Move to PE now?

I want to echo Marcus_Halberstram's comments. AUM are really not the defining factor by which you should choose a PE fund. In addition to his list, realize that different PE shops will work you different hours. The place I'm going to has 50 - 60 hour work weeks and no weekends. Some equivalent paying jobs have 70 - 80 hour work weeks.

Like Marcus says, comp should really not be the deciding factor in where you choose to work at the junior levels. Pre-MBA positions you should be more worried about building your career and your reputation because in 10 years, you won't care about how much you made as an analyst/associate.

~~~~~~~~~~~ CompBanker

Thanks for the comments, but I would still like some advice on whether or not to do this. I mean it is not like KKR and Apollo are just waiting to hire me, but I want to maximize my odds. Has anyone gone through this before?

I am consistently putting in 85+hrs, and they told me I would be working between 65-75hrs. I know AUM doesn't define a fund, but even I hadn't heard of it until recently...

Anyways, comments are appreciated..

Try to reach out to somehow get connected with someone at a mega-fund and gauge the likliehood of getting there VIA this PE shop and getting there VIA your current gig. My (possibly flawed) perception is the megafunds go for extremely pedigreed candidates... H/Y/P, GS TMT/UBS LA. The few people I know, are from these backgrounds, and they have some kick ass deal experience.

I'm not too familiar with the possibility of lateraling from a lesser fund to a mega-fund. Thats why its probably best to try to reach out to someone whos already where you want to be.

i am definitely not seasoned enough to give you advice but wouldn't doing another year at your BB open up many more doors for you i.e. the prestigious like hellman, golden gate, jcf? I interned at a PE firm with $500mm and it was good, the guys there were all ivy leaguers, pulled good hours and got paid good. but that was it - it was good not great. deal flow was good, not great. you had to be in the industry for a long time to recognize the firm's name. but if the firm is new and you think you can grow with then yea, seems like a good opportunity. do you hate working at your group or is compensation the primary driving force in you interviewing after your 1st year or something else?

Better lifestyle, good pay, not sellside slavery. What's not to love? A big name isn't everything.

I'm in S&T not IB or PE, but being on WSO for a while, it seems that in this environment (according to previous threads) the more well-rounded you are, the better candidate you are for a mega-fund (for PE). Hence, you already have IB experience, be it 1, 2, or 3 years you get the same skill set and environment. By now getting pre-MBA PE experience, you have another trait that will look favorably (You will have IB experience if that is what the fund is looking for, and if they want previous PE experience, you have that as well.)

...but I don't see why people are so overly concerned with doing PE at some mega-fund. Super-sized deals are a thing of the past and were never much more than a "whose got the biggest dick?" contest.

I feel like a mid-market fund with decent hours and good pay could be solid. You'd probably have a better shot at promotion and be able to learn more of the hands-on shit than at a giant shop where you are still a cog in the machine.

To each his own, but those are my thoughts.

I think the reason I (and others) want to work for a mega-fund is the same reason that people want to go to an ivy league school...although you learn the same thing, the name brand stays with you foreever.

As for the reason that I am considering leaving... well we let go of a couple of people, which means I am putting in ridiculous hours, and I am not even triple-checking my work. There was a period of 3 days where I didn't go home. I just slept in the office in the sleep room.

Anyways, I think I will go ahead and make the move, I just don't want to burn bridges, so I guess I will have to tread lightly.

...starts to drop pretty quickly when quality of life drops. We let go people at my place as well and the remaining analysts essentially never go home. It's become hell on Earth.

I'd take it in a heart beat.

Yeah, I've consistently heard that life at the mega-funds is not much different then sell-side so far as quality of life/hours go.

Then again, its pretty fucking kick ass to work at KKR/Carlyle/Apollo.

if you work for a KKR or other top mega-fund you can always get into a smaller fund later.

MoneyKingdom, I wish I was like you, I'm such a dumb fuck I can't land any PE offers.

http://morningcereal.wordpress.com/ Morning Cereal.

"Nicely done! On par with LSO,"- Duke University student "Hilarious..!!"- British man

gametheory, are there lots of funds with lifestyles like yours? it sounds amazing

Not to beat a dead horse, but I agree with TheKing, GameTheory, and CompBanker.

It's all personal preference, but I would prefer having a life rather than having a prestigious name on my business card (provided that the smaller, less prestigious fund was still a legit fund and actually had dealflow).

Striving to have a certain name on a business card/resume seems a little insecure to me.

Again, it's personal preference, but if I was in your situation, then I would accept the offer at the $500mm shop rather than waiting for a potential mega-fund offer.

I personnaly wouldnt trade my current shop for a job at a mega fund...while the pay is slightly less I would argue that my deal experience, daily contributions and level of responsibility are much more meaningful than if I were at KKR. My shop believes in a very flat hierarchy where the entire deal team is intimately involved in all aspects of the deal process. Ive managed to maintain a great relationship with family/friends/gf while staying in great shape (time for the gym, golf, pick-up sports leagues, etc.) and making a ton of money. Enough cannot be said about the quality of life issue and the culture of your group. The buyside is great because facetime is less important and you always have a banker/lawyer/consultant to call on when you need assistance. How many guys at mega funds/BB IBs can honestly say that they enjoy going to work everyday? Ive been at my job for almost 4 years and i love going to work.

