Recruiting as a New VP vs. Leaving Before Promote
How tough is it to recruit as a VP? Do I become much less "employable" (whether due to salary/too expensive, being "too experienced", or paradoxically "too junior" as a newly minted VP, etc.)?
Asking very broadly here - not necessarily just looking to go back to sell-side or lateral in PE. I'm up for promote end of year. Nothing is guaranteed, of course. When I got here I was so excited to try and make VP but now that I've gotten within spitting distance of the promotion I don't feel particularly happy. I just feel tired. Feeling particularly burned lately.
Weighing the allure of the hard-earned VP title and carry allocation against the burnout-driven apathy I've developed and wondering if I would enjoy life much more in a corp. dev. role or some big pension fund or something similarly lighter on the work end of the work-life fulcrum.
Also would be keen to hear anybody's experience in grinding thru burnout to VP, leaving as a newly minted VP, or leaving as senior / 3rd+ yr Assoc. Or any advice. Or you can shit-talk me for wanting to quit ahead of a promote that most people only ever dream about.
Bump, in similar situation
Which way you leaning?
I am leaning towards staying and taking the VP promotion but view it as making a minimum 2-3 year additional commitment to my firm. There isn't a path to partner here, and my longer term plan is to move to a spin out / start up firm at the VP/Principal level so I think that taking the promotion is the best way to accomplish this. There are other firms I could lateral to that may pay better / have a slightly different tweak on strategy but that would likely require another year or two as an associate which I'm uninterested in. I am not dissatisfied with my current set up and already function as a VP, so there is added risk that taking another year as an associate elsewhere would result in a step back with responsibility.
I do share your concern that it would be tough recruiting as a VP if you are only 1 year on the job which is why I view it as a 2-3 year thing. Some places require an MBA for VP promotion, which I don't have, so the fact my shop doesn't is also an attractive quality to me as I don't have interest in b school.
Also in a similar boat and was recruiting for a few corp dev opps. It's tough because the pay cut is pretty meaningful even for corp dev manager positions. If you go to a start-up type role you can lock in decent comp/option packages but those can be demanding in an entirely different way and are usually very unstructured. Right now exploring opportunities down market at chiller funds.
Out of curiosity, what size fund are you at?
Yeah, I feel you. I always say comp isn't a major factor for me when interviewing but it really is hard to say goodbye to such high all-in comp despite the burnout and lack of passion for the work.
I've been through 4 CD processes to varying extent over the last 6 months including one that's only just starting off now. One got all the way to a verbal offer that I would have taken before being turned completely sideways (Series-C company that course corrected mid process and killed the role I was in line for). Base salary cuts ranged from 0% (might be an anomaly) to 50% and all-in cuts started at 50% and got uglier from there.
I think my primary issue with my current role is it feels like we just do the same tasks over and over again and don't actually progress. I feel like my work isn't "producing" anything, if that makes sense. I also am not sold on the quality of senior folks at my firm
Firm global AUM is c. $10bn and my vertical/sector is pretty niche and has c. $2bn of that. My 4 PCs account for almost half that. Team in my sector is pretty lean. Great culture but not without a hefty dose of politics and meaningless wheelspinning.
If you had to make the decision right now to stay or go, what's your pick?
The alternative "split the difference" approach would be to continue through VP, fulfill the self inflicted 2-3 year obligation, and the go jump to a CD role.
That way you at least have some more cash saved and you would likely keep the carry you vested. It's a lot different taking a steep paycut when you have a nest egg compounding in the background than when you don't.
On the other hand, seems like deep down you know what it will be like being a VP there is like and you also know it isn't super appealing to you. Based on that, it's safe to say that extra 2-3 years would be pretty unpleasant, as you point out.
Sounds like you know the answer
Fair comment, and something I think about regularly. There's nuance in regards to my unhappiness though since I've lived in different cities away from my preferred location and away from my core friend group for the last 3 years since joining, and committing to the VP promote would more than likely mean another 3 years of living where I don't want to, which is not super appealing given the whole reason I took this job was to better prepare to live in my target city (ie, build experience + $$$).
I started this thread to gauge whether or not leaving as a 1st year VP is even a realistic thing to start hanging hopes on. I'd like to have the VP title under the belt and certainly would appreciate graduating from model and presentation jockey to more of a strategic/dealmaking role, from where I currently sit doing a bit of both. I'm just not sure if I want to commit to this firm for another few years.
If you want to move to another fund, it can be definitely more challenging to recruit at the VP level, and as such I would probably recommend recruiting sooner versus later. As a lateral associate, that gives you the opportunity to be up for promotion in 1-2 years in a new fund. I think this is especially the case if you want to switch investing styles or are otherwise not a super gung-ho deal lead in the industry and product type of the new fund.
In terms of grinding through to get the VP promote, that may satisfy an ego thing if that's interesting to you.. you have more legitimacy when you say that you started your career in investing (versus people who leave IB after 1 year and they say the same thing). Not a lot of tangible benefits - comp may increase a bit but if you're not staying long enough to realize carry I don't know how meaningful that is.
If you want to move to corp dev it may be a bit mixed. As a VP you may be able to sell your experience a bit more for a title with more agency, however a lot of corp dev titles depend on your years of experience so you may land around the "senior manager" title range anyway. You will probably need to take a pay cut, but it might be less than you think (i.e., you might be making $300k now and drop down to $150-225k). Think about how much you like the company and what your equity might be worth in a few years.
