Secondaries —> HF?
Has anyone made the move from Secondaries PE to a Hedge fund? Currently at a top secondaries fund (BX, Carlyle,GSAM,Coller) with a focus on concentrated deals and GP restructurings. Did 3 years in IB previously. Just wondering if someone with my background would have a shot at HF opportunities and which strategies would be most receptive
I certainly think you could but my guess would be that the interview focus would be on your banking background regarding technicals. Also not sure how long you have been at the secondaries spot but you might have to accept a "lower position" at the Hedge Fund - have seen a lot of people 5-6 years out of college accept the same position as the kid who just did 2 years in banking - nothing wrong with that but for some people for whatever reason is a bitter pill to swallow (most HFs are pretty flat so at the end of the day I don't think it matters). And lastly - I'm sure your skillset will fit pretty well with a fund of funds so if that's your cup of tea - my guess is that would be the easiest transition.
Hi, interested to learn what you like and don't like about your current role. Is comp on par with direct PE roles?
So its pretty decent. Comp is ~250k all in for a first year associates. For the most part, the deals are interesting particularly the GP restructurings and single asset deals. the frustrating part is the mandate for the more interesting concentrated deals is smaller than the one for more traditional vanilla LP interest deals that are pretty brutal. Theres a lot of process work and portfolio reporting and monitoring that I don't love. Also a lot of the analysis is around the GPs that you are partnering with. Depending on how concentrated the transaction is, the analysis could be 50% actual modeling, GLG calls etc and 50% analyzing GP quality. Again not a bad gig at all. The space is getting way more intense and competitive which correlates to some very brutal hours. The teams are pretty lean so you get a lot of responsibility early which is good. There is also a lot of fund modeling which I am not too fond of. Overall its a very different way of investing . Not necessarily easier but less about assessing the merits of assets and more about overall transaction structure and the GP. Screwing up asset level assumptions is much less detrimental than overestimating GP quality or screwing up a fund's balance sheet because you missed a footnote. Completely different way of thinking. Happy to answer any other specific questions!
Thanks for the detailed answer! Super helpful. Have a few more quick ones if you have time.
1. You mentioned the hours are getting brutal. Would that mean around ~80 hours a week? I guess usually you are always on a deal (if not more), so the hours are pretty consistent and don't fluctuate a lot?
2. Do you think it seems easier to make it to a senior level in secondaries compared to direct private equity? From my observation, the spots in direct private equity seem fairly limited at the top... wondering if that is also true for secondaries.
3. For your colleagues that have left the firm. Where do they typically leave to?
Thanks so much.
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Curious about your background. Did you do IB before joining the secondaries fund? Is it easier or more common to join a secondaries fund from traditional IB vs PFG/PCA?
Hi, interned at a PCA group at EVR/LAZ/PJT. Very few people exit to buyside secondaries. Not sure why. It seemed like they usually are receptive to hiring from PCA and the seniors are willing to help you recruit after your 2 analyst years.
Most common paths I saw were i) stay on as associate (comp is very good at associate+ level, top of the street), ii) lateral to M&A Banking (usually TMT) and try to recruit for PE from there, iii) few guys went to do startup / sales / family offices.
Hey,
I saw that you mentioned that you interned at a PCA group at an EB...
Did you end up returning full-time or did you re-recruit? Thank you!
Worked in a traditional IB team. I think the common stigma is on the PFG/PCA side, you don't do deep dives into single companies and get the full picture on what makes them tick and assessing merits. I cannot comment on the stigma because iv never worked in those groups. I will say for concentrated deals, the CIMs and models the sell side send over are just as detailed as anything that was made in other groups at our bank. If you can prove that you can model and value companies, you should be fine.
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