PE Recruiting for Secondaries and FoF Firms
Incoming analyst at an EB (Evercore, Lazard, etc.) I was hoping to find out more about the recruiting process for the major secondaries and FoF players (Coller, Ardian, GS AIMS, etc.). Do they all use a HH or are you better off networking on your own? Do they have on-cycle recruiting or is everything just off-cycle?
A lot of the secondaries shops (Coller, CPPIB, Pantheon, Neuberger Berman, etc) recruit by just posting positions online / networking to figure out when they will post their apps online on a need by need basis. Meanwhile, others use headhunters but don’t necessarily hire every year and mostly recruit off-cycle almost a year into your first year.
Coming from a Lazard/Evercore, is there a particular reason you want to recruit for secondaries? It’s definitely a great space to work in and I certainly thought I’d recruit for it too, but I can share some things from experience / told from older friends. You need to make sure you are 300% ready to commit to secondaries before deciding to go this route after banking.
1) Once you go into secondaries, it’s going to be extremely rare for you to go into direct/traditional PE if you find out it’s not for you. Once you go into secondaries, you tend to stay in the space for your career. You can’t exit into portfolio roles, corp dev, startups, etc that you see all the time from PE.
2) If you’re not 300% sure you want to do secondaries and also want to try recruiting for regular buyout funds, you’re screwed. The headhunters that cover some of the top secondary funds are Amity, CPI, and Oxbridge. Once you tell them you want to work in secondaries, you’re never going to be considered for buyout funds. This is super risky because Amity, CPI, and Oxbridge have a huge MM/UMM/MF buyout client list and you will miss out on all those opportunities.
3) On top of this, secondary funds tend to hire on a need basis at random times throughout the year because the teams are super lean. They also don’t tend to push people out as much, so some years they just won’t hire anyone.
4) Coming from a BB/EB, you probably only want to work and a handful of top secondary funds. The universe is tiny. There’s probably a maximum of 5-6 shops you want to work at, and most of them will be a huge paycut from banking. Also, go look at the team bio of what are considered one of the top funds like Pantheon, Landmark, LGT, etc. You will rarely find people from a banking background, let alone at a top place like Evercore/Lazard.
Here’s my advice, which is the exact advice I got when I was seriously considering secondaries: You are 24-25 years after your banking analyst years. This is still extremely early on in your career, and your thoughts on your career can change significantly throughout the next 10 years even if you swear that it’s set in stone that you want to do secondaries. So it’s important to be able to brand yourself well and open up all types of amazing exit opps and go into regular buyout PE funds first. If you end up not liking it, you can always jump to Secondaries or whatever you want to pursue. You should not want to pigeonhole yourself into secondaries at such an early stage in your career. Worst case scenario, you sit out with on-cycle recruiting just to interview with maybe 3-4 secondaries funds later in the year and then strike out. Now you’re stuck in banking or will have a hard time convincing headhunters you want to try on-cycle for regular PE as a second/third year analyst when you’ve failed secondaries recruiting.
Thanks, that was really helpful. I didn't have any particular reason but based on what I had read about the secondaries space it seemed pretty interesting to me so I wanted to learn more about the recruiting process. But yeah I think it probably does make sense for me to stick to direct/traditional PE route for now.
Happy to help, especially since I almost made the same mistake. Coming from a BB, I had told two of the main headhunters that I wanted to recruit for secondaries even though I wasn’t so sure. There’s not much info on the actual work of the sector but I was just caught up on the rumor that the hours are much better. From networking at the top secondary funds, the hours are certainly better but you have to realize this isn’t just fof/primary investing. Secondaries is about deal execution, and you are constantly doing deals since the time frames are shorter. Working in banking, you know what hours can be like when you’re in live deal mode. In secondaries, I’ve been told you may work as little as 50 hours one week but easily work 80+ hours the next if you are in the middle of a live process. Thankfully, I learned early on that I made the wrong choice and told the headhunters I hadn’t met with that I want to do regular MM buyouts, and that has helped me land a role. However, the headhunters I had previously told that I want to pursue secondaries went silent on me once I told them I had a change of heart.
Anyway, secondaries is still a solid place, but imo not for those who are even remotely interested in a value creation of a business. You are a passive investor (an LP basically), so you have no control over your investments. This is why there is really no exit opps if you end up not liking it. Meanwhile, regular buyouts will give you the opportunity to get hands on with the company, see what board meetings are like, watch operational experts get their hands dirty and learn from them, etc. If you ever think you want to run your own business or help run a company in an executive role, this is the right path to go. Lmk if you have any other questions
And Primaries in a Placement Agent will be even worst off, am I right?
Really helpful! Thank you
Also interested!
Why not just recruit for direct PE in associate roles if you already have 2 years of banking?
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