PE FoF Co-Investment versus IB for Private Equity

IB >>>>>> PE FoF

Well done 21 year old prospective monkey...you clearly know nothing.

Co-investment is nothing like fund investing, extensivde modelling and analysis as well as being extremely close to the GP....you work with the Parners / associates rather than for them....I've now done two co-investments and it is an excellent experience....when looking to move on you will have an extremely strong rolodex and stick out massively from the presentation deck monkeys at most of the i-banks.

anyone mind commenting how low bb ib (wells-type place, arguably bb, let's assume product group) compares to a co-investment role in terms of compensation and exit opportunities?

thanks for the comment samoanboy. i had a rough suspicion that a lot of that was involved.

haha couldn't have said it better samoanboy, this forum is way too full of juniors/seniors in college who think ib is the only path to success. I'd go with fof (may be biased working as an analyst at a PE shop), but i think the experience would be a lot more unique and probably better hours with slightly less bonus. If you are not getting comparable experience modeling you can always prep on your own, the lack of a structured analyst class IMO, will be outweighed by the significant amount of contacts you will make as well as the deep understanding of how a fund works.

basically,

P/E FOF- better exposure to other PE funds, very unique experience, less hours

IB- probably better modeling skillset built, slightly better pay, and a structured analyst class

What is wrong with the world. You want to do pe... You have a pe opt ... Ok fine so ur not LBOing Chrysler (yet) but you will co invest and do the same type of work most likely. The skillset will be defensible and likely unique and valuable. Are people that f ing scared shitless they are unwilling to pursue a career path they are actually interested in at the risk of seeming different from the herd

agree with above poster 100%, more than one path to the finish line....

appreciate the comments. don't have the offer, just asking. yes, it is probably more similar to pe work, but what i'm asking is which one will set me up better for a career in pe. none of your comments really address this, more the typical comp/hours/stuff.

suppose madison dearborn or hellman and friedman come across 2 resumes with otherwise equivalent stats, the only difference being two years at a large fof doing co-investments and a wells fargo type place doing m&a, who is the better candidate on paper and by how much?

obviously you can talk about "balls" all you want, but it's not so much a fear of being differnet from the herd, more that something that seems too good to be true is too good to be true.

Absolutely the person who's done co-investments. It's a no-brainer. That person has already done 80% of the job they'll be doing at the PE fund. So, the hiring group will have a lot of confidence that if they've done well in a co-investment job, they'll do well in PE. Someone with real substantive buy-side experience is pretty much always more interesting than yet another interchangeable banking analyst.

Keep in mind that the most likely outcome is that you'll end up trying to get a job at one of the funds that your FoF has co-invested with, so you'll be interviewing with people who you've already worked and interacted with. This is another huge advantage over a banking analyst.

I'm not saying that any of the pro-FoF logic above is wrong, as it does make sense, but I should comment that I have never seen a PE associate that has come from the FoF world. Not one. And I've perused a lot of PE sites.

I have seen a few within a megafund's mezz group.

I think you'll leave more options open to yourself starting out at a BB in IBD... Although I want to be clear that when you say "low bb" you mean like UBS or DB? If that's what you mean I would recommend starting in IBD. If you mean wells fargo, HSBC or something like that, which some might confuse with a BB if they're an amateur, then definitely go with the coinvestment group / FoF.

If the FoF focuses 50%+ on co-investments than that could be a good experience. As some of the above posters have mentioned - you'll be doing modeling, meeting a lot of GPs and working closely with them throughout the deal process (except for origination) and you'll be building a solid list of connections.

both could be good opportunities.

I am in a similar situation and have similar goals. Is there any specific name brands for FOF?

I'd like to point out while co-investing and secondaries are pretty interesting, you'll also be doing normal FoF analysis, which is incredibly boring. also, the co-investing process doesn't get nearly as deep as a normal investing process a pe fund takes. basically, the pe fund will give all of its LPs 2-3 weeks or so to decide if they want to co-invest and you have to come up with an answer (with valuation, etc) by then, while the pe fund just spent 3-6 months valuing every detail of the company. that being said, your pe exit ops and compensation will be similar to IBD at a good group. hedge funds are probably out of the question.

Also interested in this topic - I'm going to be starting at a FoF with co-investment, secondaries, and fund investment groups. Won't know group placement until after training.

I'm assuming that co-investment is the best choice if your goal is transitioning to a direct PE fund but how about the other two?

I know this is an old thread but I am in the same situation. Any updates?