Long-term PE - Lifestyle


I would be interested in understanding what PE as a long-term career looks like in mid- and large-cap funds with regards to lifestyle, especially compared to MD in a strong bank or partner at an MBB.

Do you really work that much less - with such high stakes, I would think you don't get that much more downtime versus say a McKinsey partner.

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Mar 3, 2016 - 2:42pm

I can't speak specifically on mid to large funds but I've been in the lower mid to mid market space for a while and it will depend on the specific fund and where you are geographically (I feel like regardless of what you do people in NYC wear working all the time like a badge of honor) but you basically work all the time. The big difference is that your time is more your own and you control your time more than in things like IB, consulting or law where you have clients who call and say jump and you say how high but you still think about it all the time, travel a lot and are doing work (reading docs, talking to portfolio co's execs and investors, etc) but you don't necessarily need to be in the office 60+ hours a week to do it. And you can more easily schedule those times to fit your schedule.

I'm not an MD in IB but I know more than a few and a very good friend is (we're both early 40's as a benchmark and we went to college together so I've known him for a long time and he's the head of his group at his MM bank, so he's not just a regular MD, he's kind of the boss MD and reports to c-suite level folks) and I feel like having clients and needing to sell makes his life far less predictable than mine. I'd say we work similar amounts (he probably does more but it's not the difference between me working 40 hrs and him 70) but I don't have a client calling me up at all hours or saying I absolutely need to be in another city the next day (most of the time-still happens occasionally that I have to go somewhere the next day but not often at all). He probably travels a bit more than I do but I can typically plan my travel further out than he can. And I generally know when I'm going to be busy pretty far in advance (deal closing, investor meetings, an exit, etc). That makes a big difference as you get older and have a family or even if you just want to make plans with friends. He (and his wife) consistently need to cancel plans with us even for small stuff like dinner whereas I generally don't have to. I'd imagine that transfers to every aspect of his life. I'm never going to be able to coach my kids Little League team because of work demands but I can say I'm going to be at his school play next week or a month from now and I will be. Or I can make social dinner plans weeks out and almost all of the time make that dinner whereas my friend often tells us the day before or even the day of that he can't make it for various work reasons (and other mutual friends say the same thing about him so it's not like he's blowing me off). As an example, a couple of weeks ago I was going to introduce him to the head of a fund that operates in his space. I wasn't directly gaining anything from the meeting, it was completely beneficial to him and it was a casual meeting-drinks in NYC. He had to cancel a couple of days before because he had to be in whatever city he needed to go to. That doesn't mean I don't have the occasional fire drill but I feel like that's a big part of his life and I don't think he's an outlier. But he really loves what he does-financially he doesn't have to work another day in his life but he does.

There's a grass is greener myth that if you get to the upper levels of PE you're not working much, you fly around on your G5 to exotic locales and have Italian sports cars in your villa on the Med that's stocked with bikini models. Maybe Schwarzman is doing that but I guarantee that he's on the phone working 100 hours a week while doing it. Upper levels of PE are still stressful and you work a lot but lifestyle wise it's better than any high paying client facing business. At least in my opinion.

Mar 4, 2016 - 1:41pm


random question: If your friend reached out to you and said he wanted to move to the buyside, what would you say to him?

Leaving aside the reality of him being able to make the jump (IB and PE are similar if you compare PE to being a doctor but the skill sets are very different between sell side advisory and being an investor, especially as you go move up to more senior roles) probably not. What makes you a good senior banker and what makes you a good PE investor are very different character traits. Compared to banking, PE is grindingly slow and really detail oriented. In IB you're doing a deal and you measure your success on closing deals and producing revenue (simplistic explanation but for discussion's sake it's easier). Yes, you want to do good deals so that you gain a good rep and get repeat business, but you do a deal, go onto the next, keep in touch with that company and hopefully do another deal with them. And you want to do a lot of deals annually. You also only have to skim the tree tops on the details compared to PE investing. In PE, yes you do deals, but that's the only the beginning. You're stuck with those deals for 3-10 years. You actually own those companies so when you're doing those deals you want to read every document in the data room (or at least have an assoc/VP do it, but even at the senior level you're reading and knowing a lot of the important ones and I don't know how many people have done that, but reading hundreds to thousands of pages of contracts is not something everyone can do, or even wants to). Then you're knee deep in the shit of the companies for years. You're looking at success and failure from the advisory side thinking that your client is rocking it and may want to do an acquisition, get expansion financing of various sorts, etc., or that they're failing at something and you may get to sell their company or offer restructuring type of services. Those successes and failures are yours-you own them and they directly affect your comp/net worth. Most career bankers I know are are more risk averse than that and would rather concentrate on doing deals and not being a principal in those investments. Also, most successful career bankers-and I mean this in a positive way for the role-are much more ADD type and need 50 things going on at once that they can bounce between. I know it's a common thought on WSO that senior bankers are just the ones that failed to get over to the buyside but all of the successful senior bankers I know very purposefully chose their career because it's a fit for them and they really like what they do.

