Taking the plunge.. from New Zealand

Hi everyone,

Long time lurker here and have learnt a tremendous amount from everyone, but would really appreciate some personal advice with what direction I should head in. Thanks heaps in advance.

Background: Have been in tech consulting a couple of years, enjoying it, and looking to make the smartest move from here. I have an undergrad in SWE and finance, and am trying to decide whether I make the switch and try my hand at finance.

Interests: Unfortunately, I have a genuine interest in both tech and finance, and so going with what I enjoy leaves me in the same spot.

Options: My primary question is whether it is worth the risk to shoot for a role in PE. The plan would be to try land a role in IB, or Big 4 corporate finance and then into IB, and then PE. My main concern is whether it's worth dedicating 4-5 years to try get in, when the odds look pretty strongly against me. GPA is strong and I think I'd have a shot but I'm most conscious of the fact that I've taken a non-traditional background, would be coming up to 30 years old by the time I interview for PE and would be competing against 23 year old guys who did a quick finance degree and went straight into IB. Combined with the fact that there's only a handful of PE analyst jobs in NZ, I imagine it would be pretty impossible, unless I went overseas, which I could do however I would like to have my long-term career in NZ.

If PE didn't work out I could transition into corp dev/ corp fin/ public fin, but I might not find it as interesting and might shift into corp strat or shift back into tech. Would be hard to do anything heavily technical for the tech so would probably shoot for product management.

Alternatively, I could stay in tech which would mean doing some more tech consulting, potentially going for something technical in data science/ai/ robotics, product management and/or trying to start my own thing. I expect staying in tech for these next few years would put me in a much better position for tech entrepreneurship and management compared to trying out finance and then switching back. Although, having a finance background can still quite helpful when you become more senior in any corporate role.

Summary: Staying in tech would be safe and give me a lot of options, with some reasonable earning potential. Trying to land a PE gig would take a lot of investment, which would be epic if I can pull it off, but might be a bit of a waste if I can't (which is the more likely situation). So, is trying for PE worth it, or are the chances just too slim?

If you made it to here, cheers for reading, would love some input, and hope you're all doing well during these globally difficult times.

Comments (19)

 
  • Analyst 1 in IB-M&A
Apr 6, 2020 - 2:37am

Not sure I can be much help because I'm not super familiar with the PE landscape in NZ, but I have some general thoughts:

  • Are you interested in tech investing? It seems NZ has a rapidly-growing tech/entrepreneurship sector (sounds like you're involved in it), and it could make sense for you to try to land a role directly in VC there. Not PE, but you'd still be on the buyside, making investments, and your path into it would be much clearer. Based on the tech activity, there's probably a growing VC scene there anyways.

  • If you were American, I'd say your best bet to go from where you are to IB to PE would be to get an MBA, recruit for tech IB, and then go from there, but I'm not sure if that's common or would be worth it in NZ.

It might just make sense to build a personal brand in the NZ tech scene and then go from there into entrepreneurship, management, or VC... If you're really set on PE, there's probably a way in. Leverage your network.

Good luck and hope you're doing well, too!

 
Apr 10, 2020 - 5:10am

Thanks for your thoughts bro! Appreciate that.

Good point re still being on the buy side with VC, I guess what I find most attractive with PE is the deal sourcing, investing and operational improvements, rather than the modelling and due diligence, so VC would still be a good fit. Just concerned about how getting VC seems a lot harder and less of a career path and more of a getting lucky situation. PE also seems to have greater stability and comp.

Regarding the viability of getting into PE, I would probably recruit for IB now rather than MBA since it seems like you need PE experience before MBA to get into PE post-MBA. You seem pretty positive about being able to get into PE, so if I was in America would you say I would have a reasonable shot and it's worth putting in the effort? I'd be happy going overseas temporarily if that's needed.

Also, if I was to pursue PE, how valuable do you think the finance skills I develop from IB would be if I was to jump back into tech?

Cheers!

 
  • Prospect in IB-M&A
Apr 14, 2020 - 4:19am

Hey Mate,

Hopefully I can shed some light on the industry as I was considering relocating to Sydney and doing PE there. As you can imagine, the vast majority, if not all, of the PE activity is done out of the Sydney/HK/Singapore hubs. Most of the professionals in PE in Sydney that I've met either have IB experience in Sydney or in an Asian hub. All major firms (BX, KKR, Carlyle etc) have offices in Sydney, however they are very small and usually consist of one partner and a couple MDs (but may be worth checking out). It is also worth considering that the PE market in Australia is tiny relative to other regions and NZ's is even smaller. HOWEVER I do believe that if you make the right connections you would be able to pull it off. I would maybe try and get into ANZ's/Commonwealth's PE/Principal Investing platform and go from there. Wellington could also be a cool opportunity as the tech scene is growing rapidly with lots of encouragement from the NZ government. You mentioned you are interested in tech, but I believe the best PE vertical to go into in Oz/NZ is real estate due to the crazy prices (I'm sure I don't have to tell you haha). Let me know if I can help answer any other questions! Cheers.

