Private Equity: why it's so sexy

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I am sure many of the WSO readers are well aware of an analyst's dream paths from a BB to a large leveraged buyout shop like KKR. But I am curious to see why you think that PE is or is not all it is hyped to be. Brutal honesty is greatly appreciated.

Comments (147)

 
May 24, 2010 - 10:21pm

More money, more prestige, buy side.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 
May 25, 2010 - 12:31am

lol, shit, wish I'd thought of that.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 
May 25, 2010 - 1:36am

The joke is what I said (More money, more prestige, buy side) sounds like an ad (apparently for Obsession, by Calvin Klein)

More money, more prestige, buy side. Obsession, by Calvin Klein

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 
Jun 3, 2010 - 1:37am

What's so good about PE? (Originally Posted: 11/15/2010)

I was just wondering, what is so good about breaking into private equity as opposed to Investment banking? Is it the pay? The long-term growth opportunities within the firm? Why do people consider this an alternative to IB?

Thanks

 
Jun 3, 2010 - 1:45am

Why is private equity career so attractive? Power of Money and Intelligence (Originally Posted: 06/01/2015)

Today there was a newspaper article about private equity fund, withdrawal of investment from private equity funds. I have never been drawn to a career in M&A, but I do find a career in private equity somewhat attractive. For example, I am not a big fan of businessmen biographies, but I do like Warren Buffet. Today I came to a working conclusion that it's the money and risk-taking that make private equity so attractive for those of us in finance.

I am using this post to organize my thought. All thought expressed is my own.

I have worked at an advisory only boutique, I found what they did "not convincing" and analysts and associates knowledge of corporate finance was quite frankly poor. CFA Level 1 or less, I should think. I remember this one associate or analyst (can't remember which) talking so proudly about deferred assets or the concept of deferred assets. Now this is one of the most challenging areas in accounting and those with decades of experience still can't really explain why there should be deferred entries. Not prepaid, not valuation allowance, deferred assets and liabilities. Think conceptually what they are and what they are there for. I don't understand it. Or talking so proudly that they "get the idea of leverage (private equity)."

Most importantly, they didn't commit their capital, so the worst case, they just worked for free at the expense of clients time and resources in my view. The clients can possibly learn something out of it, but they come to those boutiques with specific problems. They don't come to a boutique to "learn", but to "solve problems."

In my view, advisory business is just that. Learning problems for themselves, not solving them for clients. I think one can say the same thing for management consulting.

Private equity is a bit different. Private equity funds do the fund-raising just like any other funds. But what they are effectively doing is to take ownership of the company and they get their hands dirty and turn the business around. In so doing, they get to experience what "advisors" never experience such as what if you bought one company and you found out that the CEO was using the company's money to pay for his mistresses home (and had a child with her). You might discover inventories that you never knew existed. One day you walk into this big warehouse and you found things you never dreamed of. Their incentive is that they put their money on the table, they are already committed and have to find ways to turn the business around. Or they would have wasted their time and money.

And the risk is higher. After all, you are not buying a stock which you can get rid of at a loss in a highly liquid market.

2 lessons that I have learned working for an advisory boutique is that, in my view, (1) they CAN be irresponsible, (2) those with money have the final say, at the end of the day, your valuation didn't matter, but a word from those with money was what mattered. The second being the most important.

Private equity gets rid of both of those problems. At the end of the day, I want to work. I don't just work for money, I don't just work for "Mr Big", I want my input to matter, what I say and what I do to matter.

 
Jun 3, 2010 - 2:08am

What is the hype about? (Originally Posted: 01/24/2007)

I'm wondering what is the hype with PE shops? Is it the compensation/lifestyle combination that is making it so attractive to bschoolers and other analysts? The actual work being done?

Might be a newbie question, but thanks anyways.

...
 
Jun 3, 2010 - 2:22am

What's so great about PE? (Originally Posted: 12/07/2009)

Now before you go ahead and rip me to shreds for asking what may be perceived on this board as a naive question, please humor me and be honest. I am very curious about what is so great and glamorous about PE. I know it pays well, but how much is "pays well" and im particularly speaking about pre-MBA associate level.

