vp/principal and partner levels? I have seen pe associates getting kicked out after two years. I have seen some not being able to get back to pe after mba. I have seen some bouncing around different funds at associate level, never being able to move up. I have seen some end up in corporate development. I have also seen some give up finance altogether. Only a small number of them really achieve what you have described. And, ever heard of zombie funds?

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Mar 21, 2016
Mar 22, 2016

You overestimate this point time and time again. Do you really think the vast majority of PE associates are shit out of luck and left jobless after 2 to 3 years? With a background in banking and PE, most professionals are able to land on their feet and get jobs at similar size or smaller PE funds. If not, they take a step back and go back to banks who will gladly accept them.

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Mar 22, 2016
  • Yes they can get jobs at smaller PE funds, but smaller PE funds are a totally different story. So many of them set up just 1 fund and end up being unsuccessful in their next fund raising attempt, forcing them to shutdown. carry isn't the main question at these funds; the real question is whether you'll be out of a job after this fund's life cycle ends. Job stability at those small funds are a serious concern due to the uncertainty of their future fundraising aspects, especially if they do not have a credible track record (which many of those small PE funds don't, because if they did, they would have been successful in their following fund raising attempt which would boost them to the MM PE range).
  • Yes banks would gladly accept them, except when you enter the bank, that kid from Rutgers who was in your same analyst class who instead decided to take the A2A promote is now a VP and your staffer, when you are now a fresh off the boat associate. Once you re-enter IB, you start to realize that noone gives a damn about your 2 years PE experience and your Wharton MBA - you are a lowly associate and will be treated the same way as the UNC Kenan Flagler MBA whose pre-MBA experience was as a sales associate at Costco. Sure banks would gladly accept you, but the real question at this point is: would you want to go back given this change in circumstances?
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Mar 22, 2016

Which is exactly why most PE professionals DONT go back to banking. Said it was an option, but it's not common. Most PE guys would rather "die" than go back to the hellhole that is banking.

The point is that someone with 2-3 yrs of banking exp + 2-3 yrs of PE exp is an individual that is very desirable and marketable and should land on his/her feet somewhere (assuming said person is not a complete idiot).

I've been at my PE firm for 6 years now (associate promote to VP, on my way to principal) and have seen a fair number of my colleagues get promoted as well. Obviously, most do not. Want to know what most of them are doing? They're doing PE at other reputable, successful firms OR they're doing operations focused roles. Don't let the "difficulty" in getting promoted upwards in PE sway you into thinking it isn't a "viable" lifestyle.

Don't know why there's so much unnecessary defending going on for IB. I WAS a banker and although it sucked major balls at time, I never take it for granted because I learned a lot and met a lot of cool people. It also set me up for my current job, so in hindsight, I wouldn't change a thing.

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Mar 22, 2016
ledger123:

Obviously, most do not. Want to know what most of them are doing? They're doing PE at other reputable, successful firms OR they're doing operations focused roles ... .

Will they move up in the new funds? Most won't. Most of them would bounce around different funds, always at associate level, not being able to move up, until they finally give up, settling into corporate development or operational roles, or leaving to do something completely different.

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Mar 22, 2016

You're clearly clueless. So whenever someones moves around, they stay at the "associate" title? So there are 35 yr old associates out there? Get some real life experience and stop arguing on a board. I'm done.

Mar 22, 2016
ledger123:

You're clearly clueless. So whenever someones moves around, they stay at the "associate" title? So there are 35 yr old associates out there? Get some real life experience and stop arguing on a board. I'm done.

PE as a whole has much smaller vp intake (promote) than associate intake. That means most associates will never make vp no matter how they bounce around different funds.There are probably no 35 years old associates for they in all possibility gave up and left finance long before they turned 35.

Mar 23, 2016

Once again, just clueless. You're making broad, blanket assumptions because you don't know any better (actually that's very banker of you!) You're the classic guy that's desperately trying to hold onto and defend a job that 90% of finance professional view merely as a stepping stone.

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Mar 22, 2016

ledger, could you describe some of these "operations focused" roles your former colleagues are in now? Are you referring to PortCo's, or ops roles at startups/F500? What is compensation like in those roles for people with IB+PE experience?

Mar 21, 2016

I don't think you read my post. I'm not denying the ceiling in PE is higher or that the top performers are crushing it. I'm saying its disingenuous to tell people looking for information on the field that yachts and beach houses are the norm. They're not. And they're buying yachts with payouts from carry. Annual salary+bonus is generally lower than banking as I said. People spread the carry payout over the prior year to derive an effective annual pay, but I'm just noting that this carry is far from guaranteed.

The point is that chances are most wont make it to VP or partner, most won't get into these funds, and returns may not be what they currently are by the time they do.

