PE Deal Sourcing Comp / Lifestyle

ATFarr's picture
Rank: Senior Chimp | banana points 18

Hey all,

I'm looking at making a career change from strategy consulting to PE deal sourcing. I'm a bit of an oddball, in that I was in sales before I moved into consulting. So I'm actually looking for a more commission-incentivized role that still combines some of the elements of finance / strategy.

My questions are, for firms heavy in sourcing like TA Associates and Summit:

(1) What is the range for Base + Commission?
(2) What are the hours? (heard 60-80)
(3) What are the exit ops if I have no desire of going back to B-school? Is this a dead-end role or is it possible to make VP if you're really good at sourcing?
(4) I wasn't in banking. I can model, but not like most bankers. Will this be an issue in recruiting / should I be heavily prepping my modelling skills? Or will the interviews focus more on cold calling?

Thanks!

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Comments (11)

Jan 7, 2018

1) I believe first years make 110K with a 75-100% bonus. Equity is something like $500 per M invested but also pooled bonuses amongst associates.

2) probably right, more if you are working on deal

3) get promoted, go to another PE/VC firm, go to operating role, pretty broad set of options

4) Yes, you will need to learn finance to work at a PE firm unless you are in a role that is exclusively smiling and dialing.....

Jan 7, 2018

Just to make sure I have comp right:

  • $110k Base
  • Plus 75-100% Bonus (pooled with associates?)
  • Plus $500 per $M invested (into deals that I source?)

So let's say I source a $50M deal. I'd get ~$25k commission / bonus... on top of the 75-100% bonus for the fund?

Otherwise, on smiling & dialing: I've Summit and TA are heavily focused on dialing... with their interviews mostly covering on fit / cold calling over quant tests. Is this true / would the comp be the same as the above for these roles?

Thanks for the help here!

May 4, 2018

I can guarantee you there is much more to those two firms' interviews. Yes they are dial-heavy at the associate level, but they will definitely test your modeling skills.

Apr 19, 2018

also interested on this, anyone have insights?

May 2, 2018

bump

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May 2, 2018

A buyside firm I know well pays 1/3 Lehman to the guy who sourced it.

We pay Lehman formula on transaction value plus 15% equity. Distressed Industrial deals only.

Feb 27, 2019

Bumping this and would also like to hear any insight on how to convey the key skills of this job in an interview. Are there particular core traits other than the obvious that are worth pushing?

Most Helpful
Feb 27, 2019

The comp figures above are generally right, but it varies firm to firm. In general sourcing at a PE firm requires a strong sales related skillset with a little bit of an IR bend to it as well. Depending on your focus area you're pitching the firm to founders, CEO, bankers, other PE firms, etc and have to be a great relationship builder and manager.

Travel is usually pretty heavily as you're traveling to visit prospective companies, heading to conferences, etc.

You've got to be good at the basic sales tools and systems like outreach, salesforce, and also be versed in the finance systems like pitchbook, datafox.

Lastly you've got to be organized, persistent, and ok with working on deals for years before they actually close, if they ever close. I talked to a sourcing associate at a firm recently and he said that propriety deals take 3-4 years to close from first contact to close. With that being said, add-ons, banker deals, etc can be easier to find and close, but the velocity can be very slow depending on the firm.

Personally, I think it's a great career for the right type of person that likes to hustle, has a very strong sales skillset, doesn't mind travel, and wants a little more autonomy over their life. Hours will be long, but they're generally more flexible than anything that is transaction focused. Sure, you might work a weekend because you want to prep an email campaign ahead of your trip to a conference the following week, but you're not getting calls/emails at all hours becuase a deal is falling apart or because you need to do a bunch of diligence ahead of a bid deadline in 72 hours.

The last thing I'll say is, sourcing can be a career, but you need to pick the right firm. Certain firms have sourcing as a career track role from analyst to partner. People get paid well and get paid based on deals closed/dollars committed. I know a guy that was an add-on machine at a big PE firm and he made more than the Associates/VPs on the deal team. You just need to find a place where sourcing is valued equally to the deal team(which is absolutely is) vs a place where they have a churn and burn approach and just overstaff junior resources on sourcing to boil the ocean to find deals.

    • 4
Mar 4, 2019

Don't work in this field myself but my best friend does. @mrharveyspecter is spot on - skill set is heavily biased towards sales (not modeling) and there is a lot of travel. At my friend's fund (MM), there is a career track from associate to partner on the deal-sourcing side, but it's quite lean. There is 1 deal-sourcing partner and the total team is ~5 people vs. ~35 on the ops/investing side. My friend had no finance experience before joining but had a long sales track record in a tangential space.

Mar 4, 2019

Great comments above, and helpful insights since there isn't much information on these types of jobs on here. I am starting a similar job for a MM PE in a couple weeks so I will give some feedback from my own experience in due time.

Does anyone here knows how valued these type of experiences are for MBA admission?.

    • 1
Mar 7, 2019