Is it the hours, money, work? What makes Private Equity such a glamorous and glitzy job? It seems like its something between banking and consulting which I guess is what pretty much everyone does here, but is there something else I'm missing? Also, when they say hours are better than banking, are we talking 9-7 pm good hours or are we talking 9-midnight good hours?

Thanks in advance

 
Jun 3, 2010 - 2:23am

I have read many threads on this, and what I have gathered (novice speaking) is that the comp and hours are comparable to banking at the junior levels, but having pre-mba PE experience is what gets you into the mega funds like KKR and Blackstone, which, again, right out of MBA is comparable comp and hours. The big difference is at the more senior levels where carry comes into play, where senior guys make 10s to 100s of millions where an MD or Director in banking will make $1-5MM in a good year.

Please correct me if I am wrong.

 
Jun 3, 2010 - 2:27am

if you like being the one steering, actually seeing your recommendations seeing light and follow them through, pe's the thing. all previous posts taken into account of course.

"... then, lobbest thou thy Holy Hand Grenade of Antioch towards thy foe, who, being naughty in My sight, shall snuff it."
 
Jun 3, 2010 - 2:29am

Boutique Banking:
Its the combination of portfolio company operations as well as financing that makes PE attractive to me. As a senior guy at a PE firm you are much more highly involved on the operations side of the business, as apposed to no operations say in IB.

For me it's the exact opposite. I would much prefer to stay out of PE and rather work in a L/S or global macro HF so I don't have to argue with management. Still, I can see how that can be really attractive to some people.

 
Jun 3, 2010 - 2:31am

It sounds to me that a few people in this thread think that if you are in PE that you get deep into running a portco. Maybe at the highest level, if you are a partner you might help make some decisions, or if you are an operating partner brought on solely for that purpose (to work with portcos), but life at the junior level is far different. It might be on the buy side, but it's still a transaction-oriented business. Don't get the wrong idea and think that being a PE associate makes you some sort of kingpin.

 
Jun 3, 2010 - 2:34am

TheKing:
It sounds to me that a few people in this thread think that if you are in PE that you get deep into running a portco. Maybe at the highest level, if you are a partner you might help make some decisions, or if you are an operating partner brought on solely for that purpose (to work with portcos), but life at the junior level is far different. It might be on the buy side, but it's still a transaction-oriented business. Don't get the wrong idea and think that being a PE associate makes you some sort of kingpin.

This is correct if you work at a Blackstone/KKR type place. If you really feel passionate about PE and want the exposure to management/operations level issues you can go to a smaller fund. I'm not saying your running portcos at age 30, but after a few years you will get decent exposure.

 
Jun 3, 2010 - 2:49am

TheKing:
It sounds to me that a few people in this thread think that if you are in PE that you get deep into running a portco. Maybe at the highest level, if you are a partner you might help make some decisions, or if you are an operating partner brought on solely for that purpose (to work with portcos), but life at the junior level is far different. It might be on the buy side, but it's still a transaction-oriented business. Don't get the wrong idea and think that being a PE associate makes you some sort of kingpin.

This is completely correct...most of the time. I know that there is a Blackstone PE third-year analyst who's been on the Board of Directors of one of their portfolio companies (Financial Guaranty Insurance Company) since his second year on the job. Look it up if you don't believe me.

 
Jun 3, 2010 - 2:50am

Imperial Financier:
TheKing:
It sounds to me that a few people in this thread think that if you are in PE that you get deep into running a portco. Maybe at the highest level, if you are a partner you might help make some decisions, or if you are an operating partner brought on solely for that purpose (to work with portcos), but life at the junior level is far different. It might be on the buy side, but it's still a transaction-oriented business. Don't get the wrong idea and think that being a PE associate makes you some sort of kingpin.

This is completely correct...most of the time. I know that there is a Blackstone PE third-year analyst who's been on the Board of Directors of one of their portfolio companies (Financial Guaranty Insurance Company) since his second year on the job. Look it up if you don't believe me.

I could see situations where, for governance reasons, the PE shop ends up having a bunch of seats on the Board and needs to fill them, so they end up tossing one to a junior person. If the analyst is on the Board, I'd bet he's #2 or #3 from the firm. No matter how much of a whiz-kid you are, it's hard to think you bring much value to a corporate board with a couple of years work experience.

