Is it worth leaving banking if I have it pretty good already

1st year analyst at a BB, group placement went well for me last summer and I got into one of the top groups. Not a GS TMT/MS M&A kind of group, but my group is consistently top of the street in our coverage area. Loved the experience over the summer, loving it so far as well. Really good culture where the seniors seem to value our time, and because they're pretty well respected people in the industry they don't go into meetings with 100 page books trying to impress the client, so we end up with a lot less meaningless work. Not that we don't have long hours, but they're exclusively on stuff that matters. What I'm trying to say is this is about as perfect a balance as you can strike between a top group with great deal flow and simultaneously not a terrible lifestyle.

Everyone of the juniors leaves for PE, and I had kind of always assumed that was the next step because it would be foolish to waste the good opportunity now as an analyst, but starting to question whether PE will truly be better. People talk about moving for better hours or more interesting work, I feel like I already have a pretty decent balance of that and leaving opens me up to an unknown: what if the fund I land at doesn't have as good a culture? But at the same time, compensation could be multiples higher as a successful PE partner than for a successful banking MD.

How would you guys go about thinking through the decision to leave for PE or stay in banking? Whichever route I go, I enjoy the industry enough (in my limited time) that I really could see myself wanting to stay for life, so that's why this decision feels important to get right.

WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)

Comments (28)

Most Helpful
  • Associate 2 in PE - LBOs
Oct 24, 2020 - 9:58am

I made the move to PE, and one aspect I under-estimated was how much time can be spent managing portfolio companies and how draining it can be. While interviewing, I think I was too focused on getting to evaluate a bunch of potential companies to invest in and the buy-side just seemed "sexier." People always talk about how once you're on the buy-side, you're not wasting time chasing after clients, sprinting to meet other people's deadlines, etc. - and this is absolutely not true. We are still chasing after deals (several of which we lose), sprinting to meet bid dates and trying to position ourselves competitively compared to other potential buyers. On top of that, when a portfolio company starts getting stressed (like many have during COVID) it's up to you to help pick up the slack, get lenders comfortable, etc. I don't regret moving to PE because I didn't really like my role before, but if you enjoy your job now then these are all things to consider. Just go in with eyes wide open that contrary to popular belief, you're not just sitting in a conference room, laughing at sell-side bankers while you spend all day voting "yes/no" on potential investments and drowning in carry.

  • Intern in IB - Ind
Oct 25, 2020 - 6:33pm

How would someone starting as a first year analyst soon having to deal with accelerated PE on-cycle recruiting know if they'd want to stay in IB or recruit for PE?

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
  • Analyst 1 in IB - Ind
Oct 24, 2020 - 12:30pm

I don't really have the luxury to wait and decide - on cycle recruiting will start before a year. Do you mean that in the sense that if I wait a year, maybe I won't like my job as much as I do now and I'll be set on jumping for PE or the opposite, that in a year maybe I'll realize PE isn't the promised land

  • Intern in IB - Gen
Oct 24, 2020 - 10:46am

Do you think you might be able to tell us what group this is? Just curious. Don't need to know the bank! 

  • Analyst 1 in IB - Ind
Oct 24, 2020 - 12:35pm

If I tell the group it's pretty obvious what bank I'm at, and if I tell the bank it's pretty obvious what group I'm in. I'd rather keep some anonymity

  • Consultant in Consulting
Oct 24, 2020 - 2:22pm

OP, are you under the impression that -- if you wait to recruit for PE until you're a second year analyst -- then your chances at landing a good PE job are materially impaired? Just overall, is that the case? Because I get what you're saying -- it seems so odd to me that these new analysts are supposed to decide 3 months into their new job whether they want to leave it for a (somewhat) different industry. 

  • Analyst 1 in IB - Ind
Oct 24, 2020 - 3:08pm

That's my understanding and maybe someone else can chime in on this who knows more, but I've been talking to a lot of people lately that I went to school with a few years older than me who are now in PE, just getting an idea of how to think about things. And while everyone agrees that it's not impossible to get a top PE job off cycle after the main recruiting has happened, it seems like the consensus is you're better off trying on cycle and leaving that option open later if things don't work out. In general there are just so many more top firms with multiple spots open during on-cycle, vs off-cycle some firms are done, some have a spot or two left. Just adds another layer of the stars needing to align for you to get the ideal job you're looking for.

Oct 24, 2020 - 4:04pm

Alternatively, have also anecdotally heard it's easier to end up at a PE shop with a good culture/fit since you have more time to network and see what you're really interested in if you recruit off-cycle, but I don't have any personal experience so don't take my word for it

Oct 24, 2020 - 4:13pm

From what I've read on here, the common consensus is that it is normal not to pursue PE and to wait until the end of your first year to decide. I would strongly recommend waiting one year before you interview anywhere. If you interview now, your technical knowledge may not be up to par and consequently,  you'll ruin any chances you had at working at those firms.