 
Apr 15, 2020 - 3:42am

Hey cheers mate, really appreciate the insight into the NZ market. That was along the lines of what I was thinking - if I want to do PE it would be best to go overseas. That shouldn't be a problem however it does put a few points on the board for staying in tech since I would still have the option of staying in NZ. Another question I had was whether you think the finance background I would develop through being in M&A would be helpful or a hindrance for pursuing a career in tech management? I imagine that going from where I am now straight into product management would be better than diverting into finance and then coming back in later on? How much weight do you think doing a 2 year stint in IB would carry outside the finance industry, in tech management?

 
  • Prospect in IB-M&A
Apr 15, 2020 - 3:50am

If you want to do tech management, going into a product management role would be better as there is a natural pipeline from the role. HOWEVER, I do think there is tremendous value in doing an IB stint as it opens more doors. It also all depends on how you market yourself, for example, if you go overseas and do an IB stint and come back with that overseas transactional experience, I am sure companies would love that. You also have to remember that NZ heavily relies on talent and capital from overseas and so any experience interacting with foreign markets is beneficial. It all depends on a) how open you are to moving overseas at this point b) how much you enjoy product management. Another option I was thinking about, very NZ specific, is big 4 consulting. Queen St has basically every major international consulting firm and you can definitely leverage that experience while networking within NZ.

 
Most Helpful
Apr 14, 2020 - 4:33pm

First, I can't really help you in regards to anything NZ specific. I'm woefully ignorant of the finance environment there. My advice would be ignore the age at which you'll be breaking in. In so many years you will still be the same age, regardless. Time stops for no one. The question is, will you be doing what you truly love to do, or have you compromised a bit more than you would have liked to. How interested, truly, are you in the finance side of the tech industry vs actual execution. Of course there are a myriad of positions that would likely fulfill you, you have to ask yourself the honest question of what would make you MOST happy. If the answer is tech PE then go for it. Doing a few years in IB would be a great way to make doubly sure you enjoy the deal execution part of the job and if you hate it you can always go back. If you are visualizing your future and being in upper management at a software company is just as exciting as a partner in PE then I'm not sure the switch would be worth it for you. Did you have any finance related internships while you were in school?

Case in point, a long time close friend and confidant is a director of R&D at a mid-sized early stage software company. We often talk about each others day to day, novel trends we see, etc. Once he asked me if I thought he could do what I do. After a few glasses of scotch and several hours later we came to the conclusion that yes, he could very likely do what I do and have been just as good at it as me. However, he would not enjoy it as much as he does his current role. Then looking at me and my background (compsci nerd in highschool), we came to the same conclusion for me. Could I have done it and excelled at it? Yes, but for me I have found the career that suits me best.

Hopefully my bored COVID quarantine drivel has been helpful. Happy to answer any questions you may have as ~90% of my time is spent on software.

 
Apr 15, 2020 - 6:16am

Hey thanks for the input, really appreciate that. Great point regarding whether I'm genuinely more interested in the finance or execution. I think I probably do lean towards the execution, which is why PE would be a great fit due to the interaction with operations which you don't really get in pure finance. Unfortunately I wasn't wise enough to distribute my internships across different industries, really should have spread them across tech, strat and finance. Instead just ended up focused on tech.

I do see myself fulfilled in an upper management role in a tech company, hence my hesitation to put in alot of effort to try the PE route when I guess I do have a perfectly good option in front of me.

Right now I'm leaning away from PE due to the level of commitment, competition and uncertainty as to whether it would be actually end up being the right thing for me, it's a pretty big bet. However if doing a few years in corp finance --> IB are a good thing for my career regardless, then I could be happy to try that out. Which leads to the other question I had, on which it would be great to get your input. I've asked this above in my response to Prospect's reply but would appreciate your thoughts:

How beneficial would a few years in finance right now be for me in accelerating my career to upper management in tech? It seems like alot of CEOs have a finance background, hence my inclination to think that finance is a useful skillset to have, but then again I'm not sure if a few years in finance in my mid-20s would constitute a real finance skillset relevant for management positions. I'm also thinking about the exit opportunities from IB into industry, I know that corp strat is a viable exit opp, but could I achieve this just as easily by spend those years I would spend in finance instead doing product management? Could staying in tech/strat consulting also potentially keep corp strat open for me just as well as IB would? It also seems like IB would cut me out of anything more technical than corp strat, making any technical/architect roles or even product management a challenge to come back to. So, would you say spending the next years in finance would be more of a help or a hindrance if I head towards tech management afterwards? Can you see any other benefits for finance in my position, such as potentially giving me exposure to other industries beyond tech, incase there's a chance that I might actually be more happy to pursue management in a different industry?