 
Jun 3, 2010 - 2:32am

TheKing is correct. Only at the MD level will you be sitting on Boards of Directors or making big hiring and firing decisions at portfolio companies. Also, to address the initial point, while in good times the "home run fund" in PE may yield significantly more compensation than a good bonus for an Ibanker, the pay is [generally] not quite as different as people tend to think. Carried interest is great but most funds do not pay carry until after they earn 8-10% annual returns over the life of the fund. In other words, many funds raised in the past few years will probably never reach the carried interest level. Then, the salaries (for several years) come only out of the 2% (generally) management fee and with all of the limited partners( same as operating partners TheKing alluded to) the numbers are not as astronomical as you may think. Because, think what else comes out of that 2% (flights to and from meetings, company overhead, secretaries, technological infrastructure, other support employees). If your fund does not hit the carry mark your comp will resemble that of banking, possibly even less.

 
Jun 3, 2010 - 2:45am

cheese86:
TheKing is correct. Only at the MD level will you be sitting on Boards of Directors or making big hiring and firing decisions at portfolio companies. Also, to address the initial point, while in good times the "home run fund" in PE may yield significantly more compensation than a good bonus for an Ibanker, the pay is [generally] not quite as different as people tend to think. Carried interest is great but most funds do not pay carry until after they earn 8-10% annual returns over the life of the fund. In other words, many funds raised in the past few years will probably never reach the carried interest level. Then, the salaries (for several years) come only out of the 2% (generally) management fee and with all of the limited partners( same as operating partners TheKing alluded to) the numbers are not as astronomical as you may think. Because, think what else comes out of that 2% (flights to and from meetings, company overhead, secretaries, technological infrastructure, other support employees). If your fund does not hit the carry mark your comp will resemble that of banking, possibly even less.

The industry has about 4,000 investment professionals (deal team) and accounts for 5% of the world's billionaires, the compensation in PE is on average MUCH HIGHER than banking

 
Jun 3, 2010 - 2:47am

mmonkey:
cheese86:
TheKing is correct. Only at the MD level will you be sitting on Boards of Directors or making big hiring and firing decisions at portfolio companies. Also, to address the initial point, while in good times the "home run fund" in PE may yield significantly more compensation than a good bonus for an Ibanker, the pay is [generally] not quite as different as people tend to think. Carried interest is great but most funds do not pay carry until after they earn 8-10% annual returns over the life of the fund. In other words, many funds raised in the past few years will probably never reach the carried interest level. Then, the salaries (for several years) come only out of the 2% (generally) management fee and with all of the limited partners( same as operating partners TheKing alluded to) the numbers are not as astronomical as you may think. Because, think what else comes out of that 2% (flights to and from meetings, company overhead, secretaries, technological infrastructure, other support employees). If your fund does not hit the carry mark your comp will resemble that of banking, possibly even less.

The industry has about 4,000 investment professionals (deal team) and accounts for 5% of the world's billionaires, the compensation in PE is on average MUCH HIGHER than banking

mmonkey, gonna have to agree with cheese on this one. While your "average" calculation may be correct, simply due to the astronomical upside that a few outliers have experienced, your sample size of 4,000 (not sure the source) doesn't sound like it includes all the people that worked in the industry and left, having never made the kind of money you're talking about. Talk to any senior bankers or PE guys and they'll basically tell you what cheese did. PE is not an automatic ticket to astronomical wealth. At the end of the day, the average PE guy makes similar comp to a good banker. If you're a star at a great fund, you can make a lot more.

 
Jun 3, 2010 - 2:48am

mmonkey:
cheese86:
TheKing is correct. Only at the MD level will you be sitting on Boards of Directors or making big hiring and firing decisions at portfolio companies. Also, to address the initial point, while in good times the "home run fund" in PE may yield significantly more compensation than a good bonus for an Ibanker, the pay is [generally] not quite as different as people tend to think. Carried interest is great but most funds do not pay carry until after they earn 8-10% annual returns over the life of the fund. In other words, many funds raised in the past few years will probably never reach the carried interest level. Then, the salaries (for several years) come only out of the 2% (generally) management fee and with all of the limited partners( same as operating partners TheKing alluded to) the numbers are not as astronomical as you may think. Because, think what else comes out of that 2% (flights to and from meetings, company overhead, secretaries, technological infrastructure, other support employees). If your fund does not hit the carry mark your comp will resemble that of banking, possibly even less.

