Random Things I Wished I Knew About PE
Mostly meant to be a cathartic shitpost that I'm typing in lieu of going to therapy, but I hope it resonates with the minority of this forum who aren't the insufferable fuckers that are constantly posting Tier threads. Bring on the monkey shit, but the real ones will know there's some truth here.
1. A crucial skill nobody talks about is the art of killing a deal
Harder to do this in banking because you're client-facing and literally can't say no…but in PE, you actually pass on most deals. The tricky part is when a Partner has his eyes set on some fucked opportunity that doesn't fit your mandate and/or is just kind of a shitty company overall. Maybe they're enamored by the Management team, or they think the market is going up, but you know this flaming heap of garbage will NEVER get through IC, no matter how many numbers you make up.
Your dipshit, ass-licking VP or Principal probably agrees with you privately, but they'll still go ahead and create a bunch of work to "find an angle" or "get convction" in this piece of shit, and you know what that means? More work for you.
So, you just have to continuously plant the seeds of doubt in each of the team members – continue to show them certain analyses and find new logical holes in the deal (without doing too much work) until these fuckers can't defend it any longer. "Yeah, I think this opportunity is attractive because of [x & y], but I think the gating items we need comfort on are [3 things you know the Company DOESN'T have]. I think [some IC member] will really push on this, and if we can't back this up [we can't], it'll be super hard to get this through"
Now your mid-levels are getting more nervous and don't want to get burned by the IC / spend a bunch of DD money on a foregone conclusion, and you just pray they convince the Partner to stand down. Another crisis avoided and hopefully a weekend or two saved. Keep in mind, you were supportive of this deal, but wanted to proactively flag the gating items – you were truly a value-added bottom-of-the-totem pole team member
2. Shorter hours but more stress
This is obvious for most in the industry, but yes my hours are, on average, less than banking. On a live deal, yes everything is fucked and you're probably pushing 100+ hrs, but on average I work less. However, I didn't give a single shit about what I did in banking. Seriously, like you turn comments, and when the comments are turned, you're done. Zero fucks given. First year of PE, people ain't checking shit. They might spot check that things make sense (which you obviously should do as well), but you could have a small bust in your operating model for weeks and not realize because you have a bunch of other shit to worry about.
That kind of shit eats at you, since deal teams are leaner and you're fielding a lot of "why" questions. It's actually fucking stressful and especially when you're operating on zero sleep, are doing the Memo + model, managing 3rd party DD, and are expected to have a coherent view, it's just extremely mentally taxing even if you don't really give two shits about the job
3. Many times, promotion is a game of attrition
The people that get promoted to Sr. Assoc / VP, simply put, give more of a shit. It's also important to not be retarded, but typically those people have been weeded out at this point. At this stage, you just have to have a great attitude and seriously act like you give a shit and suck some dick. You know those people that circulate industry articles to the team that they found "interesting" just for the sake of sending that article around?
Yeah, those types of people. Same people that are constantly networking, talking about work when you're at Happy hour trying to get shitfaced, etc. It's not that hard to move up so long as you just do what you're "supposed" to do, give a shit, and honestly just express a desire to not leave.
4. Sr. People aren't as smart as they're made out to be
The sheer amount of asinine questions that Partners have asked in Management meetings that show that they actually have zero clue about what the company does, is quite frankly embarrassing. Literally sometimes basic fucking questions that are answered on p. 1 of the teaser, or p.1 of that overview deck I sent them that they didn't read (surprise surprise).
This one actually isn't a huge deal – obviously the partners have a shitload going on but it is fucking hysterical to hear the CEO of a company, whom the Partner has "known" or has "connectivity into," explain their solution offering for the 5th time like they're speaking to a 5 y.o.
5. Detailed modelling is overrated
The vast majority of models are just fucking wrong when you compare actual performance vs. what you modeled. Purely a tool for CYA / liability management. It's such a tragedy to build out some monster model with a bunch of made-up drivers for every line item, just for the MD to want to sensitize Rev CAGR or CAGR. You're telling me that you don't really give a shit about the product mix shift from x to y that results in +30 bps to ? Great, because for some godforsaken reason the VP wanted to sensitize this shit for "back-pocket" purposes and I burned another late night. Oh, and the output page in the IC deck showing all these useless sensitivities got put in the back or killed because, guess what, nobody gives a shit.
Have seen some PE models (or GE) that were literally revenue growth + % margin assumptions, etc, and they've actually been way more accurate. Obviously depending on leverage, etc, you want to get granular with debt items, but most super-complicated operating builds are garbage-in, garbage-out, and everyone pretends they know shit they don't
6. Good luck getting into H/S from PE if you're overrepresented
This isn't the main point of my post or meant to be offensive in any way, but it's something that's known in the industry, and B School consultants will say the same thing. Unless you're god's gift to earth or get a good roll of the die, it is disproportionately fucking hard to get into H/S if you're a white/Asian/Indian male in finance, and that's just a reality. No matter what your stats are, there are a million overachieving, overrepresented PE Associates competing for limited spots they've allocated. Fact of the matter is, if you have equivalent stats / ECs, you're better off working in pretty much any other industry, if you strongly want to go to these schools
7. Getting staffed on an underperforming PortCo is literally the worst thing ever
Imagine you just start out and you're taking over PortCo coverage from a departing associate – super exciting opportunity to learn the ins and outs of a company and get close to management, right? No, because that Company is underperforming its underwritten case by 20% and every quarter is a clusterfuck of questions coming from the Partners & LPs, frantically emailing the management team to find "adjustments" to show co-investors that things aren't actually that bad, tons of ad-hoc analyses for why the Company is so shitty (or vice versa), and constant tense interactions with Management who probably will grow to hate your guts. Lead partner on the deal is stressed, mid-levels are stressed, management is stressed, and you're the one putting together all this work for this piece of shit Company you didn't even help underwrite. It's truly a nightmare and I wish this fate on nobody.
Anyway, that's all folks. If I get sufficiently pissed off again I might write a part 2 shitpost.