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Mar 21, 2016
throwaway82694:

I don't think you read my post. I'm not denying the ceiling in PE is higher or that the top performers are crushing it. I'm saying its disingenuous to tell people looking for information on the field that yachts and beach houses are the norm. They're not. And they're buying yachts with payouts from carry. Annual salary+bonus is generally lower than banking as I said. People spread the carry payout over the prior year to derive an effective annual pay, but I'm just noting that this carry is far from guaranteed.

The point is that chances are most wont make it to VP or partner, most won't get into these funds, and returns may not be what they currently are by the time they do.

of course theyre not the norm. but bankers getting 8 figure salaries is also not the norm.

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Mar 21, 2016

I didn't say it was. In fact I explicitly said it was not common (if you actually read my posts). I was just noting that compensation in investment banking is also volatile.

There's no need to be so confrontational. I'm just trying to provide the other side of the coin that is not always represented here on these forums. Chill

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Mar 18, 2016

There are very, very few IBD 'partners' clearing 8 figures. The only individuals who are doing that are (a) guys who started their own advisory firm and are therefore de facto owners of the business anyway, or (b) partners at Goldman and maybe a few Vice-Chairman level positions at JPM / MS - but even then, the vast, vast majority of MD's are not clearing $4mm a year.

4.5x deals don't really happen in the mega-space anymore, but they do happen in the upper MM / MM space where the deals are a bit more growth / platform oriented and you're not paying premiums on public take-privates. Still, the norm at a few of the upper MM firms I'm thinking about is 2.5 - 3x - for the top quartile funds.

At the end of the day, IBD is a sales / marketing oriented job. PE is a deal / investing oriented job. There's going to be some overlap, but one who is good at one does is not necessarily good at the other.

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Mar 18, 2016
ibhopeful532:

At the end of the day, IBD is a sales / marketing oriented job. PE is a deal / investing oriented job. There's going to be some overlap, but one who is good at one does is not necessarily good at the other.

That's an interesting way to put it. Whose responsibility does negotiating terms fall on? I would say that is pretty deal heavy versus marketing/sales.

Mar 18, 2016

Well yes, if we're speaking strictly about BB firms, then 8 figures is extremely rare and limited to a few rainmakers at top groups. It's not common, but much more feasible at EB's where group structure is more lean.

Negotiating terms of a deal is actually quite related to marketing/sales oriented in my opinion. I would add though that the advisory side feels distinct from sales/marketing and is actually really cool. One of our MD's is the go-to guy for the CEO of one of the largest companies in the world whenever he wants advice. Must feel great.

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Mar 20, 2016

Don't expect to be Schwartzman or Kravis. Those times are long gone and most of the people entering PE as associates will not make it to partner. Go into whichever field is more interesting for you and whichever field you think you'll do better in.

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Mar 20, 2016

Look - it's investing versus deal making. In investment banking you are a trusted financial advisor. So if a client wants to raise debt or equity, or if they are considering inorganic expansion, you will be their advisor. If a client needs something - really anything - you will be responsible for making them happy.

In private equity, you are not an advisor. You are an investor. You are seeking out great investment opportunities. It is very diligence focused. Some people find this to be a more intellectually rewarding exercise because you are not beholden to a client and are able to develop your own thoughts about an investment opportunity.

It really just depends on what floats you boat. There are also obviously conversations around compensation and lifestyle that factor into the conversation as well. In terms of compensation, it is just plain true that you can make more money in private equity. While associate pay may be neck and neck, the ceiling in PE is significantly higher.

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Mar 20, 2016
SmokeyG:

While associate pay may be neck and neck, the ceiling in PE is significantly higher.

But the career risk in PE is much higher. Many PE shops kick out pre-mba associates after two years. Even if they make post-mba associates after b school, the chance of moving up the ladder is still small. Some PE associates would bounce around different funds at the associate level. Many end up in corporate development.

PE associates tend to do less number of deals than IB associates. Some PE associates do not get to close any deal in two years. This would put them at severe career disadvantage when they get kicked out after those two years.

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Mar 20, 2016
HedgeKing:

SmokeyG:While associate pay may be neck and neck, the ceiling in PE is significantly higher.

But the career risk in PE is much higher. Many PE shops kick out pre-mba associates after two years. Even if they make post-mba associates after b school, the chance of moving up the ladder is still small. Some PE associates would bounce around different funds at the associate level. Many end up in corporate development.

PE associates tend to do less number of deals than IB associates. Some PE associates do not get to close any deal in two years. This would put them at severe career disadvantage when they get kicked out after those two years.

That's totally true. Most go to business school. Some firms hire a lot of people back. Others don't at all.

