PE lifestyle? Hours, weekends, base, bonus, etc.?

krazyk's picture
Rank: Senior Baboon | 217

Can anyone already working as an associate in PE give an overview of the private equity lifestyle? Did a search on the forums and could not find anything recent. Looking for details such as:

  • Do you work at MM, FoF, Megafund?
  • What are your typical hours in a week?
  • How often do you work weekends?
  • What is compensation generally speaking for base + year-end?
  • What's the percentage breakdown between analysis, traveling, sourcing, etc.? (Or whatever is in the daily life of a PE associate?
  • Are there any special perks working at your firm? (I hear some PE shops organize sweet company trips)

What Is It Really Like to be a Private Equity Associate?

While lifestyle is likely to vary based on deal activity, location, team and many other factors, a few current PE professionals shared their experiences in the industry:

PE Perks are Awesome

From Certified Asset Management Professional - 1st Year @HFFBALLfan123 :

  • Work at MM
  • At the office around 60 hours a week but always on the hook for calls at all hours (overseas work)
  • Almost always have something to do over the weekend but don't go to the office.
  • Daily breakdown is always changing but i have been traveling a lot lately, do all the modeling as the young guy, zero sourcing... most of the days are spent on the phone gathering info and then nights actually working on shit...
  • Perks are awesome to fucking awesome

Little to No Weekend Work in PE

From Certified Private Equity Professional - 3rd+ Year Associate @samoanboy :

  • I work at FoF but focus most of my time on co-invests and secondaries.
  • 50-65 hours per week, the top end will usually include travelling time. A normal week at the office will rarely see me in later than 7.30pm (i get in around 8am).
  • Never work weekends except traveling and the occasional three line blackberry message or forward.
  • I spend 40% of my time on DD, 30% on monitoring portcos and funds, 10% on admin bullshit and the rest on travel/lunches/gym etc
  • Perks are mainly the lifestyle which is reasonably laid back and the access to senior partners / CEOs etc (as well as the fancy lunches, 5 star hotels etc - which actually lose their appeal fairly quickly).

PE Less Intense than Banking

From WSO user @CubicleCrowd :

  • Work at a MM
  • 60-70hrs per week but a lot less intense than in banking and with lots of free time during the work day
  • Never work weekends
  • Base is just above what i had in banking (around $100K), dont know about bonus yet
  • Almost no travelling, very little sourcing, mostly analysis
  • No amazing perks, some team events that juniors initiate but nothing else. but in larger pe shops they have regular off sites

Recommended Reading

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Comments (90)

Jul 19, 2011

yeah

Jul 19, 2011

no

Jul 19, 2011
  • Work at MM
  • At the office around 60 hours a week but always on the hook for calls at all hours (overseas work), almost
    always have something to do over the weekend but don't go to the office.
  • I doubt anyone is going to give comp numbers
  • Daily breakdown is always changing but i have been traveling a lot lately, do all the modeling as the young guy, zero sourcing... most of the days are spent on the phone gathering info and then nights actually working on shit...
  • Perks are awesome to fucking awesome
    • 2
Jul 19, 2011
HFFBALLfan123:

* Work at MM

  • At the office around 60 hours a week but always on the hook for calls at all hours (overseas work), almost
    always have something to do over the weekend but don't go to the office.
  • I doubt anyone is going to give comp numbers
  • Daily breakdown is always changing but i have been traveling a lot lately, do all the modeling as the young guy, zero sourcing... most of the days are spent on the phone gathering info and then nights actually working on shit...
  • Perks are awesome to fucking awesome

Would you say you get more responsibility in a MM compared to large shops?

I like pickles...

Jul 19, 2011
mk2012:
HFFBALLfan123:

* Work at MM

  • At the office around 60 hours a week but always on the hook for calls at all hours (overseas work), almost
    always have something to do over the weekend but don't go to the office.
  • I doubt anyone is going to give comp numbers
  • Daily breakdown is always changing but i have been traveling a lot lately, do all the modeling as the young guy, zero sourcing... most of the days are spent on the phone gathering info and then nights actually working on shit...
  • Perks are awesome to fucking awesome

Would you say you get more responsibility in a MM compared to large shops?

http://www.wallstreetoasis.com/forums/why-do-ppl-c...

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Jul 19, 2011
HFFBALLfan123:

* Work at MM

  • Perks are awesome to fucking awesome

Haha. Great line.

