I am 25 years old and currently an Associate at a well known regional commercial bank in Texas, think Dallas or Houston making roughly $72k all in. The work is not glamorous as I work on a few new deals per year, but mainly am doing renewals/covenant compliance etc. but I have a clear progression path to VP then Director as a Relationship Manager within another 7-8 years, making $150-200k salary in that time frame. The work life balance is great and although the pay does not seem like a ton, you can live quite well as a single individual in a low cost of living city on $72k.
I was recently approached by a head hunter for a position as a Senior Associate at a start-up Private Credit Fund in San Francisco. At worst case the fund would have $70-$80MM AUM and best case the fund would have $125MM with a goal of eventually getting to $400-500MM. The fund is backed by a few high net worth individuals, family offices (both foreign and domestic) and potentially endowments. The fund focuses on debt financing for tech lending start-ups and offers asset based financing solutions for domestic and emerging markets (Mexico/Asia). The team will be relatively lean, 1-2 IR people, 2 associates, 1 principal and 1-2 partners. The pay all-in would be roughly $130k, which is somewhat equivalent to what I make now in my LCOL city, but money will definitely be tighter. Do I take the position and use the experience to try and leverage it into a more well known private credit fund such as TPG/KKR etc. or stick do what I am doing now in Commercial Banking?
All advice/opinions are welcome and I appreciate them all. Thanks.
Ditch that Amegy/Comerica/Frost/PlainsCapital job and head west young man. How many more opportunities do you think you'll get to break into the big leagues (even if it is at a startup fund)?
You're a single dude in your 20s, now is the time to take risks.
Agreed. You can always go back to a similar career if you hate the private debt role (if you like finance, you won’t)
Contrary to the other responses, I would suggest conducting a proper level of due diligence on this small private debt shop before leaping. The fund target seems extremely small and the mentioned strategy isn’t what I would consider a typical private credit strategy (direct lending to middle market companies), but more of a small ticket structured finance strategy which is definitely a different skill set.
This is the real answer.
Those who say "you can always go back" doesn't know how much a shitty small no-name busted fund can taint your resume.
Do a proper due diligence, understand the founders' background. As someone doing buyside in Asia, I am very skeptical about the SF-based fund investing in Asia private credit thing.
They have 2 employees in Asia and 1 in Mexico. I do not think they have significant operations over there, nor rely on it. You are right, I need to do further diligence.
130k all-in (sub 100k base?) SF sounds like poverty line from what others have told me. Tough to cover expenses if your office is in expensive area of Bay Area.
While enticing, think you need to be more realistic about long term options coming from regional commercial bank and taking a MM role that could have too much emphasis on Mexico / Asia —— Ares / KKR isn’t happening (99.9%)
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