The industry has about 4,000 investment professionals (deal team) and accounts for 5% of the world's billionaires, the compensation in PE is on average MUCH HIGHER than banking

How scientific!
 
Jun 3, 2010 - 2:35am

Agree with all of the above. I'd also note that most PE shops take transaction fees from their deals which also contributes to bottom line comp (or on top of the 2% management fee).

To caveat, I think my PE experience has been different than most but here is my 2 cents. I've found the work to be much more interesting. The bigger shops are definitely transaction geared for the junior folk but the smaller shops will offer a much more hands on experience (not just 'deal making' but active in operational enhancements, developing relationships with portco management, etc.) It also depends on how the PE shop runs its business; some have clear delineation between origination and portfolio management, some blur the lines, and some will require people to do both. I've pulled the long hours in both PE and banking -- i've never wanted to kill myself PE. The long nights were actually interesting and of substance, not just running edits/re-running sensitivities, etc.

 
Jun 3, 2010 - 2:38am

HerSerendipity:
Agree with all of the above. I'd also note that most PE shops take transaction fees from their deals which also contributes to bottom line comp (or on top of the 2% management fee).

To caveat, I think my PE experience has been different than most but here is my 2 cents. I've found the work to be much more interesting. The bigger shops are definitely transaction geared for the junior folk but the smaller shops will offer a much more hands on experience (not just 'deal making' but active in operational enhancements, developing relationships with portco management, etc.) It also depends on how the PE shop runs its business; some have clear delineation between origination and portfolio management, some blur the lines, and some will require people to do both. I've pulled the long hours in both PE and banking -- i've never wanted to kill myself PE. The long nights were actually interesting and of substance, not just running edits/re-running sensitivities, etc.

You make some good points. What I was alluding to is that people need be realistic. You aren't going to be some Xerxes-level God King.

If you want to run a business, start a business.

 
Jun 3, 2010 - 2:40am

Happens quite frequently at my shop. Some associates decide that they would like to gain some operational experience prior to going to b-school, others decide PE isn't for them and join the port co.

CompBanker

 
Jun 3, 2010 - 2:42am

I'm going to respectfully disagree (and shed a tear for) commentors that are stating that Associates at PE firm's are transaction-oriented monkey's with no involvement with the Portfolio Company. If you have managed to land yourself at such a firm, 1) That sucks and 2) Run. For me, the pure draw of PE is the ability to interact with various Portfolio Companies and gain operational experience that informs your investment strategy. My experience is solely in the middle market, however, and I know very few people at the mega-shops, so I can't speak to that experience. However, given the small sizes of most mid-market firms, I'm not even sure how work would be divided if junior professionals were treated like pitch-bitches. To me, 'PE is so great' because you get to think like an investor by trying to learn as much as possible about how to run a good company with healthy cash flows. If you're not doing this, seriously, find a new firm.

 
Jun 3, 2010 - 2:43am

I work at a large middle-market private equity firm where responsibilities at the junior level are quite transaction-oriented, and my involvement with portfolio companies has been quite minimal. I moved from sell-side to private equity with the aspirations of learning more about strategy and operations, and while there are definitely shops where you can do that, I generally believe that at larger shops, the role is more transaction-oriented in nature. I do think the work-life balance in PE is better than in banking, but for me, what I've realized after spending five years in finance is that it's still a grind and I personally see myself as someone that's more interested in strategy and management. That's why I'm going to get my MBA in fall of 2010 and hopefully move into strategy consulting, business development, or something like that.