Jul 20, 2011

I work at FoF but focus most of my time on co-invests and secondaries.

  • 50-65 hours per week, the top end will usually include travelling time. A normal week at the office will rarely see me in later than 7.30pm (i get in around 8am).
  • Never except traveling and the occasional three line blackberry message or forward.
    *Compensation is fine, dont want to give details.
  • I spend 40% of my time on DD, 30% on monitoring portcos and funds, 10% on admin bullshit and the rest on travel/lunches/gym etc
    *Perks are mainly the lifestyle which is reasonably laid back and the access to senior partners / CEOs etc (as well as the fancy lunches, 5 star hotels etc - which actually lose their appeal fairly quickly).
Jul 20, 2011

Why are you guys so secretive about comp on an anonymous forum?

    • 2
Jul 19, 2011
manbearpig:

Why are you guys so secretive about comp on an anonymous forum?

Because, if you spent 10 mins tracking any of my posts and worked with me, it would be soo easy to figure out who i am.

Jul 20, 2011
HFFBALLfan123:
manbearpig:

Why are you guys so secretive about comp on an anonymous forum?

Because, if you spent 10 mins tracking any of my posts and worked with me, it would be soo easy to figure out who i am.

I would hope that people dont care that much to stalk you. im concerned about how to marjet myself compensation wise, not what you make

I Got a dollar and a dream...

Jul 19, 2011
HFFBALLfan123:
manbearpig:

Why are you guys so secretive about comp on an anonymous forum?

Because, if you spent 10 mins tracking any of my posts and worked with me, it would be soo easy to figure out who i am.

I'd be pretty concerned if there were people who actually did this on here.

Jul 20, 2011

I'm British and we dont believe it is polite to discuss one's riches. Plus I havent been here for a full bonus season yet so I don't know what the full comp will be.

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Jul 20, 2011
samoanboy:

I'm British and we dont believe it is polite to discuss one's riches. Plus I havent been here for a full bonus season yet so I don't know what the full comp will be.

lol

Jul 20, 2011
samoanboy:

I'm British and we dont believe it is polite to discuss one's riches. Plus I havent been here for a full bonus season yet so I don't know what the full comp will be.

+1

Jul 20, 2011

mostly co-invests and secondaries at my mm shop

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Jul 21, 2011

I think 1st year associates, post-analyst stint (let's say 2 years) are usually poised to make 200-250k all-in for their first year. Beyond that, it's hard to put a number on comp as certain firms have huge swings on both bonus and base (and in certain instances, carry).

Jul 21, 2011

am in MM, 60-70hrs per week but a lot less intense than in banking and with lots of free time during the work day
never work weekends
base is just above what i had in banking (around $100K), dont know about bonus yet
almost no travelling, very little sourcing, mostly analysis
no amazing perks, some team events that juniors initiate but nothing else. but in larger pe shops they have regular off sites

cubiclecrowd.com
blog.cubiclecrowd.com

Jul 21, 2011

I'd search around this site and M&I to get a better definition of what are the different aspects of finance. There's plenty of advice and information.

Although nothing's out of the realm of possibility, a private equity AND energy trading firm would be a bit odd with only $50MM AUM (I don't know if this is true but a massive firm like Blackstone definitely has PE and could possibly have an energy trading group, but they have something like a $250 billion AUM). $50MM for either trading or PE would be pretty small and unless they hire interns because they don't have other staff, hiring a few interns with $50MM would be a lot of staff for not much money and it would be difficult to recruit top tier college kids to it. Like I said, it's not impossible but it would be odd.

Jul 21, 2011

The $50M figure seemed a bit odd to me as well-- the article with that info was one of the first results I found. A Reuters article I just pulled up says the company had about $1.6 billion under management in 2007 until they had about a $500 million dollar trading loss about 5 years ago. What I'm getting from the article is that they lost almost everything due to those trades.

Jul 21, 2011

PE and trading don't go together. PE doesn't require quants.

You need to do a ton of reading. Start here:

http://www.wallstreetoasis.com/frequently-asked-qu...

Jul 21, 2011

Got it. Thanks for being straightforward.

Jul 21, 2011

This is sounding more like a hedge fund that might do some investments in private securities.

Jul 21, 2011

Depends entirely on the firm. Some PE firms are highly supportive of work / life balance and clear out by 6-7pm. Others work you similar to banking hours. From what I've seen and heard, the bigger the fund the more hours worked, although this is not always the case.

