IB/PE 10 years after college

Hi,

I graduated HYPS 10 years ago. I did the typical route and started in M&A at a middle market IB.

I see a lot of people who seem to worry more then they should. It's okay to not have an offer your senior year. It's totally okay to start in the big 4 or corporate finance. You can still make it to whatever firm and lateral over.

The whole prestige thing matters a lot less when you get 5 years of experience. Arguably, same for the MBA. (Unless the firm pays.)

Feel free to AMA, but some of you need to take a deep breath. You don't need to be at MBB (I've worked with "no name" consultants who are making more than MBB). If you don't get Goldman it doesn't mean you won't ever go to PE or HF. Your GPA means little once you have experience.

Some firms actually prefer people with a different background.

For all of you discussing superday or career moves- I wish you the best of luck. Just remember your life is not over if you aren't at your favorite BB.

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Comments (64)

  • Associate 1 in PE - Other
Oct 15, 2021 - 4:52pm

Are you mid-level / senior in growth now? Would love to hear your journey post-banking and relevant learnings for success as an investor

  • Analyst 1 in IB - Gen
Oct 15, 2021 - 6:44pm

I'm about 2 months into doing ib at an eb and long story short sometimes I feel incredibly overwhelmed by the lifestyle and the work and wonder why I even went into this in the first place. Like I'm so busy pumping out deliverables I don't really get to do any of the thinking or analysis of the companies I work with at all.

This is kinda a rant but I guess I'd love to hear if you think this career path has been worth it and if you could share what was the most difficult time you've experienced professionally? I'm trying my best not to lose sight of my goal which was to become an investor someday but if it's just more of this idk how long I can do it. 

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  • Associate 3 in PE - Growth
Oct 15, 2021 - 6:48pm

Well it's worth it to me because I enjoy the work.

I found a stint in consulting/strategy pretty refreshing after IB. What is overwhelming you? Do you just feel pressured? No guidance?

Is PE what you want? Hedge funds?

I make basically 4.5x a BB analyst rn so I'm not the best example of success, but it is still plenty and I consider it with it

  • Associate 3 in PE - Growth
Oct 15, 2021 - 6:53pm

To add to my previous reply.

Yes, it was worth it imo.

You are two months in. I think it takes 6 months to feel stable with modeling skills and how the firm operates. Once your year ends you should really evaluate how you feel. It does get easier and the hours can be better if you switch firms in your future or exit to corp dev.

  • Analyst 1 in IB-M&A
Oct 15, 2021 - 8:53pm

Definitely echo this, I really haven't had much time at all to think during my first few months on the desk (though have done far more technical thinking than initially anticipated)

Oct 25, 2021 - 1:55pm

You're just two months in. No one is going to trust you with anything important. Don't overthink it; just work hard and absorb as much as you can.

Array
Oct 15, 2021 - 7:32pm

I liked your view on the start of the career. I have to make a related choice. Currently working in Growth Equity as an Intern for ~1 year in a small fund in Europe and have the chance to transfer to San Francisco for 1 year min.

I've been planning to get into banking to get the brand and te skills. The problem with that nice opportunity in the US is that I'd "lose" the chance to start as an intern in a BB and then do the classic 2 years.

Im not sure if I want to stay in GE / VC, that's where banking comes in handy with optionality to Corporate / consulting / PE, etc.

Curious to hear your thoughts on it, if IB at a BB / EB would indeed be more helpful for my career, or if I could start at GE and afterwards seek possible moves to Full time IB / PE / Consulting if I want to

  • Associate 3 in PE - Growth
Oct 15, 2021 - 7:39pm

Do you feel you're lacking a specific skill set?

How do you feel about the internship and your understanding of the work or responsibilities?

It's hard to give advice (I don't want to provide poor advice tbh)

Oct 15, 2021 - 7:48pm

Thanks for the quick reply!

I like the job. I understand well what we do and I'm have my peers trust. On the skillset, I do know finance enough for my job, but not for PE, for example. (Also, I'm from a STEM background)

That's a big part of my uncertainty rn, as well as having the "name" behind it. Even if I stay at GE for the long term, BX / GA hire primarily out of banking and might require a broader understanding of it (not sure if they can actually use modeling a lot though).

  • Investment Analyst in AM - FI
Oct 16, 2021 - 8:43am

What's your opinion on going in to Asset Management, on the Fixed Income side and essentially kissing goodbye to Private Equity and taking a 15-20% paycut compared to my IB counterparts? Still think it's worth it? I mean I could eventually transition over to a HF maybe? or bounce around the AM industry to other FI players but do you think it's a good career path?

Oct 16, 2021 - 10:35am

I don't see anything wrong with it. PE isn't for everyone and shouldn't be the goal, especially if you dislike banking.

I always think most people would like corp dev or something at a portfolio company.