Anyway, there are a lot of great things about PE, especially if you love the deal business and investing. For me, I realized that I didn't live and breathe it the way the senior people did, and like most careers, it's best to be really passionate about what you do in order to get ahead. For me, I just have realized that my cup of tea is something different. You all should find your own paths and don't worry about drifting from the crowd. I know that sometimes hard to do since most people in investment banking just tend to follow a "path", whether that's the best for them or not. But in any case I wanted to echo the sentiments of most others on this thread, namely that if you're really interested in portfolio company work and long-term business planning and improvement, your involvement with such work in PE will be fairly limited at least until you become VP or above -- and even then, you're just sitting on the board providing oversight. It'll be the management teams of the companies, or your firm's operating partners, that are making the real decisions about strategic improvements.

Hope that sheds some light on how many typical PE shops work (though there are always exceptions to the rule).

​* http://www.linkedin.com/in/numicareerconsulting
 
Jun 3, 2010 - 2:44am

The past 4+ years have been an interesting time to be a part of the PE industry. As you can imagine, what is so great about PE has changed significantly over the past 18 months.

Pre-crash: deal flow was robust, CIMs flowed across my desk like manna from heaven, CMBS debt was abundant, leverage levels were ridiculous, everyone and his mother wanted in, closing dinners/celebratory lunches/black tie charity events were frequent, hours weren't so bad 60-80 depending on the deal cycle

Then came the storm, credit dried up, everyone panicked and portfolio companies went into survival mode

We cut the sht out of companies, tried our best to renegotiate terms and do the best we could with the little slack we had. In several instances, we suffered BKs but our remaining portfolio companies came out surprisingly healthy.

I enjoy the network and relationships that I have been able to build over the years through exposure to our portco management teams, limiteds, bankers, lawyers, etc. I love the granular perspective from which I get to review our portcos and I appreciate the fact that even from day 1 I have been exposed to all aspects of the deal cycle and the closed door negotiations. The hierarchy at my shop is very flat and my superiors are generally offended if I refer to them as anything other than friends or colleagues.

The best part of PE = carried interest and culture. Carried interest creates a culture that is aligned. Because PE shops generally run quite lean, managers are able to augment and cultivate a culture of camaraderie and teamwork. I enjoy coming to work everyday because I care about the people I work with, they care about me and we are all working toward a common goal.

 
Jun 3, 2010 - 2:51am

I don't know what the fuck you guys are talking about. I've worked quite a bit with one mega fund in particular and the amount of responsibility JR team members take on is astounding.

Case in point, an associate,principal and founding partner are leading an acquisition at X top mega fund... associate single handedly makes the call to up the bid by 10-20% ($1-2B). A year and a half later, I cross paths with the Associate again... he's a principal and sitting on the BOD of one of their PortCo's. This obviously varies with the degree of BSDness possessed by JR team members and firm culture, but it seems everyone is making blanket statements and I've personally seen that is just not always the case. Another associate was leading an investment bid with another one of the founding partners... calling some pretty important shots.

Array
 
Jun 3, 2010 - 2:53am

Marcus_Halberstram:
I don't know what the fuck you guys are talking about. I've worked quite a bit with one mega fund in particular and the amount of responsibility JR team members take on is astounding.

Case in point, an associate,principal and founding partner are leading an acquisition at X top mega fund... associate single handedly makes the call to up the bid by 10-20% ($1-2B). A year and a half later, I cross paths with the Associate again... he's a principal and sitting on the BOD of one of their PortCo's. This obviously varies with the degree of BSDness possessed by JR team members and firm culture, but it seems everyone is making blanket statements and I've personally seen that is just not always the case. Another associate was leading an investment bid with another one of the founding partners... calling some pretty important shots.

apollo mgmt? mb cerberus?

this is not common at large private equity firms

 
Jun 3, 2010 - 2:54am

TheKing:
You make some good points. What I was alluding to is that people need be realistic. You aren't going to be some Xerxes-level God King.
If you want to run a business, start a business.

Would working in PE provide the training/operational experience to start your own business / buy out someone else's failing business and turn it around? I'm thinking smaller businesses worth anywhere from $2-5mm.

My name is Nicky, but you can call me Dre.
 