  • 1
  • 1
  • Consultant in Consulting
Oct 24, 2020 - 5:16pm

Yeah, this would seem to be preferable (waiting a year into job before deciding if you want to jump).

And getting back to the issue above about recruiting on-cycle vs. off... can't you recruit "on-cycle" at the beginning of your second year, as opposed to the first? Or -- because you're no longer a first year analyst -- is that not considered "on-cycle" anymore? In other words, is it your "experience" plus the time of the year that makes it on-cycle? Or, as long as you're recruiting when the PE firms are recruiting, is that okay? (Which I guess is the crux of my question -- if you're recruiting as a second year analyst at the same time the first year analysts are recruiting, are you at a disadvantage and less attractive to PE firms because you're no longer recruiting at the "prime age?" This always seemed strange to me -- seems like you'd be more impressive/desirable as a candidate with more experience, as opposed to less).

Oct 24, 2020 - 6:34pm

I don't think you'll be less impressive as a candidate. A firm that doesn't give you a shot a recruiting because you did a year of IB is probably a firm you would not want to work at. I think many people that graduate and land an IB role fail to think about their long-term goals in the industry and are obsessed with following the prestigious cycle people on this forum glamorize.

A year in IB will give you an extremely transferable skillset, and knowledge of the industry and where you would want to go. I'm positive if you were to compete with an analyst that has less than 3 months of experience after doing a year of work, you'll walk circles around them.

Headhunters really care about your story and your technical knowledge. You can always tell the headhunter you wanted to give it a year before you rushed into things, and they'll buy it.  

  • 1
  • Intern in IB-M&A
Oct 26, 2020 - 6:02pm

"Headhunters really care about your story and your technical knowledge."??? You are a commodity in the job market and their job is to sell you

Oct 25, 2020 - 12:15am

I definitely do not believe in the greener pastures that is PE.  I'm in a really great group that I enjoy working with, and definitely don't believe PE is a holy grail many on here think.  This is a phenomenal thread to read to counter-balance a lot of the pro PE talk that is often discussed here:…

Oct 25, 2020 - 3:34pm

I deeply regret leaving my own IB rotation for PE, if that helps you. It is the single biggest career mistake I ever made. In my rotation I was working with good people (not always the nicest, but winners who were bringing and closing) and the work life balance wasn't great but not terrible. But I was learning! The exposure and training I was getting was top notch. My mistake was leaving a good (but not perfect) situation that I knew, to pursue greener pastures in PE, because OMG it's PE and I'd always heard PE was awesome, plus the PE firm team seemed like really nice people and they were building something exciting.  DUMB move.

In my ibank there was a structured rotation and training program, and we were put on a track to senior management.  Do your time, move up in ranks, get paid, get trained, move ahead.  In PE there is a massive amount of variance firm to firm. You need to think through so many permutations before joining.

I went to a firm that had nice people, but no training, and no structure for promotion. The leadership team is a partnership, and they'd been together for years. Penetrating that would be a massive undertaking. In the firm, management didn't share carry. So it was a massive financial hit. I found myself totally on my own to figure out how to learn the trade and I had to fight for my own place in the pecking order. I knew within a week I'd made a massive mistake, but I was unable to reverse it.

So when I hear you say "I've got it really good. I've got a nice team, good W-L balance, good exposure and training, and I'm moving ahead. I think the clock is ticking and I should move to PE."  It's like I'm hearing the 27 year old me. I want to reach back through time and give you a hard slap across the face for your own good. Do NOT screw up a good thing that you've got going for the theoretical better thing of PE.  PE will still be there, if you feel like you've had enough once your IB experience has run its course.

  • Consultant in Consulting
Oct 25, 2020 - 3:50pm

More insight that's great to hear -- thanks for sharing.

So where are you at mentally/professionally now? If you're still unhappy with your current PE position, do you have an exit plan? Would you consider going back to IB? And is that feasible?    

Oct 25, 2020 - 8:14pm

Unable to get back to IB.  The onramps are after undergrad or after MBA.  I did the latter. I had insufficient IBD experience and network to onramp back later. Hence my concern for you.  You need experience in IBD before you offramp.  Trust me.... PE will be there. PE to megafunds is more structured, but outside of that, PE is much more porous and approachable. IB is not. 

  • Consultant in Consulting
Oct 25, 2020 - 8:19pm

Hmm, sorry to hear that. You still at the same PE firm? Like you said, since PE's such a varied experience, maybe a different PE firm will give you better PE experience.   

Oct 25, 2020 - 8:17pm

path less traveled

Start Discussion

Total Avg Compensation

July 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (36) $363
  • Associates (209) $232
  • 2nd Year Analyst (121) $152
  • 3rd+ Year Analyst (28) $146
  • Intern/Summer Associate (101) $144
  • 1st Year Analyst (447) $133
  • Intern/Summer Analyst (357) $82