PE feeling like banking 2.0

I'm close to a year in PE now (not MF and not an actual GP but we behave like one, prefer not to say more), and I'm bored to tears.

I've worked on a few transactions but somehow the key members of the team I work for made the experience feel like pitch-only banking 2.0.

Things like griping about trading comps and wanting an explanation for every single "discrepancy" (summary: if you insist on using penny stocks / anything on an Asian exchange really...), as if it mattered to our investment thesis (imho if so, then we never had an investment thesis), to tons of useless admin. That's before I even get started on our IC.

I came from a terrible banking shop and left because I didn't want to waste anymore years of my life.

But this is wasting hours and hours of my life everyday updating or digging into detail on things that do not matter and no one will ever care about.

How do you manage bosses who are not deliberately toxic but don't understand / don't care that their requests are absolutely meaningless to the IC and the investment.

I'm considering trying to join an actual GP but am wondering if it's not going to be very different

Comments (21)

  • Works at Other
Dec 2, 2021 - 10:32am

I'm indeed at the type of firm that would be expected to do co-invests but my team has been doing our own deals against other GPs and I actually haven't been on a co-invest yet. So we lead DD and engage with mgmt etc.

But you're right in that my firm doesn't like to do the post-deal execution legwork. That lack of management exposure itself would likely be a reason for me to leave in about 2 years' time, but idk if I even want to stay that long because of the maddening way my team is run.

  • 2
  • Works at Other
Dec 2, 2021 - 6:57pm

It's not diligence and I'd rather we spent time on that.

It's stuff that does not matter to a deal - everyone's going to have a different opinion about that, but like I said, the things I'm complaining about are like obsessing over comps. Not even industry standard adjustments or unusual metrics but questions like why does it fluctuate to a small degree from day / week / month, etc. This is not diligence.

Idk and idc frankly, that's what 1 to 5 year weekly / monthly averages are for. 

  • 3
  • Associate 3 in PE - LBOs
Dec 2, 2021 - 1:47pm

It's unfortunately a symptom of the type of personality that this industry attracts (risk-averse, profit driven, and sometimes borderline sociopathic).  There are plenty of shops out there however, with decent cultures that focus on the big picture stuff way more and realize getting 80% of the way there is sufficient to whether something is good/bad for the deal - drilling down the last 20% is usually just so you can pat yourself on the back and have your ass covered in an IC. 

Growth equity and LMM can be much more interesting places to play given the focus on more nascent industries / businesses and understanding that getting 100% of the answer is often just not possible. 

Dec 2, 2021 - 11:36pm

Yup. And even GE / VC is pretty risk averse - there's a reason Tiger is kicking everyone's ass in the venture space right now. They're nimble, have the HF mentality (investing with limited information and working quickly), and aren't afraid to write big checks. Wonder how long it'll be before the rest of the private investing space wakes up.

  • Intern in VC
Dec 3, 2021 - 10:54am

Banking, PE/VC firms attract the same persona - risk averse, rent seekers, ambitious but unsecure people - from Analysts to Partners. This is what makes most people spend countless hours on low/no-added value stuff. They also don't really have an investor mindset, looking for the big picture and trying to build strong conviction / investment thesis, but rather focus on how they will move in the "corporate" ladder. Not generalizing ofc, but you will very likely encounter the same issues in most of the places out there.

  • Works at Other
Dec 3, 2021 - 7:49pm

People to focus on things that actually mattered because they now have skin in the game?

Dec 4, 2021 - 1:48am

They are all ex-bankers and hardos so why would they not think like hardo bankers? Now they have even more money at stake and their own skin in the game! That's not a recipe for being cool, calm and collected. 

Be excellent to each other, and party on, dudes.
  • 1
Most Helpful
Dec 4, 2021 - 3:38am

This is totally, and I hate to say it, but normal disenchantment people have when entering PE whether it is a shop like yours, a MF, or a MM fund. A lot of the tasks will surely ring familiar to banking. That being said, it's odd that trading comps are a point of contention with your bosses and seems like your culture might be a little weird if that's a normal thing. I can't generalize obviously as that seems to be a pretty specific example but all together, odd.

To your point about managing bosses who are toxic inadvertently, unfortunately I don't think there is such a thing unless they are all collectively super socially stupid and aloof. A toxic environment is a result of continued behavior and those involved in making it such are usually aware of such behavior (if not for themselves, then at least realizing it amongst their colleagues) and don't do anything about it. If that's the case in your assessment, run for greener pastures. Nothing can solve that kind of environment imo.

  • 6
Jan 8, 2022 - 4:33pm

Hey thanks man appreciate the words. I work at an investment bank (will not say which or what size) in a role with our C-team now.

  • Partner in PE - LBOs
Dec 5, 2021 - 6:35pm

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