Best Response
Jun 3, 2010 - 2:55am

I did 3 years of banking as an analyst and then spent several years as an associate at a large MM PE shop. I absolutely hated my life in banking for all of the reasons everyone hates it - constant pitches, dick MDs, power naps in the bathroom stall, etc. When I made the move to PE, I was much happier for the following reasons (note that not all PE funds are created equal and many still have the ibank mentality with long hours, face time, "busy" work, etc.. Also i'm writing from the perspective of an associate):

  • Hours are better. Not 9-5 but when you've spent 3 years coming home everyday after 11pm, working 60-80 hour weeks feels short.

  • Culture is much better - not as much "busy" work... meaning making sure a deal is a real deal before spending a significant amount of time on it... (vs. in banking, building a model for every damn pitch). Also, when I was in banking, face time was a pain in the ass. I don't think there is any business where you don't have to deal with face time, but I think in PE it is generally more lax.

  • Relationship building. In working in PE, you will build relationships with CEOs, CFOs, COOs, directors of corporations, at the target, when/if you hire a third party advisor and at your portfolio companies. I value this because when/if I ever decide to leave PE, these are some of my exit opportunities. For example, I worked extremely well with the interim CFO of a target company. After he left and went to another business, he asked me to come on as VP finance.

  • Pay is great. I'm not sure about the 2% management fee ppl were quoting above - from my experience, PE funds need to pay back 2% management fees (which are collected to pay salaries/cash bonuses and other expenses related to running the fund)... Meaning when you exit an investment, the carry % is calculated from a total purchase price that is net of accrued management fees across all portfolio companies. Anyway, this probably doesn't apply to associates at most funds since there is no carry at junior levels, but a good exit could mean a payout of $500K-$1M at the VP level (much higher for partners obviously).

  • Working with portfolio companies post close is great. I enjoy taking part in strategy sessions and board meetings and working actively with management teams to improve businesses. This combined with the next bullet are two things I think that really prepare you for anything, whether it's a consulting role in the future or starting your own business.

  • Knowledge learned is much more interesting and valuable. Admittedly at the associate level, you're still doing a lot of work an analyst does in banking (models, presentations, memos) but you're also spending more time learning about different businesses, industries and most importantly what makes a business successful. Even at the senior levels, I don't think bankers generally have a solid grasp of how a business is run. This isn't their fault - they are just the middle man in an M&A deal and don't need to dig as much into the details. In PE, you're literally working hand in hand with management teams to learn everything you can about the business and build a valuation model to come up with the right bid price and investment thesis. The bottom line is when taking a deal to investment committee, you better damn well know the business inside out, know every potential risk and mitigant, and be able to answer any question the committee asks... even as an associate.. because if the committee asks the deal lead a question he cant answer, he'll look to you for help. I think this is what I love most about PE... being able to learn about all sorts of different businesses and business models...now with all of the deals I've worked on, I can go into a meeting with any management team and have an intelligent conversation around how they run their business. The carry, pay, prestige, it's great, but what really keeps me here and continually interested is this.

 
Jun 3, 2010 - 3:03am

Noob question - Why PE? (Originally Posted: 05/23/2008)

Okay,

I am not in the finance industry (obviously), but I have a growing interest in I-Banking. I hear a lot about PE and from what I understand they buy up under-performing companies and re-manage them back to health and sell for a huge profit. I have a decent idea of what the average day is like for a post-MBA at a bulge bracket IB, but what is the average day like at a PE firm? What do you do?

Thanks.

 
Jun 3, 2010 - 3:05am

Why pe? (Originally Posted: 07/21/2010)

Why do people who have just started or never done banking always say private equity is the next step. Is it just the easiest answer? Is the pay and lifestyle really that much better? Also, doesn't it suck that you no longer have a large group of people your age to hang out and bitch to? What are the actual pros and cons of each for people that have actually done it?

 
Jun 3, 2010 - 3:27am

Top PE Funds--Why? (Originally Posted: 03/04/2010)

Forgive my ignorance, but can someone explain exactly why PE funds such as KKR, TPG etc. are so coveted? Is it prestige/money? I guess I don't understand why someone would work so hard in banking for their analyst years and then move on to work at a fund where they work just as hard. By what I've read here, it seems the analyst years are the "golden ticket" to a role that is still demanding, but with fewer hours. Is going to KKR safer than going to another, less known PE fund?