Also, I feel like you learn everything you need to learn during the first year of your IB analyst stint anyway. With deal flow the way it is how many more pitch books do you really want to make?

I am with you guys on this one.

When you get more experienced and consequently lose that initial "illusion" with the corporate world or what I call the "romantism" or the "honey moon" is over, you step back and realise that having a life is much, much worthier than any fancy job tittle or business card.

Remember that your loved ones or family members don't care about the company you work for or the tittle you hold in your business card - they like you the way you are and your uniqueness.

But I agree with someone that wrote you are better getting the PE offer because then you'll have a BB banking experience + PE experience (even if that's not a mega-fund, at the end of the day it's PE anyway - better than not having any experience).

To echo what a few others have already said, it really depends on what is most important to you. Do some research on the firm, and then figure out where your priorities lie. Are you more concerned with the name of a firm, than your work/life balance, or the quality of work that you may be responsible for, then definitely hold out. Keep in mind, however, that working for one of the top IBanks does not in any way mean that you are going to walk into KKR, or any of the other top P/E shops - working there obviously helps quite a bit, but it isn't a sure thing by any means - if that is something you truly want, then by all means hold out another year and make it happen. I know a few guys 1st year analysts and associates that were both completely burnt out by the end of year one and would have definitely jumped at the opportunity to go to a decent PE shop and make a nice buck. Also, is this your last stop, or are you perhaps planning to go back to school or pursue something else at some point? If so, then you have to decide what will help you in those pursuits more, will potentially working at a big name PE shop help you any more than this PE shop - I don't know. Also, how important is the work/life balance - if M&A heats up again, you may find yourself missing those 85/hr weeks and wishing you had chosen the PE shop.

At the end of the day, you're in a situation that most bankers/aspiring bankers would love to be in - take all of the time that you have, make a decision (it'll be a good one) and enjoy - as long as you don't look back with regret, you'll be just fine.

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This topic reminds to the quote of my professor, "The longer you stay in I-banks, the better you are". I think it's easier for a person to move from IB to PE than the other way around. But this is just my 2 cents, since I am about to start my career.

IMO, there are mid-market buyout shops that most people never heard of that have returns that are insane... AUM are under $1bn but with the returns being generated at these small shops on a fund that size, the carry was insane AND it was going to the team, not to line KKR's already bulging pockets...

If you're looking to do real PE, ie create value in a transaction, go to its original roots, them small cap- mid cap PE is the way to go... If you're willing to walk around just to say that you work at KKR where a megabuyout struggles to generate 2.0x invested, then sure that's cool, just let me know how it feels when your carry is 0.00001%...

It also comes down to how close you want to be to the deal because lets be serious, having an army of 25 people working at it from operations, finance and strategic angles is not the same as having a team of 5 plus the diligence team gutting the F*CKER to pieces... yes, your LBO model will be INSANE! but so was chryslers and look how useful that one was... If your looking to go to these buyout shops to build insane buyout models, don't waste your time, deal success comes from experience and pure negotiation, not a model at the end on a 100pg memo presented to the committee...

Go for it, you only live once so you don't want to spend your time as an IB analyst if you've got a job lined up in a reputable fund where they're going to pay you more to work less, it's a no-brainer.

I think the point has been made well enough above that nobody who actually matters to you cares about where you work.

Good luck.

Thanks for all the input, I took the offer and start in July.

OK.

First, IMO, name has very little to do with it. You meet a girl somewhere or run into an old friends parent's and they ask you what your upto, and you say you work at KKR or Carlyle Group and they will have no clue what you're talking about. You tell them you're at Apollo, and they'll think your in the space program. You tell them you're working at Toommy Lee and they'll either think its some chop shop family law practice in Charlotte or you're selling hollywood sex tapes. Tell them you work at Hellman Friedman and they'll think you're selling condiments. As funny as that may sound, thats probably 99% true.

As someone mentioned before, the "prestige" factor wears off once you're there, its only when you're looking in from the outside that the name seems to have a glowing halo around it. So of the few people in your life who may know what KKR is (I can count them on one hand), most are probably at the same level as you, so you're not impressing anyone.

Second, all of you are full of bullshit. Are these investment banking analysts and analyst hopefuls trying to tell me: why would you want to do something if your life will be a living hell? You join a mega-fund for the same reason you joined investment banking, to make a sacrifice early on and then reap the rewards later.

Third, many of the people on here went to target schools. Why would you do that? You could have gone to a state school, spent less money, enjoyed life more, worked not quite as hard, and aced your classes? But you chose to go to H/Y/S/P, wharton, cornell, ucb, umich, wherever else you guys went.... because of a few reasons.... the name/reputation, the experience, the people you would be amongst, and the opportunities after.

People want to work at these places for the same reason people want to work at RennTech, DE Shaw, etc... no one thinks it will be easy, no one goes into this field, especially at a junior level for quality of life.