Jul 21, 2011

I guess talking about larger MM PE funds ($5 billion+ total AUM or $1 billion+ per fund)

Jul 21, 2011

Also think that it varies a lot. From my experience hours in PE are generally more cyclical even though that cyclicality can decrease a bit as fund size increases. That means that you can have IBD-like periods but then there will also be weeks when you can finish work at maybe 7-8pm. I think a big plus is that you are also a bit more flexible in planning your work and can shift it around personal appointments, etc - unless you are in a deal situation of course.

Jul 21, 2011

Depends on deal activity. Obviously if you're working a bunch of deals that are closing you'll be working a lot more than if you've got no deal activity. But it is going to vary wildly depending on the firm.

Jul 21, 2011

My hours in PE have been reasonable. Out by 7 most nights. Rarely come in on the weekend. Have had occasional crunches but overall nothing like what I've seen in IB.

Jul 21, 2011

Like Khayembii said and in my experience, it's all dependent on deal activity and the firm you work for. I work with a smaller group (~10 guys), and during the winter we didn't see very many deals that we liked. During this time I was in at 9 am and out by 5 pm every day - no weekends. It was great. However, over the past month and currently, we have been working on a few deals simultaneously, and I've been in at 8am and out at 9pm - midnight + weekends quite frequently.

Jul 21, 2011

Based on my experience in the middle market (I don't think it's like this at the megafunds) at two different funds through my career is that, like everyone else has said, it depends on the firm and how many deals you're doing at once. There's less face time and there's less of a chance of someone throwing something on your desk at 7 or 8 pm and saying they need it by 8 am the next day and you know how many deals are happening and at what stage they are so even though you may still have 70 or 80 hour weeks, you know when they're coming so you can plan your life a little better.

    • 1
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Jul 21, 2011

anyone have a comment on this?

Jul 21, 2011

bumping.....

"Perfection breeds Perfection"

Jul 21, 2011

My understanding is that the hours are brutal at pretty much any bb pe shop...the main difference between lifestyle in banking vs pe is that hours in pe are more predictable so it tends to be slightly more managable although not easy by any means

Jul 21, 2011

At the associate level, there is effectively no difference between working for TPG/Carlyle vs. GS Capital Partners. Pay and hours are almost identical, although recruiting can vary slightly. GS Capital Partners will, from time to time, recruit direct from undergrad - but this is rare, since most GS Cap candidates are drawn from the same pools as those for TPG/Carlyle.

Jul 21, 2011

I'd love to hear from someone at a PE firm which has a debt desk who have thought about or executed debt purchases through their other desk, and not on the behalf of the portfolio company.

Jul 21, 2011
Oreos:

I'd love to hear from someone at a PE firm which has a debt desk who have thought about or executed debt purchases through their other desk, and not on the behalf of the portfolio company.

You mean a firm that bought some distressed debt and flipped it a short time later? If you're getting at that, I have a buddy who worked at a place that did that. His main focus was middle market buyouts, but as I recall, they made a monster return flipping some debt in like three months.

Jul 21, 2011

Another great one. Thanks, King.

Jul 21, 2011

I agree with you that these kinds of experience must be really interesting (as long as you don't have any money in !).
That's why I'm looking for a turnaround consulting job and not generic MBB or IB/PE.

Jul 21, 2011

I figure these types of situations are common at deep distress / value PE shops that engage frequently in these transactions.

Jul 21, 2011

Thanks for posting this. I was just at a conference a couple days ago where one of the sessions was dedicated to how sponsors should deal with distressed portfolio companies, so this post is a very timely inbound.

Jul 21, 2011

brandon st randy -

Glad you enjoyed. It's really a fascinating process and I do envy my buddy who got to live through it. It's also something that's going to happen to even the best-run funds, so it's the sort of thing everyone should think about.

Jul 21, 2011
TheKing:

The management team was great during boom times, but seemingly impotent in dealing with the company's trouble areas.

How strange! What a truly unusual and bizarre phenomenon. I have never heard of this happening before in my life.

No but really, in all seriousness, great thread (this and the one before). I'd love to see more like this.

Jul 21, 2011
prospie:
TheKing:

The management team was great during boom times, but seemingly impotent in dealing with the company's trouble areas.