I haven't done asset management other than an internship 11 years ago haha. I think it's a great field tbh. I'm not sure you can easily lateral to a HF, but maybe someone from a HF can clear that up.

  • Research Analyst in HF - Event
Oct 18, 2021 - 12:43pm

I exited to a buyside credit shop (e.g. PIMCO, Oaktree), and in my exp, I'd say its very heavily shop dependent. Because so many distressed credit shops have moved down into performing / stressed and a lot more traditional firms have expanded into tactical / distressed, it's more or less a revolving door between asset management and hedge funds on the loan / HY side (as opposed to IG). Pay matches skillset and firm performance, so while you might take a 15% cut upfront, it evens out around 2yrs in if you're good at your job. Because liquid credit is market driven, hours are typically around 60 or so with free weekends as well (firm dependent). You won't do any bullshit work that doesn't improve your understanding of cash flow (e.g. no formatting decks), and you effectively get paid to know things which is great if you enjoy learning. You won't get booted out to get an MBA, and if you're not restricted on a name, you can make personal trades and down the road possibly invest in the firm's funds / get carry / etc. There's a wide range though, so the more vanilla the strategy, you'll see less upside and less pay but more stability and better WLB; the more aggressive the strategy, the more you're expected to perform. The way I would frame comparing to IB/PE is that you can last a pretty decent amount of time in IB/PE without sourcing your own ideas or leading deals. You're expected to execute moreso than think which leads to shittier WLB but less mentally intensive work at the junior level with good pay. I would say at most buyside credit shops, you will have to think smarter (i.e. articulate your opinions as a junior), and pay is contingent on that.

  • Associate 3 in PE - LBOs
Oct 18, 2021 - 9:03pm

To piggyback on this, I used to work at a shop that ran two credit strategies: leveraged loans (all 1L, pretty much a CLO manager) and HY/distressed junior debt. 

Loan guys were out by 5:30 most days, 4:30 on Fridays, might've worked 1 weekend all year. A litte later around earnings, but really not bad at all. 

The distressed team (which from 2016-2019 generally meant HY performing given the dearth of distressed supply) worked harder, but still better than deal guys - usually out around 8 or so, could be there til 2am and on weekends when we actually were in a distress situation (and occasionally got tagged managing PortCos or sale processes if we came out with private reorg equity).

They got paid better as well (but much more variable)… I think the loan team was around $200-$250k at the analyst level (HF-style analyst title, so a few years of experience), with limited volatility (bonuses were more PE-style). Distressed looked more like $200-$600k depending on personal and fund performance and could vary a lot year to year. 

  • Intern in IB-M&A
Nov 4, 2021 - 6:35pm

Interning in buyside/mf liquid credit next summer and potentially considering taking it full time if blessed with a return offer.  Would you recommend a career in this space to someone starting out, or are young professionals better off in something more broad?

  • Analyst 2 in IB - Cov
Oct 16, 2021 - 11:34am

Thanks for taking the time to do this - really do appreciate it: 

1) What is your opinion on staying in IBD

2) What is your comp / net worth

  • Associate 3 in PE - Growth
Oct 16, 2021 - 11:37am

Well I didn't stay in IB so it's hard to speak past the VP level. I think a MD could better answer this, but If you can handle the grind it's great pay and sort of simple. I work for a PE firm now and am mixed on it. I also tried MBB for a bit. It's nice to have some change and I can speak for those two careers much better.

I also heavily invested once I became accredited and am worth about 12m with 3~ liquid. I definitely think IB is a great career, but I didn't like the sweatshop I was at. Most of my money came from being an early investor In a couple companies that IPO'd.I also funded a cannabis company that was acquired via earnout 

  • Analyst 2 in IB - Cov
Oct 16, 2021 - 1:43pm

Congrats - that's amazing stuff. Were these investments that IPO'd in your job or as part of your personal investments / network

  • Associate 3 in PE - Growth
Oct 16, 2021 - 2:28pm

They were all personal and not work related. I did use work programs to help with DD though

  • Associate 2 in IB-M&A
Oct 16, 2021 - 2:41pm

Fully agree. And frankly, with smaller firms, you have the benefit of true equity. One of my MDs hauled off $10MM in the LTM from his house in the Caribbean. Showed up maybe 5 times in total in the US

Oct 17, 2021 - 12:26pm

Thanks for this. Can you talk about your stint in consulting after IB? Currently in the midst of a similar transition myself (leaving IB as an associate directly to consulting). What were you seeking to get from the experience? What was the motivation for leaving IB? How do you view the decision in retrospect? How did it better position you for the future?

