I've noticed that many firms like MS, JPM, & GS have their own PE/HF/etc. depts. What do you guys think about these roles compared to other FO roles? It seems as though some (eg. GS PIA) usually hire internally from their IBD class, is this normally the case?
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Not sure why you got moneky sh1t thrown at you for that. But either way, good question. I've not seen too much on this board by in way of shedding light at these departments. I have a bit of colour on Goldman Principal Investing - rather than a direct PE buyout hose they operate as a fund of funds and a co-investment partner. They structure clients' portfolio to different risk strategies across various alternative assets for eg - 40% to vanilla mid market buyout managers, 35% to long lock metals and mining managers across the mining curve and 25% to to growth equity managers. Very crude example but hope you get the idea. In this aspect they're like a FoF aka Access and Adveq etc. They also do co-investment deal where they partner with a PE manager on one deal specifically and co-invest alongside them, This enables them to save on the 2% management fee. Other such groups like GS PI would be Rothschild 5 Arrows. Not sure on the HF side of things, some else would be better placed to answer.
In terms of hiring - I would imagine it's across the spectrum and doesn't necessarily have to be from the IBD crew. Why don't you linkedin quickly? Should be fairly easy to get a feel..
thanks for this and to answer your question I know a few people from GS pia and have heard APAE also say that they look for people already in GS.
APAE? Not sure what that is. It could be logical for them to look internally first but I know a guy at 5 Arrows at the Analyst level who came from else where.
For GS - The Principal Investing/Principal Investments Group is in Investing & Lending, MBD or SecDiv - all have similar mandates (slightly different names for each business unit) with varying proportions of GS balance sheets/prop investing vs client assets, and different (but consistent) strategic top priorities - and each has a sub-teams with separate strategies.
// Side Note - GS SecDiv has a somewhat secretive Principal Strategic Investments team that sits on the trading floor in NY, London, Singapore and HK which essentially serves as an in-house VC firm that invests in FinTech, AI/M, Data Analytics, Data Visualization and Market Structure startups so that GS traders stay on the bleeding edge in terms trading tech and stay ahead on the market structure and micro-structure evolution curves. The group does minority investments ~5-30% depending on how compelling the offering is, but they don't do acquisitions. //
Within GSAM, AIMS (Alternative Investments Manager Selection) - takes equity stakes in PE firms (the GP) and HF management and in return they get preferential fees and access to these managers for their own FoFs. AIMS PE are specialists in secondaries and direct investing because GS has an edge with its breadth and depth of industry contacts; the GPs are comfortable with GS's [sophistication+speed of deployment of capital]; and other LPs won't mind much if an anchor LP investor wants to exit early and it's GS who's buying them out. The PE firms and HFs get the credibility of a marquee backer i.e "Goldman invested in us" as due diligence approval which helps them gather assets from others from the improved marketing and PR.
Hiring is not structured and there aren't any summer interns or new analysts - I have noticed the tendency for AIMS to hire former HF and PE people from outside, and other GS people from other GSAM teams particularly those who were investment analysts and/or portfolio managers. The AIMS group has to select high-potential managers and the team needs people who can make qualitative and quantitative judgments so it helps if they deeply understand the increasingly arcane and varying strategies that PE and HF guys come up with. Hiring people with 4-5 years of external experience has the added advantage of "acquiring" their network and market knowledge. There aren't too many IBD guys - though there are former MBD guys in the non-HF teams. They don't ever post the jobs on their website - the new recruits come from HFs they've invested in, referrals, or internally.
Exit Opps - (1) Manager Selection at endowments / SWFs (2) BizDev/Investor relations for the PE / HFs
http://www.goldmansachs.com/careers/why-goldman-sachs/our-divisions/inv… http://www.wsj.com/articles/goldman-plans-1-5-billion-fund-to-take-mino… http://www.bloomberg.com/news/articles/2016-06-06/amg-to-buy-stakes-in-…
I know a bit about the internal buyside groups at GS. Their internal equity hedge fund is Goldman Sachs Investment Partners (GSIP). Although not as great as it used to be due to a lot of regulations on internal funds at banks, GSIP is still a super elite group and extremely hard to get into. I believe they usually hire internally from superstars within GS, but it is possible to get in from outside. You can find some linkedin profiles of people who have worked there, both full time and as summer analysts - most are 4.0's from Wharton, a few from Harvard, LSE, etc. Pretty sure one girl was a Rhodes Scholar.
GS also has an internal credit hedge fund called Liberty Harbor. Similar situation to GSIP, it's a very elite and prestigious group that's very hard to get into. Hope this is helpful.
From what I know - Liberty Harbor is more of a a shares private placement group. Could be wrong...
to be clear, are you talking about MSIM, GSAM, and JPMorgan Asset Management?
Definitely ok to talk about AM but these banks have PE and HF groups. https://am.jpmorgan.com/us/institutional/investment-strategies/alternat… https://am.jpmorgan.com/us/institutional/investment-strategies/alternat…
my firm has similar groups, all look like IB alums. I'd imagine the recruiting is similar to other PE shops.
some of our PE offerings get decent returns, but I'd rather not offer my clients house products, we get plenty of options from megafunds and other top PE firms that I don't feel as though I'm missing out.
Have some information about RS/LZ. Their PE activities are sorted out which means no special internal Recruiting.
1) Rothschild is divided into seperate firms in seperate countries. So you have:
Rothschild & Co which is located in France. - The PE Division ist called "Merchant Bank'" - better known as "Five Arrows Principal Investments " - located in Paris. - They invest in funds, mezzanine financing, listed and unlisted companies. - They manage the families money and some of Investors. - Team Size is around 20. - Recruting from Tier1 BB/EB in Eruope.
And there is RIT Capital Partners (England) which is more an AM, so not relevant here.
2) Lazard PE is called Edgewater Funds - They are around 30 ppl - based in Chicago - Everyone has an MBA business schools ">M7 MBA - almost everyone has BB/EB Background.
That's pretty cool I didn't know edgewater was Lazard
Which headhunter does edgewater use?
These days it's hard for banks to do proper buyside because of all the regulation. I don't know anyone in these groups today, but people in them back in the day were top quality (e.g. GS PIA doing Series A on Alibaba). Assume today there are still top people doing great work, but at a different level / scale.
Bump. Would appreciate updated opinions on these internal buy-side roles and exit opps from them.
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