Most of you dickwads (with the more informed monkeys on here being the exception) bitching about how its so insecure to gravitate towards a name, are acting as if you have a choice. I'm sure you turned down an offer from KKR and Carlyle en route to working at Rubenstein & Co. I have many a friend who tried getting into banking, but for whatever reason didn't make it, and now if I have a conversation with them their attitude is: I would never do banking/its just being someones bitch, as if they had a choice.

I'd want to work at a top-shop for the same reasons people pick standout groups/banks over other offers. You want to work at the best, you want to be around the best, and learn from the best. You want to be associated with something that has been doing some of the most historic deals on wall street. I don't think the fundamentals you learn will vary between a sexy LBO and an LBO of a group of nursing homes in the mid-west, but its more about the experience at those shops. You've heard about them for a reason.

Im sure you will come out of the woodwork declaring those shops aren't the best because Sanderson Capital had a 36% IRR last year. Generally speaking, without getting down to nitty gritty foot noted league tables, everyone knows what PE shops are the best. There the ones you've heard of. Does that mean they're the only places worth working at, no. Am I saying Ill only work at X, Y, and Z firm, no?

One or two people had valid questions/points, the rest of you are ass clowns.

I can agree with Marcus. I've always said working at a BB gives you the most OPTIONS when you want to move to PE, and working at a mega fund will probably give more options if you ever wanted to move downstream later. Personally (and this is me speaking here), I worked on a big LBO in 2007 (~6-10 billion) where I had direct access to alot of mega funds in the bidding process (since we were doing buyside financing). So I got to see first hand how the different funds treated their associates, I obviously got emails at 3 or 4AM from associates at some funds. I never actually had conversations with any of them about working there, but I got a pretty good general idea. And it was pretty clear how much interaction the pre-MBA's were allowed to get in the deal process (if I was normally dealing with a VP or above, or if pre-MBA's were emailing the banking team, etc.). Regardless, I made the decision early on to focus on the fund profile that I eventually went to work for - again a personal decision. Not to say that if I had interviewed for and gotten offers from KKR/Blackstone/etc. I wouldn't have given it some serious thought.

Now that I've made the move and have been working for 2 years, I'm quite happy where I am. I can honestly say my counterparts at places like Blackstone, KKR, and Apollo (and I mean those shops specifically) are unhappy - but they are leaving for B-school soon and will most likely have a ton of options afterwards, with more money in the bank. So there's the trade-off. I don't think any one of us has any real regrets.

Re: GameTheory... Exactly.

There are merits to each side.

So I decided to stay on for another 2 and a half weeks, and my managing director wished me the best and said he understood (he came from blackstone). I feel bad for my group, in that they are vastly understaffed, but apparantly they are talking to HR to see if we can bring another analyst in the this years' full time class.

I still have aspirations to work for a mega-fund, despite all of the critisims. The only thing that motivated me to work hard was the exit options. Honestly, investment banking is one of the most overrated professions, and while I don't regret my year here, I have freinds who made much more and had better life styles at boutiques, hedge funds, and equity research.

For those of you who are considering IB in school, if you went/currently attend a target, you most likely will interview with the banks because that is generally what everyone else does. My professors almost expected the top students to go into the profession. In the current state of the economy, if I were still in school I would go into (gasp) consulting, the risk/reward is just not there in IB like it was.

I think part of the reason I accepted the offer was for fear of my own job. Although I performed well my first year, it drives you crazy being in the office for 110hrs, combined with not knowing if you are going to get canned in the next round of layoffs.

Anyways, while I will not name the fund that I will be at (for obvious reasons), I hope it is a worthwile experience, and that I will actually be able to enjoy NY once in a while. Anyways, thakns for the input again,

MoneyKindgdom, Congrats! And good luck in your new place!

Good luck with your new position Moneykingdom.

First of all, congrats to MoneyKingdom on making a tough decision and his newly found life in Private Equity.

Second, Tetris: Your apparent conversation with yourself is hilarious. Nice.

Third, minhiub, my problem with that statement is that if your ultimate objective is to do PE, you shouldn't hold off pursuing that career choice any more than you have to. Also, many people would argue you have greater job security in PE and less so in IB, not to mention higher pay. Really not sure how one comes off as "better" by staying in IB as long as possible. As someone who is just starting his career, I would advise you to approach your academic knowledge with caution as there are many, many instances in life where something that sounds logical on paper just simply does not translate to the "real world."

~~~~~~~~~~~ CompBanker

Thanks for the advice, CompBanker. I got that thought after a discussion with my professor. But I guess I was wrong.

MK, congrats on the new job. Your life is going to be waaaay better with the switch.

Oh, if your M&A group needs a new analyst and wants someone from a semi-target who has about a month of IB experience, lemme know. I'd start as a first year whenever they need me.

EDIT: I also have one pretty well-sized deal (M&A) under my belt, though it's probably not very big for your BB group. Half a bil. Not impressive, I know, but I did some serious work on it and it's wrapping up in a week.