  • Associate 3 in PE - Growth
Oct 18, 2021 - 11:25am

I'm old (out of my 20s)Edit- I've answered comp I think but I make 300-500 depending on the year and some other factors. I have had years where I seem to make endless money and I have years where I barely made 300. In consulting I made around 180 and that was probably the worst comp. I did it as a way to clear my head and take care of my health. Sometimes less comp is a better life. (Short term)

Oct 17, 2021 - 11:52pm

Recent MBA graduate and associate at global IB (neither BB nor EB).

Thinking of becoming a career banker, not sure which fits better for me--either BB or EB.

Generally speaking...(all relative)

EB: More work and higher comp   
BB: Broad experience and higher chance to be D/MD

Any recommendations?

Oct 19, 2021 - 10:44am

I think the first question is do you have offers from a BB or EB, because that is the first step.  Just network with everyone and then if you get the opportunity to join one take it.  But, until you have offers at both there is no reason to ask which

  • Associate 3 in PE - Growth
Oct 19, 2021 - 10:24am

Yeah it honestly becomes depressing when it won't matter later. Blackstone doesn't give a fuck about your sophomore superday.

I think the internet has made these irrational fears worse. Plus all of you "kids" missed the the gold rush before 2008.

Oct 19, 2021 - 11:49am

Heard of some post MBA associates pulling absurd bonuses back in the day (2004-2006 specifically). According to a HSW grad I know (almost became a career banker before the D promotion, made a ton of $$ on the buyside since switching), it was harder to get into IB than consulting post MBA. Now it's the exact opposite.

  • Associate 3 in PE - Growth
Oct 19, 2021 - 12:00pm

It was insanely good.

Money went further back then and a lot of guys were making 300k in bonus.

Obviously it varies, but it was a good time to be in banking.

  • Prospect in IB-M&A
Oct 19, 2021 - 1:25pm

How do you deal with working in Big4/CF when it's actually not that interesting to you? When you know that it's only a step in your path?

  • Associate 3 in PE - Growth
Oct 19, 2021 - 1:28pm

I look at it like college.

You take some uninteresting courses for the paper.

You have to crawl before you ball.

There are sooo many IB M&A boutique / advisory. You're absolutely not stuck in big 4.

  • Associate 3 in PE - Growth
Oct 19, 2021 - 1:31pm

I didn't even get to interview at 5.

I'm sort of envious. I had one.

Seriously, you will be fine. 99% of your peers aren't going to stay in IB or PE very long. Do a portco for CF? It's good exposure

Oct 19, 2021 - 1:35pm

How did you end up getting into PE? What did you start out in and what did your career path look like? Hoping I get staffed on some portco projects would definitely be great experience. Open to any advice on how to make the most of it.

  • Associate 3 in PE - Growth
Oct 19, 2021 - 1:45pm

I'm like multitasking to an extreme so please forgive grammar errors above.

I can elaborate, but the key is experience and network.

Oct 19, 2021 - 4:42pm

Thanks for the reply man really appreciate it. It's inspiring and you're on a path that I hope to get to. I feel like networking and experience definitely the most important, curious whats you're opinion on B4 vs MBB. This thread has a lot of putting MBB on a pedestal compared to B4 and I'm curious if people actually care in the long run especially when the work and projects are so similar. Also with networking, did you network your way into PE or did people reach out to you after they saw the strategy work you were doing?

  • Associate 1 in PE - LBOs
Oct 19, 2021 - 5:20pm

How have you found PE (or growth equity, whichever you are in)? Sounds like the jury is still out based on your previous comment, why is that? On that note what's your view on building a career in PE vs growth equity?

Since you're 10 years out, what's happened to most of your peers - who have been happiest or lucked out the most? Any words of wisdom after looking back at the decade and how your peers (not just your level but above and below) lives have panned out (doesn't need to be about banking / buyside, can be more holistic life advice). With a net worth like yours I'm surprised you haven't thrown the towel in to do something else unless this is indeed your passion.

Oct 20, 2021 - 1:10pm

I can't emphasize this enough. I joined a BB in an IB role after working for a near Big 4 firm where I did valuations and went to school at a large state university a thousand miles away.

You may freak out a bit when you see kids get jobs and you don't. Just stay hungry and when you get the opportunity jump at it and give them everything you've got.

I think I did this right

  • Intern in IB - Gen
Oct 20, 2021 - 8:24pm

No offense but this would hold some weight coming from a person who didn't go to HYPS. 

  • Associate 3 in PE - Growth
Oct 21, 2021 - 10:26am

What do you mean that you see the opposite?

Are you above 35?

I just think most do not have perspective as a senior (and that's okay!)

My goal was to let people know that things can go your way. I didn't get good offers or in BB straight from college. I didn't meant to downplay anyone's difficulties or to come across as frustrating.

I guess the Ivy League helped, but No one is looking at education after 10-12 years. My cv starts with my skills and value addition for the firm, not my school.

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