How strange! What a truly unusual and bizarre phenomenon. I have never heard of this happening before in my life.

No but really, in all seriousness, great thread (this and the one before). I'd love to see more like this.

lol, thanks. I do think the site benefits from this sort of detailed discussion. I'm always bugged by people that have a fanatical obsession with something like banking or PE without really understanding what the job entails, so this sort of stuff is important.

Any topics that you would like to see covered more in depth? Anyone else have any ideas that they'd like to see fleshed out? I'm always interested in hearing ideas.

Jul 21, 2011

Just started in a PE firm in Asia so I'm not too involved with majority of the portfolio. However, one of the portfolio companies which was exited with an IPO ended up being plagued with accounting discrepancies. I heard that there was a huge scramble to salvage whatever they could and it was quite an adventure. Currently I'm tasked to work with one of the venture investments we made and I get to do some business development so it's pretty unique. The only downside is the time taken to do cold calls for business development purposes.

Not too sure about the general PE landscape in the Asia Pacific region, but it seems that owners here are less keen on leveraging and also prefer to keep the business to themselves which makes buyout level deals less common. Growth equity and mezz financing seem to be more popular.

One amazing story I've heard was from a relative who runs a REPE firm in China. He closed a JV deal for a new shopping mall in an upmarket district and was due to make the first tranche of payment. Two weeks prior to the payment, he visited the construction site and everything seemed to be in order; i.e. scaffoldings were up, heavy duty machinery brought in. The day that the cheque was sent out, he was visiting a nearby city to source another deal and decided to drop by the shopping mall and check out the progress. Astonishingly, the whole area was empty. Furthermore, the CEO of the other JV company couldn't be found. Needless to say, the cheque was immediately cancelled.

Jul 21, 2011

Informative post. Thank you

Jul 21, 2011

Did you have any experience of re-investing during down rounds or would there always be an exit if a portfolio company was facing an impending cash flow issue? This question might be for younger companies, or ones with multiple investors, than the situations you have described, but always great to hear another perspective. An insightful post, it is much appreciated by the younger generation of contributors here.

Jul 21, 2011

Great post, very informative and detailed.

Jul 21, 2011

Great post TK.

Out of curiosity, how many portfolio companies are you currently covering?

Jul 21, 2011
Falcon:

Great post TK.

Out of curiosity, how many portfolio companies are you currently covering?

I'm not with the fund anymore, but I started out with three companies and ended up covering five by the time I was done (due to two platform acquisitions that I closed.) I also completed three add-on acquisitions. My companies performed quite well, so I had a pretty clean experience. I'm hoping to share some alternate experiences I've heard about through friends about what it's like when things aren't going so hot. While I don't envy some of the stresses they had to deal with, they definitely learned a ton.

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Jul 21, 2011

Great post - I was always interested to hear more about the day-to-day life on the PE side.

Quarterly valuations - how much of this is BS? Your fund's investor statements depend on it, but is this a similar game to IB where an MD has a ballpark figure in mind for how much a company is worth and your DCF / comps / model are there to support it?

If you went to your boss and said "my quarterly valuation says the Company is now worth 2% less" would your boss say "no, run it again"?

How dramatic are the changes in valuation on a quarter to quarter basis? If you are using public comps I would imagine there could be some pretty wild fluctuations.

Jul 21, 2011
grosse:

Great post - I was always interested to hear more about the day-to-day life on the PE side.

Quarterly valuations - how much of this is BS? Your fund's investor statements depend on it, but is this a similar game to IB where an MD has a ballpark figure in mind for how much a company is worth and your DCF / comps / model are there to support it?

If you went to your boss and said "my quarterly valuation says the Company is now worth 2% less" would your boss say "no, run it again"?

How dramatic are the changes in valuation on a quarter to quarter basis? If you are using public comps I would imagine there could be some pretty wild fluctuations.

Yeah, I thought this sort of thing would be enlightening. So much focus is on PE at a high-level without a realization of what actually goes on at a nuts-and-bolts level.

Valuations are pretty thorough. Generally, you run the valuation, then get all your drafts together and have a meeting with the Partners. Valuations are discussed based on the output and how that reflects the reality of the company's performance. They can definitely swing from quarter to quarter due to public comps and (sometimes) precedent transactions that take place. The key is that they go out with written narratives and are discussed on a call with members of an Advisory Board.