 
Jun 3, 2010 - 3:37am

MezzKet:
get the most prestigious salary and deals on wallstreet... then you can roll-over and die like Wasserstein.

you forgot the part where you go bald, gain weight, age fast, look ass ugly and lose your health..and then roll-over and die (like Wasserstein did)
 
Jun 3, 2010 - 3:33am

I think it's almost all about prestige for a lot of people. So many analysts have always been at the top of their class in everything they've done, and it just doesn't compute for them not to pursue the most prestigious PE opportunities. That said, I think far too many analysts, heck, far too many people, put too much value on prestige. I've seen some of my peers pass up bird in hand offers with great PE funds just because they had an interview with Blackstone, for example, even though they may have enjoyed life a lot more (and still gotten paid well) at a "less prestigious" shop.

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 
Jun 3, 2010 - 3:34am

Private Equity International last week just came out with its annual "Top Private Equity Firms" rankings, which is based on votes by thousands of people they survey WITHIN the industry. PE rankings are always much less meaningful than, say B-school rankings (which is arguably overrated to begin with), but I think PEI is considered the "U.S. News" of private equity rankings, and may serve as one interesting perspective / data-point

This year the top shops are KKR, Hellman & Friedman, Apax, and Oaktree. I think you may need a subscription to see the detailed rankings, but you can see who were rated #1 for each of their categories within various geographies.

http://www.peimedia.com/Pages.aspx?pageID=2739

hope this is helpful

 
Jun 3, 2010 - 3:38am

kalice123:
Private Equity International last week just came out with its annual "Top Private Equity Firms" rankings, which is based on votes by thousands of people they survey WITHIN the industry. PE rankings are always much less meaningful than, say B-school rankings (which is arguably overrated to begin with), but I think PEI is considered the "U.S. News" of private equity rankings, and may serve as one interesting perspective / data-point

This year the top shops are KKR, Hellman & Friedman, Apax, and Oaktree. I think you may need a subscription to see the detailed rankings, but you can see who were rated #1 for each of their categories within various geographies.

http://www.peimedia.com/Pages.aspx?pageID=2739

hope this is helpful

....this is like any other ranking magazines, firms pay the magazine to get ranked...

the #1 def. doesn't make any sense. HF....?....#1 for two years?...is that a joke or am I missing something here....and wtf Oaktree? Since when is Oaktree in the PE category....

 
Jun 3, 2010 - 3:52am

kalice123:
Private Equity International last week just came out with its annual "Top Private Equity Firms" rankings, which is based on votes by thousands of people they survey WITHIN the industry. PE rankings are always much less meaningful than, say B-school rankings (which is arguably overrated to begin with), but I think PEI is considered the "U.S. News" of private equity rankings, and may serve as one interesting perspective / data-point

This year the top shops are KKR, Hellman & Friedman, Apax, and Oaktree. I think you may need a subscription to see the detailed rankings, but you can see who were rated #1 for each of their categories within various geographies.

http://www.peimedia.com/Pages.aspx?pageID=2739

hope this is helpful

Can someone post the rankings for the top 20 or so firms on this list? I'm interested to see how the votes turned out, but don't want to get a subscription just for this. Thanks in advance and silver bananas for whoever does it.

 
Jun 3, 2010 - 3:43am

How can you say that money makes it all worth it in the end when A) you dont have the "money" (at least relatively speaking) and B) you are nowhere near the end?

I would say that prestige is more heavily correlated to power than to money although they are of course interrelated, at least thats what I remember hearing in the The Lox song

 
Jun 3, 2010 - 3:47am

If you asked me a year ago, I would have said the money/prestige. My bro is a great guy, but kind of lazy... he just cashed in on a pretty simple idea and is now retired. He is 19 and has already made more than 75% (a made up number, but you get my point) of all those MD's/Wall St Ballers make in a lifetime. The truth of the matter is that anyone who is looking to get rich should do something else. I am sure if you asked a banker/pe associate after a few years whether the money/prestige is worth the work, I don't think everyone would say yes. You have to enjoy the work (to some extent) and have to want to be there. This is just my humble opinion of course.

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