Private Capital Advisory (Evercore, Lazard, etc.)

Hi,

I am just now starting to learn about this group in IB and it seems like a relatively new field of finance. Could anyone shed some light on comp, work-life, type of work being done, etc.? I am curious to see if anyone knows salary progression after the first year or two also and exit opps? How to prepare for interviews in this field would be helpful too. Thanks!!!

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Comments (7)

  • Associate 1 in IB - Gen
May 3, 2021 - 12:59pm

I think it's more focused on this than debt advisory for institutional investors: https://en.wikipedia.org/wiki/Private_equity_secondary_market. Depends on the naming as it's different across banks. Can't speak much to the work other than to say it's increasingly focused on GP-led deals rather than traditional LP portfolio sales. Processes will look somewhat similar to traditional M&A when dealing with a single asset. I heard comp was roughly the same as M&A/Coverage bankers at EBs but once again, don't work in the area and cannot confirm.

  • Analyst 1 in PE - Other
May 3, 2021 - 1:13pm

Comp at EVR / Lazard (top PCA Groups aka Secondary Advisory groups) is pretty similar to M&A acc to associates & VPs there now. The businesses have been very busy w/ a ton of stimulation in the GP-led secondaries markets. EVR had a record year in 2020 and is picking up hiring. Lots of other EBs seem to be hiring for similar roles (PJT, Moelis, etc.). 

May 4, 2021 - 1:26pm

So this type of function would broadly fall under placement agents. Generally speaking, I would think of these groups' function to be closer to investor relations at pe fund than as a banking group.

Generally speaking these groups would be service institutional investors (GPs) and help them with initial fundraising (primaries) or GP-led secondary transactions. An example of a GP-led secondary transaction being a continuation fund. 

There are also other transactions where they would advise on the LP side as well (LP-led secondaries) and help them sell their stakes in multiple GP funds to other LPs.

In short they are just intermediaries who help facillitate the transfer of capital between GPs and LPs in a not very liquid market.

In terms of the actual operations, the group is generally divided into 3 horizontal groups: sales/origination, project management, and distribution.

Sales/origination is exactly as it sounds which is the pitching and closing of the deal with the gp/lp. 

Project management is the function who works with the client after origination closes the deal.

Distribution group is the function who manages the communication with the LPs and help assess demand from the market.

As a junior, your job will be to learn the story of the different GPs and funds so you can effectively go to market and pitch the fund to the LPs. Going to be lots of typical analyst work such as ppt decks and memorandum.

From an exit perspective, you're likely going to either stay in this field or transition to IR at a PE shop. However, it's hard to jump into actual IB, PE deal team, or Corp dev since you're not really working with operating companies.

Having said that, this isn't a bad gig if you really enjoy working with institutional investors. And if you decide that this is for you, the industry is so small that you can very easily jump from shop to shop.

  • Associate 1 in IB - Gen
May 4, 2021 - 1:34pm

Solid overview of the PCA groups. Would caution that this is how they work at a high level. Some of these groups split fundraising and secondary advisory into two teams. If they're split, the fundraising group will look as described above. The secondary advisory group will tend to look and feel more like a traditional banking role, especially if the group does a lot of GP-led or single asset deals.

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May 4, 2021 - 2:14pm

blakegriffin

So this type of function would broadly fall under placement agents. Generally speaking, I would think of these groups' function to be closer to investor relations at pe fund than as a banking group.

Generally speaking these groups would be service institutional investors (GPs) and help them with initial fundraising (primaries) or GP-led secondary transactions. An example of a GP-led secondary transaction being a continuation fund. 

There are also other transactions where they would advise on the LP side as well (LP-led secondaries) and help them sell their stakes in multiple GP funds to other LPs.

In short they are just intermediaries who help facillitate the transfer of capital between GPs and LPs in a not very liquid market.

In terms of the actual operations, the group is generally divided into 3 horizontal groups: sales/origination, project management, and distribution.

Sales/origination is exactly as it sounds which is the pitching and closing of the deal with the gp/lp. 

Project management is the function who works with the client after origination closes the deal.

Distribution group is the function who manages the communication with the LPs and help assess demand from the market.

As a junior, your job will be to learn the story of the different GPs and funds so you can effectively go to market and pitch the fund to the LPs. Going to be lots of typical analyst work such as ppt decks and memorandum.

From an exit perspective, you're likely going to either stay in this field or transition to IR at a PE shop. However, it's hard to jump into actual IB, PE deal team, or Corp dev since you're not really working with operating companies.

Having said that, this isn't a bad gig if you really enjoy working with institutional investors. And if you decide that this is for you, the industry is so small that you can very easily jump from shop to shop.

All of this is only true for the fundraising / primary side.

Secondary advisory is much closer to a Sponsor coverage group, albeit with a more portfolio level approach. 

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