Aside from my long diatribe above, the comp wouldn't be worth it at his level. PE's a long game. Yes, you get a decent salary and there are bonuses along the way but you really make money in carry and you don't realize carry for a long time, and you only realize it if your fund is successful. You're not going to actually get carry for 5-8 years depending on the structure of the fund (the LP's get their money back first then waterfalls start kicking in, most LP's now require escrowing any early wins if you work on an American style carry, etc) so in the case of my friend or any senior person breaking, he's 42/43 and if he magically were offered an MD role with a good amount of carry in a brand new fund, he really wouldn't realize that carry until he was about 50. He'd probably be making more in his current banking role annually and there's the chance that the fund wouldn't perform and the carry would be minimal or nothing. Maybe half way through the life of that fund they raise another and that one wins but at that point he's in his mid 50's. PE carry works well when you start receiving it earlier in your career and have multiple funds going because income derived from carry is choppy initially until you have carried interest in a couple of funds in various stages of their lifecycle and are doing exits, the waterfalls are in your favor and you're deriving fees from a few funds at once.

Mar 4, 2016 - 3:03pm

Sorry, I just don't know much about search funds except for data based on second and really more like third hand knowledge. I hear there are more solid teams out there doing them with backing (it used to be more like a bunch of guys looking for a deal without firm equity support) but I've never gone down that route personally. I'd just be speculating.

Mar 4, 2016 - 12:42pm

Out of curiosity at what point to you stop planning stuff with your friend. I'd imagine your/family life is super busy and nights out are less to come by so a cancellation seems like it kinda ruins your night out so to speak. Are these more group things where one couple cancels but a few still go out so its not a big deal. Or do you not really mind if plans get canceled and you just stay in?

I guess where I'm going here is at what point does ones career lead to being socially black balled as a function of lack of reliability. Obviously there are nuisances to each relationship but more so wanted your take from a high level on what you have seen.

Mar 4, 2016 - 1:37pm


Out of curiosity at what point to you stop planning stuff with your friend. I'd imagine your/family life is super busy and nights out are less to come by so a cancellation seems like it kinda ruins your night out so to speak. Are these more group things where one couple cancels but a few still go out so its not a big deal. Or do you not really mind if plans get canceled and you just stay in?

I guess where I'm going here is at what point does ones career lead to being socially black balled as a function of lack of reliability. Obviously there are nuisances to each relationship but more so wanted your take from a high level on what you have seen.

I've known him since college and he's a really good friend (he was in my wedding party a dozen years ago) and I understand his job so I let it slide. Other mutual friends who work in non-finance jobs, some of whom are also from college, have given up though. They've said to me nearly verbatim that they just got tired of making plans with him and having him cancel way too many times so they just don't bother anymore. When he cancels my wife and I will just go out without him and we half expect him to cancel anyway. His wife has joined us solo more than a few times though because I'm sure he cancels on her constantly and we're all friends.

Mar 4, 2016 - 2:37pm

PE hours being better than banking is a myth - though I'm coming at this from a very narrow sample size. The stakes are much higher, it's FIERCELY competitive and gets more competitive each year (everyone is in the PE business now, and everyone wants to allocate to the PE asset class...) and the people are generally much smarter and more driven than in banking. How all of these factors sum to a better lifestyle is an urban legend perpetuated by the internet and 19-year-old kids who deify those in private equity.

If you're full steam ahead on a deal (which is going to be 80-90% of the time, if you're not doing deals in PE, you're shortening your own existence), you're going to be sending e-mails at 1am on Saturday morning - from Associate right up through whatever rank is below Partner. As a Partner, you're traveling around all over the place and on the phone literally 24/7.

Everyone should know this going in.

Mar 4, 2016 - 7:07pm

It is incredibly firm dependent in the middle market. Some VPs run entire deals with minor input from partners. Others are just there to monitor the associates. Some are given board seats. Some are not. We all travel a lot.