All of the work in the valuations has a grounding in hard numbers along with a narrative. And, even though companies might fluctuate up or down a bit, it's important to remember that you're looking at an entire portfolio. So, even if a couple companies are lagging, the real winners of the portfolio can carry the day. That, and the fund's LPs know that a sale process will maximize value on exit. A well-run process can get you a valuation a good deal higher than what your valuation tells you. The CFO of my fund had stats on this, and it was something like companies tended to go for a 15% - 20% premium to our valuations of them (upon exit.)

Still, an important exercise because it keeps you on top of company performance and helps alert people to trouble areas and keeps Partners on their toes. It is, however, a giant pain in the ass, especially when you're really busy.

    • 1
Jul 21, 2011
grosse:

Great post - I was always interested to hear more about the day-to-day life on the PE side.

Quarterly valuations - how much of this is BS? Your fund's investor statements depend on it, but is this a similar game to IB where an MD has a ballpark figure in mind for how much a company is worth and your DCF / comps / model are there to support it?

If you went to your boss and said "my quarterly valuation says the Company is now worth 2% less" would your boss say "no, run it again"?

How dramatic are the changes in valuation on a quarter to quarter basis? If you are using public comps I would imagine there could be some pretty wild fluctuations.

Quarterly valuations will be audited so this isn't an inconsequential banking exercise; methodology needs to be set/defensible and consistent between quarters. One major reason why a PE fund might want to fudge their unrealized gains is if they are already fund-raising for the next fund and want something to show for it but generally from my experience there isn't that much pressure to inflate unrealized gains as the goal is to have an accurate convergence towards your exit.

Jul 21, 2011

great king, thanks. and yes there can only be one king on wso

WSO's COO (Chief Operating Orangutan) | My Linkedin

Jul 21, 2011

Thanks for this. Very accurate based on my PE experience as well.

Jul 21, 2011

I'm assuming this is for an LBO shop?

How would this differ at a growth equity shop?

Jul 21, 2011
idragmazda:

I'm assuming this is for an LBO shop?

How would this differ at a growth equity shop?

I can't speak from experience, but I imagine it's quite similar. The biggest difference would be how you go about evaluating companies you invest in and your expected goals for them. That, and the type and amount of ownership you take. In growth equity, your capital is used in large part for growth, whereas in buyouts you are simply taking control of the business and providing liquidity to the existing shareholders.

Note, though, that management teams in PE almost always retain some level of ownership post-close so as to align incentives with the PE fund.

Jul 21, 2011

Great post!! Could you share some perspective on the operations management stratigies you perform on any of your current projects?

Jul 21, 2011
angelinajolie:

Great post!! Could you share some perspective on the operations management stratigies you perform on any of your current projects?

You might have to elaborate a bit on what you mean. Unless you are asking about the mythical "operations" aspect of PE.

If you're referring to the misc. projects I mentioned in my post, these can include the following:

--Digging into internal financials to analyze the company's revenue and profitability on a product by product basis (digging in and looking for trends, etc.)
--Helping with modeling and analysis for refinancings
--Misc. financial analysis / competitive analysis

Most of the work you'll do with your portfolio companies outside of add-ons and the other things I listed above will be financial in nature. I'm sure there are some different examples out there from other people, but this is generally the case.

I'm always bugged by the myth of operations in PE. As an Associate in PE, your main job is to work on and complete acquisitions (new platform and add-ons.) The rest of your work revolves around monitoring portfolio companies, helping out with misc. projects like the ones I listed above, and fund administration (i.e. valuations.)

Let me know if you have any more specific questions.

Jul 21, 2011

Another great post from TheKing - thanks a ton for this.

Could you talk about what you would be doing in a leveraged (or other) recap situation? I don't know if these were common with your fund but it would certainly be enlightening to learn more.

Jul 21, 2011
Plato:

Another great post from TheKing - thanks a ton for this.

Could you talk about what you would be doing in a leveraged (or other) recap situation? I don't know if these were common with your fund but it would certainly be enlightening to learn more.

My fund didn't do much in the way of recaps. I presume you mean dividend recaps? My understanding is that you can only really pull that off if the portfolio company is absolutely blowing expectations out of the water, you're way ahead of plan, and you're looking to take some money off the table.

Someone else might be able to chime in on this one with more / better info.

Jul 21, 2011

This is a gem of a post. Thank you.

Jul 21, 2011
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