Alternately go take a long vacation and maybe that will help with your feeling of burnout.
Appreciate the thoughtful response.
I don't exactly want to lateral to a new fund - I think I have a great seat here in the context of PE associates and VPs. No MBA required, lean and tight-knit team, good pipeline and line of sight to a big exit and subsequent fundraise in 18 months (knock on wood), making VP = Partner track, etc. I am somewhat interested in a more off-beat path - trying to get into one of the big Canadian pension funds PE arm. Same rules apply though - I'd expect to be coming in at an associate level and having to prove myself.
It's less about pure ego and more about proving to myself that I've got what it takes, as someone who's always struggled with impostor syndrome and felt like a bit of a black sheep in this industry. I have good intel about what the pay and carry package look like and have no illusions about the liquidity horizon of the carry and the commitment associated with reaching it.
Agreed on the Corp Dev paycut thoughts. The role I'm entering a process for would include an options package too, and the recruiter has quoted me a pretty decent all-in comp target near $200k in a LCOL southern city. I've never heard of or experienced a recruiter getting comp correct though.
Very good point on a vacation. I desperately need time to unplug. Haven't had a real vacation since Summer 2019. I think it is definitely something I should do before deciding to leave - but I'm not convinced that I won't return from a true unplug with an invigorated desire to leave PE. Moving to VP and upwards means more responsibility and less true downtime - not sure I want to continue down that road.
Best of luck, a lot of good options!
The corp dev comp seems decent particularly if you can negotiate solid options ($500k+?). If you can get this offer now, you can get this offer in a year after VP promote, if that's what you want.
Following
I'm going to argue the other side against the poster above. Getting the VP bump, especially at a well known fund is a huge vote of confidence by the existing partners that you ultimately have what it takes to one day become a partner. You've clearly proven you can manage a deal and a deal team and have likely have to work through portco firedrills, exits, perhaps even a bit of fundraising, etc. Although it might make it a little tougher to go directly to a lateral VP role, I'd argue that if you're a "Junior" VP there would still be opportunities open to you at a bigger fund if you'd be open to doing a year of being a Senior Associate to prove out your work. The signaling of being a VP is important in my opinion.
On the other side, Senior Associate is for sure better than Associate, but there are plenty of 3rd/4th year Associates/Senior Associates out there, who are allowed to stay on because they don't suck, but do not have a path to VP and funds will take the relatively cheap labor understanding that the person will likely go to B-School/Lateral.
The challenge is that folks will ask you why you left after getting to VP, but if you an honest story, which it sounds like you do, then there's nothing to be afraid of in my opinion. Just because you're successful at one shop or in one area of PE, doesn't mean you have to like it enough to want to stay for the rest of your career, or at least the next 5-10 years. Many folks fall into PE after what, 1/2 years of banking. It's not hard to tell someone that you fell into...industrial PE and although you made it to VP after ~5 years, you ultimately don't want to be in that niche long term, or whatever your story is.
If you're close to VP and your ideal opportunity doesn't come up before you get the promote, I wouldn't worry too much about getting "overpromoted" for lateral roles. I'd hit VP, take a look at the comp, and then either decide to grind it out for a few years if you see some significant carry dollars coming, or get the promote, take a few weeks vacation and really evaluate what you want, and then decide if you want to quit, do it. Last thing I'd mention, don't be afraid to try and be creative with the firm you're at, assuming they're good guys/girls and presumably want to keep you. If you want to try out Corp Dev or some operating role, there might be a role for you somewhere in the portfolio if you want. Lastly, do your diligence on those big pension funds. There are some benefits, but the upside is capped and the lifestyle isn't always that much better. You'll likely work hard regardless of where you go, at least in PE you'll have an opportunity to make some significant money. Just food for thought.
For reference, I hit the VP promotion and left to go back to B-School, no regrets at all and have had multiple offers to go back into PE. Have also explored pensions, family offices, all of the "easier" flavors of buyside investing.
Appreciate the thoughtful response, cheers. Some string-of-consciousness responses and a question:
Agreed on the signaling of achieving VP. I suppose I'm burnt out to the point that I want to leave, period. Hence my thinking about leaving now vs. leaving in a year and the pros/cons of each. As another commenter also pointed, out I think you're right that I need a proper vacation before I make any decisions.
I struggle with identifying the "ideal opportunity". I'm in literally 6 processes at the moment and none of them excite me or tick all my boxes. Maybe I'm just too burnt to evaluate this stuff.
I've thought about asking to parachute down to one of the portcos. We need corp dev staff of the same financial skill caliber that PE/IB experience produces at some of our PortCos, rather desperately. My fear there is that I lose my seat and somebody better comes up to take up the slack at the GP and suddenly I'm stuck at the PortCo or having to leave.
I hear you on the pension funds. I have no illusions of what that kind of move means for the trajectory.
If you don't mind, I have a rather broad question for you about your experience in going to B School and (presumably) going back to PE. Can you elaborate: What motivated the B-School, what was the benefit, what opportunities did you review on the back of B-School, and ultimately what led you to pick your current seat? What turned you off of the so-called "easier" flavors of buyside investing?
Impossible to answer without knowing what you would be leaving to do. Where would you want to go?
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