Thoughts on Junior's Experience at a SWF?
Long story short, I'm currently at a MM fund and I'm slowly burning out. I find a lot of the work I do really interesting and I have had a good experience at my fund thus far, but I don't get to enjoy much outside of work. I would say that WFH during Covid has been net positive for me, but it's still a slog - I'm tired.
I'm trying to think of ways that I can continue to work in a deal environment, but in a slightly less demanding way and started giving some thought to SWFs. Anyone have thoughts on the experience an associate would get at a SWF versus a more 'traditional' buyout fund? I'm thinking the GIC, Wafra and ADIA's of the world (though I don't think I'd move to Abu Dhabi and have heard that making this move in your mid-20's can be frowned upon). From reading some comments on WSO it seems like these places tend to, on average, have better work life balance at the tradeoff of comp, which I'm totally fine with. Does better work life balance also mean that one's experience will be compromised from a professional development standpoint and be perceived as 'throwing in the towel'?
There are threads on here but they seem to be a bit dated so was hoping to get some fresh thoughts. Any insight would be super appreciated!
Agree with your assessment of WLB vs comp trade off. The nature of the work can be quite different if you end up working more on co-investing or co-underwriting rather than direct PE deals. I think Mubadala have a proper direct team that even raises outside capital. I think Temasek does some direct as well.
Throwing in the towel is definitely those on the GP side will think. However, the SWF/Pension/Endowment can offer rewarding careers as long as you are comfortable with what those roles are.
I think I can help on this one. I spent 2yrs in MF PE, got super burned out and tired of that life (+didn't want to get an MBA). Went to one of the SWFs you mentioned in the direct PE team.
Here was my thought process: In order to get the WLB I wanted I was willing to take a hit on pay but I didn't want to budge much on scale - i.e. I still wanted to keep investing in headline-grabbing marquee deals instead of rolling up random 100-200mm EV widget companies. Didn't want to move down-market in terms of AUM, institutional resources, bankers, advisors, global network etc.
How it worked out: In general I got what I wanted - people are still decently smart but it's sleepier and there's immense respect for WLB. I took an entire month off work at the end of the year without disturbances. Job security is good. But there were a few surprises: I did not anticipate how much more political my SWF was compared to my old PE fund. In short: the CEOs of these places are political appointments vs. commercial hires and that culture trickles down a bit especially at the senior level. Investment committee is less shrewd and return hurdles are on average 250-500bps lower, but most of the job is substantively the same. Talent is a mixed bag: everyone's profile is generally blue chip (Mostly ex-BB, lots of MM PE, a couple MF PE and ER people), but there will always be that random ex-industry, central bank or finance ministry guy who makes you suspect nepotism. I see myself enjoying life but leaving before director-level promotion due to these reasons. All-in pay is around c.25% lower than my old shop but I work maybe 50% less hours. I love that my team is just "allocated" a couple B to deploy every year no questions asked, there's no random investor relations requests, no question on "will we have money to spend next year", no pressure to sell stuff within 5-7yrs, and since we have flexible capital we also never hear stuff like "interesting deal, but doesn't fit within our fund's mandate, why don't you pawn it off to the XYZ team on the 30th floor", which was all too common in my MF.
How I was perceived: The best comparison is this. The way people reacted to me going sovereign is basically the same as a blue blooded HF guy moving to a long-only like Fidelity/Wellington. Is there some snobbery? Yes. Should you give a shit? No. There still is some carry-over perception from the days SWFs only did co-investments, but I think in general the brand equity is in-line with UMM PE and only getting better (+ I work half the hours).
If you care about the perception question this thread should give you an idea of what to expect: https://www.wallstreetoasis.com/forums/do-hedge-funds-look-down-at-asse…
Advice: you're right in that you should try not to relocate to the Middle East, for various reasons both career and non-career which deserves another post. I have heard better things about Singapore. Satellite office in US/Europe is a great place to be if you can be sure you will be doing direct investments. Without generalizing too much, vibe at these places is more comparable to a sleepy megafund than MM PE. If you're a non-national of the SWF I think it's a great place to spend 3-4 years and enjoy the rest of your 20s/early 30s subject to heavy diligence of your team and strategy. Not all SWFs are created equal. Some of the good ones in my experience are Mubadala, CPP, GIC, Temasek (non-exhaustive list just top of mind)
What are you planning to do after?
Personally I want to go into a senior position in one of my PortCos (common enough) or go to a strategy/corpdev type role in FAANG (less common). if I stay investing I would head to VC.
Exits from my team have been mostly in line with what you'd expect from UMM PE.
What are your thoughts on ADIA's PE team (focus on North America)?
Maybe a silly question, but is there a chance of getting carry at SWFs?
In attempt to get carry/profit-sharing, a lot of these places give you shadow carry or share-like compensation vesting over 3yrs which is tied to portfolio performance. But the magnitude of carry is pretty different than PE. Which is why as you rise up the pay differential gets wider. At the associate level it might only be 20-25%, but at the director level it probably will be something like 40%.
Curious about how “easy” these seats are to get at a Sr. Assoc / VP level relative to MM/UMM shops?
For a given shop, would assume that a regular GP would be more competitive, but the sheer number of funds out there means that if you’re not a total dipshit you should be able to land something if you want it. Curious on your thoughts, since the sheer # of reputable SWFs seems way lower
I think this is a good point. While jobs at SWF/Endowment/Pension funds are less “glamorous” than PE jobs the number of seats are few and churn is also low (esp at the more senior levels).
Do you know much about the exit opportunities from SWFs like ADIA/Mubadala? Is it a good pivot to do 1-2 years at a SWF and move into IB post Masters?
"You're right in that you should try not to relocate to the Middle East, for various reasons both career and non-career which deserves another post"
Can you please elaborate and explain why?
In your SWF, how do you view senior promotion? Is it "easy" for talented, driven person to relocate to Middle east and clip 1-5mm til they retire?
FWIW, had a friend at GIC and he said hours/WLB were worse than banking. Might be a one-off, but make sure to diligence this if WLB is your primary motivation for moving. Not every firm and team will have good WLB, especially if seniors come from sweatshops.
Depending on how burnt out you are and how far the scale tips towards WLB over comp, corp dev could be an option that would keep you around deals with better hours.
Just out of curiosity, do you know what group within their team your friend worked in? From a quick LinkedIn search it looks like they have a few groups on the private investment side.
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