 
Apr 15, 2020 - 6:59pm

I honestly don't see taking a finance detour as something that would be beneficial for you. For your own knowledge and some anecdotal benefit for capital raise situations and the like yes, but beyond that I don't think it will help much. Pushing forward as quickly as you can on the management side would also potentially open up doors for the possibility of becoming an operating partner or executive in residence for a fund.

Another thing to think about is that while most of PE loves to beat the drum about how they fix broken companies, help with strategy, etc., a very large part of this job is simply financial engineering. That's why you see so many bankers and the like going into PE. I'll probably get crucified by some other PE VP that thinks he can code, but it's the honest truth. Being a good investor and making directional bets on management, macro factors, etc. is not the same as strategy and execution at the level needed to be a good exec. Period. They are different skill sets. I love being an investor. I would get bored and hate spending 6 years working with the same company every day.

All this, taken into account with what it sounds like you want to do and some of the geographic specific limitations others have mentioned, make me think it's not the right move for you.

 
Apr 15, 2020 - 5:07am

I work in the NZ finance scene so can hopefully provide a bit of insight. As the posters above have mentioned the IB / PE scene in NZ is incredibly small and it would be incredibly tough to break into directly. There are only a handful of PE roles that come up each year, with the majority of these being filled by people from the IBs or Big4 CF. I think you will also struggle to break into one of the big IBs here (Goldman, Jarden, Craigs, Macquarie, Forsyth Barr) directly from tech so your best bet would be via a Big4 CF team or one of the smaller IBs of which there are a couple.

30 definitely isn't too late to embark on a PE career here, the PE scene is full of people from a variety of backgrounds so I would let that stop you. I would caution you against having a PE or broke mindset as it would be a tough road without any guarantees that you would be able to make the transition, so consider if you would be happy ending up one of the other options you mentioned. Not trying to talk you out of it here, just trying to be frank with you!

Happy to answer any other questions you might have on here or via PM

Array
  • 2
 
Apr 15, 2020 - 6:24am

Hey mate thanks for the input, yep I imagine the best route would be a year or two in Big 4 CF. Yup I'm definitely cautious of thinking PE or broke, I know that the level of difficulty in attaining that role, especially with my non-traditional background and the scarcity of jobs in NZ is very unlikely. Hence I'm currently leaning away from it since, combined with the fact that I'm not entirely certain that I would actually enjoy the work in PE, it seems like alot of commitment for a bet that is pretty unlikely to pay off.

It would be great to get your input on the second question I've asked the people who've replied above:

How beneficial would a few years in finance right now be for me in accelerating my career to upper management in tech? It seems like alot of CEOs have a finance background, hence my inclination to think that finance is a useful skillset to have, but then again I'm not sure if a few years in finance in my mid-20s would constitute a real finance skillset relevant for management positions. I'm also thinking about the exit opportunities from IB into industry, I know that corp strat is a viable exit opp, but could I achieve this just as easily by spend those years I would spend in finance instead doing product management? Could staying in tech/strat consulting also potentially keep corp strat open for me just as well as IB would? It also seems like IB would cut me out of anything more technical than corp strat, making any technical/architect roles or even product management a challenge to come back to. So, would you say spending the next years in finance would be more of a help or a hindrance if I head towards tech management afterwards? Can you see any other benefits for finance in my position, such as potentially giving me exposure to other industries beyond tech, incase there's a chance that I might actually be more happy to pursue management in a different industry?

Start Discussion

Popular Content See all

Girlfriend vs PE
+103PEby Investment Analyst in Private Equity - Growth Equity">Investment Analyst in PE - Growth
First year analyst, still feel incompetent and like I haven’t learned anything
+34IBby 1st Year Analyst in Investment Banking - Mergers and Acquisitions">Analyst 1 in IB-M&A
Friends in IB are chilling hard, how can I get this?
+21IBby 3rd+ Year Associate in Private Equity - LBOs">Associate 3 in PE - LBOs
Q&A: Associate at MM Private Equity fund
+18PEby 1st Year Associate in Private Equity - LBOs">Associate 1 in PE - LBOs

Total Avg Compensation

January 2021 Private Equity

  • Principal (6) $693
  • Director/MD (15) $627
  • Vice President (58) $366
  • 3rd+ Year Associate (60) $272
  • 2nd Year Associate (116) $246
  • 1st Year Associate (250) $224
  • 3rd+ Year Analyst (23) $162
  • 2nd Year Analyst (57) $138
  • 1st Year Analyst (163) $119
  • Intern/Summer Associate (18) $71
  • Intern/Summer Analyst (178) $59

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk
98.5
2
Jamoldo's picture
Jamoldo
98.4
3
Secyh62's picture
Secyh62
98.3
4
CompBanker's picture
CompBanker
97.9
5
redever's picture
redever
97.7
6
frgna's picture
frgna
97.6
7
bolo up's picture
bolo up
97.5
8
NuckFuts's picture
NuckFuts
97.5
9
Edifice's picture
Edifice
97.5
10
Addinator's picture
Addinator
97.5