When you say "career risk" though, keep in mind that someone who has worked at a top tier bank and a PE shop and has gone to an elite business school is not exactly going to have a ton of trouble finding a job. I wouldn't consider leaving banking for PE an overly "risky" move.

Mar 21, 2016

I don't think that leaving banking for PE is a risky move, I agree. If you like PE more, then you should absolutely switch. To address comp, I think that many people chase PE for the comp ceiling without understanding what the averages are. Yes, the ceiling is higher in private equity, but with that added height comes added risk. Your fund might not perform, you might not get promoted to partner, you might not even reach a position that gives meaningful carry, etc. There are rockstars in PE for sure, but how many do you not hear of that fall flat? I think risk adjusted comp is very similar for senior members in both industry, so I don't think it should be the primary factor for making a decision.

Even though I didn't find diligence work to be particularly intellectually stimulating, I accept that as a valid reason for people wanting to change over. However, I feel like most people these days care less about the work involved and see PE as an obvious career path to change to for the perceived lifestyle improvement and compensation potential. Even I was guilty of this, but I stayed in banking and have no regrets.

I really don't think there should be a war over this. It's not Pepsi vs. Coke. These are fundamentally different industries that suit different people. If you like advisory work and doing deals, go to banking. If you like investing and the like do PE.

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Mar 21, 2016
SmokeyG:

In private equity, you are not an advisor. You are an investor. You are seeking out great investment opportunities. It is very diligence focused. Some people find this to be a more intellectually rewarding exercise because you are not beholden to a client and are able to develop your own thoughts about an investment opportunity.

corporate finance advisory = diligence on firm-specific opportunities?

Also, when you say lifestyle, what do you mean? From what I've gathered, the hours in PE are simply just more flexible, not really better. As an example, you'd be home at 12am going over some management cases or flying around the country will also require devoted time.

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Mar 21, 2016

Echoing the above comment I think this paints an overly optimistic picture for PE and a much more conservative one for IB. Though not as volatile, IB comp still varies a lot at the senior level. We have partners clearing low 8 figures a year and partners clearing low 7 figures a year

There are very, very few IBD 'partners' clearing 8 figures

Seems like a classical case of the blind leading the blind here. My experience is that a lot of MDs and partners are hesitant to share their total compensation. A so-called rainmaker clearing 8 figures hardly even talks to analysts, let alone share his total earnings over the last year. Unless his dad is an MD, I highly doubt 'IB-hopeful' has a solid grasp on what managing directors at the bank he hopes to get a job at are clearing.

I am a third year associate in a field comparable to investment banking. I am rather close to a few partners at my firm with whom I regularly go for a game of squash or have drinks with. None of them -ever- mentioned or even hinted at what they make on an annual basis. You can do your calculations and come up with an estimate, but partnerships are often structured in a peculiar way (this much I have been told). I can imagine that megafund partners have the upper hand here, but I am completely in the dark about total compensation at these levels, and so are most of you.

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Mar 22, 2016

Comparable but not actually IB? Not sure what you're talking about but IB culture is very much comp focused. It doesn't take being in the inner-circle to know pretty much what everyone in your office makes.

Mar 22, 2016

Agreed. People don't directly tell you to your face their own comp, but everyone ends up finding out anyway. Gossip is the office life blood, and compensation is probably the favorite topic. There's a VP in the inner-circle of my group who is very privy to comp in our group. Somehow every time I end up working with him, the conversation ends up getting steered by him toward comp. It's been very informative...

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Mar 23, 2016
Mephistopheles:

Comparable but not actually IB? Not sure what you're talking about but IB culture is very much comp focused. It doesn't take being in the inner-circle to know pretty much what everyone in your office makes.

If that is true, then why are there always myriads of people arguing on these boards on how much you make as an MD / Partner with numbers that are extremely far apart from each other? I can hardly consider 'a friend of a friend heard this from his MD' a reliable indicator. My experience is that compensation is often overblown, even between close friends.

  • Anonymous Monkey
  •  Mar 21, 2016

Go to the NYC ACRIS/Property records website and search their names. You'll realize that a lot of the MDs WSO glorifies are just upper middle class residents of the city (if they even own property in manhattan). The MDs I've worked under (GS/MS/JPM/EB) live in apartments in the 1-2 million dollar range, while group heads/partners live in apartments in the 3-5 million dollar range (60% + financed through mortgage).

Mar 21, 2016

If only 5-10 guys are MD's at firms with lots of VP's & Associates we should spend more time discussing differences in comp/lifestyle/responsibility at the VP level as the vast majority of people in these respective fields top out at that level?

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Mar 21, 2016

Essentially, if you have a risk averse personality, IB is much more suitable than PE.

