Would love to hear from people who left PE to move into industry (product, marketing, strategy, you name it). Worked long and hard to make my way to PE and feel pretty underwhelmed - I’m just not a deal guy at the end of the day. I feel more dread than excitement at the idea of a new platform opportunity, so I think after my 2 years are up I should get off the treadmill and find something more sustainable and tangible. For those of you that went to industry - what are you doing? How do you like it? How hard was it to make the move?
Trending Content
Career Resources
Bump!
This exact path is becoming more common, but also more competitive. I made the jump several years ago. It seemed like I got in right before others started really looking at making the switch. I was working at an industry focused PE shop and went to a company within the same industry to join the strategy finance team. That made it much easier given the role was very analytical. Now I work on full year forecasting, pricing, and help evaluate strategic decisions for the management team.
It seems to be the millennial thing to do. I'm seeing more candidates leaving IB/PE to pursue industry. The biggest hurdle is always going to be taking a massive pay cut in order to get more responsibility and impactful work. Also within corporate it's sometimes really difficult to get promoted. There's no set amount of time you spend at any given level like in finance. You can stay an analyst or manager for a very long time.
Do you enoy it more that your life in PE?
Seems to me that the best way to make decent coin doing this is to move in a sufficiently senior or impactful role that you get a piece of the management incentive plan. Not sure whether this is the norm but our fund sets manangement's incetive schemes so that if we hit our target returns, the senior team at the portfolio companies can make 10x - 50x their original investment.
re: enjoyment. It was certainly a transition. There is a certain level of excitement from working on investments and I personally enjoyed having something different to do every week. Moving into corporate you have monthly responsibilities. There is a cadence to each month that you have to deal with. I also found myself working more hours as time has passed. This is a result of my work output being high and being a trustworthy member of the team. Luckily I work for a fast paced company that isn't afraid to reward those who outperform (via promotion and pay). I know others aren't so lucky. All in all pay is less but I have more control over my life. I don't regret the decision at all. Also I realized I honestly would never make it within PE. I'm from a nontarget undergrad and didn't want to go to bschool. I'm better off kicking butt within corporate.
You bring up a good point on returns & incentive. The person who started the thread is a 1st year associate. This person will likely enter a company at an associate equivalent. It will take about 1-2 years as an associate, 2-4 years as manager, and another 2-4 years as senior manager. Meaningful equity begins once you hit a Director role IMO. If you can enter as a Director, lead a team, and report directly to the CFO then the equity can be attractive. Any role below that is subject to many different factors. That said, experience in buy-side will prove very beneficial later down the line if one pursues a CFO or leadership role within a VC/PE owned company. You know what investors look for and can get the financials ready with that eye.
From the CFO packages I've seen in my time in lower MM PE, CFOs can demand a higher cash comp given their expertise. One can expect to make anywhere from $200-300k base / 50-100% bonus. The exit packages I've seen are usually in the $2-4M range for a 3x MOIC.
Bump
Are there opportunities to do a secondment in one of the portfolio companies?
Temporary or permanent? When I left PE the CFOs of some of the portcos I worked with were upset I never reached out. I'm sure it was an option but unfortunately the portcos were in other cities.
You obviously left a great impression while you worked with these guys in your PE role. I've had a similar situation, given I left PE two months ago, and it only reflects well on you / improves your network going forward. Kudos to you and cheers
Definitely but maybe not so much a secondment rather a permanent transition of roles, especially with portcos you've already worked with
Temporary but leading to permanent. Some advantages of moving to a portfolio company temporarily to begin with are: familiarity with the business and future prospects, the owners and mgmt know and trust you so could get a more senior role, offers a path back into the investment role if you change your mind.
The downside could be how the PE firm manages the portfolio company, if it the role is temporary then it would be hard to argue for mgmt equity until the role becomes permanent.
Like many finance answers, "it depends." It really will depend on the type of firm you're at, size of the investment team, size of portfolio company and what role you need to fill. Sometimes I've seen at much smaller firms / earlier stage companies they need someone to step into an interim CFO role. I would say this is very rare. Most often the investment team needs you to do your role. Firms run pretty efficiently and don't have much capacity to lose a deal team member 100%.
That said, I wish there were more opportunities like you mentioned. I had to make the decision that the minute I leave PE for an internal role, the road back would be near impossible. The routes that are available now to me (without MBA) are to make my way up at a large industry recognized company, or step into a senior role at a Series - Growth funded company and help with a successful exit.
Quo exercitationem recusandae id quasi explicabo. Doloribus molestias rerum sunt consectetur est assumenda non. Sint quia sunt voluptatum est.
Est qui qui error voluptatem. Occaecati debitis porro perferendis ut soluta aliquam nam. Quis pariatur facilis iste quas. Perferendis amet est illo commodi. Magnam et explicabo inventore quo laboriosam mollitia.
Dolores quas eveniet eligendi quis facilis aliquid et. Mollitia quas incidunt et quae. Quae dicta qui sed perspiciatis ea nihil nihil. Corporis eius est nobis et excepturi illum assumenda in.
Eligendi nihil ea ut aspernatur aut nostrum est animi. Fugit ea blanditiis commodi in.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...