Biggest difference is that once you're a VP, you're definitely on the Partner track and have access to information that you otherwise might not see. I'm talking internal budgets, authority to authorize your own travel, large influence on hiring/firing decisions, long term strategic planning, etc. Essentially, your scope of internal responsibilities expands massively.


Mar 4, 2016 - 7:12pm

Question about PE lifestyle at senior level and/or exit opps (Originally Posted: 10/31/2012)

Typically you see exit opps questions in reference to IBD ->> PE, but I'm curious as to how PE guys do in work/life balance if they stay in or how they transition out of the industry.

Say for example I want to work a more conventional schedule once I start raising a family in my mid 30s-40s. I'm not saying I want to clock out at 40:00 every week but it might be hard to help coach my son's baseball team or whatever if I'm still consistently working 60+ hrs/week. I'm okay with the idea of working 100 hrs for a couple years as an analyst out of undergrad, but my biggest concern/fear about entering finance is the prospect of not devoting enough time to my family once I hit that particular stage in my life.

I know a lot of the guys on here are generally not in the age group, but if you could shed some light of what you gather from MDs, etc, I'd be interested in hearing your thoughts. Thanks.

Mar 4, 2016 - 7:14pm

And that aspect of the work definitely has an appeal to me. I have no problem trying to, as you put it, "source deals and find investment opportunities" because that is what intrigues me about PE. Putting in a couple hours on the weekend to work from home is okay with me. I want to work hard and I'm not trying to sound like a little girl about it.

I'm guessing I'm looking for other options as a backup plan in case I want to get out of PE down the road.

Mar 4, 2016 - 7:15pm

Honestly, it sounds like you haven't even graduated college. First do that, go into banking if you really want to do PE, then decide whether the industry appeals to you and you want to stay in it for the long term and then post this question onto WSO (by when you'll definitely not need to).

PE VPs/principals may have significantly better lives than sellside professionals at the same ranks, but often times that can still mean more than "a couple hours on the weekend" type work, especially when you're in final stages of diligence. Also being constantly involved in assessing new opportunities, flying to meet management teams etc., portfolio management related issues etc. all add up pretty quickly.

At most funds, especially in NY (I only speak from my experience), expect to put in atleast a total of 60 hours per week at that level (this includes traveling and all out-of-office I'm on an ipad type work that you often have to do). Outside of the region, I'm sure the work-life balance is much better but I can't imagine its a significant improvement.

Mar 4, 2016 - 7:16pm

A good friend (well good work friend, but same thing here) runs his own middle market private equity shop after years of being a Principal elsewhere. He is only in the office/actually on call 40-50 hours a week. However, he is answering emails late into the night, reviewing diligence docs, and generally on the clock 24/7. Also at senior levels, you end up doing a ton of travel, he does at least a week each month out of the office. So, can he see his kids and go trick-or-treating, yeah. Is he really any more free than anyone else in his firm/does he work any less? No!

Now, there do exist firms that value work/life balance and respect boundaries (within reason), where you will only get killed if something truly massive and last minute comes along. These firms don't just pay less, they tend to attract lower quality personnel (at the lower levels), which can make things more difficult for senior personnel.

As those of us with real jobs have said, there are no jobs that pay a shit ton and require very little work. You might have some more flexibility in the exact timing you do your work, but you will always be on the clock. Even when you do a market hours job, you still need to follow the news and pay attention in the off hours. To do well in any demanding field you will be busy.

You will always have to accept the fact that you might have to cancel your plans or not make it to "the big game."

--There are stupid questions, so think first.
Nov 15, 2019 - 10:57am


As those of us with real jobs have said, there are no jobs that pay a shit ton and require very little work.

If you live in America, there are very few jobs in ANY field that don't require more than 40 hours a week, and especially as you move up to manager levels and upward. All of the senior execs I work with regularly put in close to 50-60 hours a week plus a lot of travel. It's just a fact of life here.

Mar 4, 2016 - 7:17pm

I definitely appreciate the input, and it's correct that I'm still in undergrad. I'm certainly under no illusions about the real-world tradeoff between compensation and hours. I also don't have a silly presumption that PE means you can just coast as you gain experience/seniority just because you put in two years as an IBD analyst or whatever. I'm just trying to make sure, before I start focusing my efforts on getting involved in the profession, that it's the correct decision for me personally.

Mar 4, 2016 - 7:18pm
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