Best Response
Mar 21, 2016

Hey guys. Chill with the MS. We try to be helpful and provide as honest advice as possible based on actual experience in investment banking and/or private equity. If you don't like it, tough. There are great things about banking. Also some unattractive ones. When people ask us to highlight both on a long-term basis, that is what we do. If you stayed in banking, that is great. The fact that some people leave because of attractive qualities in PE isn't an existential threat to your ego...unless you let it be.

If we receive MS every time there's some honesty, then you can take your advice from some high shcool shit who masquerades around as an investment banker on here.

Sorry if we hurt your delicate little feelings.

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Mar 21, 2016

SB'd you to balance out the MS :D

Mar 22, 2016

Really interesting thread. Would you fellow monkeys say that long-term, IBD is a more secure career path than PE?

Mar 22, 2016

Can anyone else comment on lifestyle, role, interest, or other uppers to either field?

Mar 22, 2016
iBankedUp:

Can anyone else comment on lifestyle, role, interest, or other uppers to either field?

All of the above has been beaten to death on WSO

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Mar 22, 2016

I hear pro baseball pays pretty well, you guys should try and do that. Do you like baseball? Do you have arms? Have you ever watched the natural? I'd avoid pro golf though, top guys make a ton but the lower tier is stuck playing golf for a living for mid 6 figure pay, pretty risky career.

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Mar 22, 2016

Most people from my undergrad class six or 7 years ago that did banking plus PE after analyst stint are now either in lesser pe funds (than the fund they were at immediately after ib analyst) or completely out of finance all together strangely. Obviously the ones that managed to move up at good PE shops are crushing it and making more than those of us that chose to stay in banking, but they are rare to be honest and super high calibre people. I would actually bet that the group of us that stayed in banking after analyst on average have more money since we're all either senior associates or vps in ib now. Many of us also have pretty decent lifestyles relatively since we can always just dump all the work on analysts (sorry analysts) and new associates..

Not sure why people are arguing though, both jobs have their pros and cons depending on personality.

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Mar 26, 2016

I'll give you a long term perspective. I started about fifteen years ago in what was back then considered as a top tier firm and group, and out of a group of about fifty analysts, this is what happened.

  • about 20% are bankers. Of those 20%, about half are MDs, and the other half are Ds/SVPs trying to get made up. And again, I'd say half are at tier one firms, and the remainder at tier two firms.
  • about 30% are in the investment management industry. Ranging from reasonably high quality to special situations funds, to start up funds, to vanilla mutual funds, to family offices. I'd say one guy has done really well and the rest have had middling careers.
  • many people went to private equity, including tier one firms. very few stayed on. There is one industry vertical head at a tier 1 firm who has done extremely well. The rest are all either working for no-name firms or are struggling to make partner in the present environment.
  • about 25% are in corporates, and almost all have done very well, ranging from the CEO of a small consumer products company to the COO (and previously CFO) of a PE backed SAAS company to some VP level roles at larger companies. It has been more career rewarding than financially rewarding to date, although in many roles, there is a lot of upside
  • about 10% have gone to work for family businesses, reflecting the demographic of the class. Some of these individuals are very rich indeed, but that's different
  • the rest are a mixed bag (consulting, the clergy, etc.)

From a financial reward perspective, the guy who did really well at his HF and the one PE guy are probably at the top. Other than that, its the bankers and particularly the ones who have made MD that have done very well. I'd say the people at the corporates will catch up after a while.

Bottom line - PE is a shrinking industry and while there are a few people for whom its very lucrative, its not an easy path, and even for top candidates in or out of banking, its a long, hard road to be successful and / or make real money.

Also, how well you do in your job is more important than what job you do. The banker making 8 figures a year consistently is pretty much as rare as the PE guy with real carry who has a serious exit, and both will do pretty well. The middling MD making 1.5mm a year does not really have an equivalent elsewhere though.

I found the guy up the page talking about a 4.5x exit to be absolutely ludicrous. In my experience, for everyone so lucky to be the partner on that trade, there are five people thrown off the island. And even the partner on that trade has to share most of his economics with his founders who started out in the eighties.

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Mar 26, 2016
mergersandacquisitions78:

I'll give you a long term perspective. I started about fifteen years ago in what was back then considered as a top tier firm and group, and out of a group of about fifty analysts, this is what happened.

- about 20% are bankers. Of those 20%, about half are MDs, and the other half are Ds/SVPs trying to get made up. And again, I'd say half are at tier one firms, and the remainder at tier two firms.

- .

Awesome post, SB-ed!

Not to pivot too far from the topic but of those in banking, do you have a perspective on whether those in product (M&A, lev fin, etc) did better or worse than those in coverage? I've heard that being an M&A banker could be tough in the long run since there's not as much industry expertise developed. Thanks!

Mar 26, 2016
Mar 26, 2016
Mar 26, 2016