Tiny PE firm or established PE fund of funds?
Quick synopsis: I don't like my current job so I'm interviewing at a small PE firm and a large PE fund of funds. Is it better to work at a small PE firm or a well-respected PE fund of funds?
Company A is a small (20-person) PE firm that specializes in real estate debt. It is hard to find a lot of information on the firm online, but the founders/employees have impressive backgrounds. The analyst responsibilities include a lot of data mining and building quantitative tools to analyze investments, manage the investments, track performance, etc. I think this could be a great opportunity or extremely boring (depending on what "data mining" entails) with very little room in between. Additionally, I don't want to work with debt/securitization for the rest of my career.
Company B is a large firm that is pretty well-known in the PE industry. The analysts work on primary and secondary fund of funds. I would get exposure to GPs and learn a lot about the PE industry as a whole. Additionally, I would work on valuing PE funds and modeling portfolio companies, which seems really interesting.
Basically, which opportunity would provide better career prospects?
20 IP's isn't exactly what I would call tiny. What is the size of the fund they're currently investing out of? What was the vintage year and do they plan on raising new capital. How have their current investments been tracking? Was this fundraise larger than the prior raise?
While I think more info is required (backgrounds of partners, performance of the fund, etc.). However, one initial observation. Neither are going to tee you up for traditional corporate private equity: neither fund of funds nor real estate are seen as particularly technical roles, so traditional PE firms will be skeptical. Of the two, I would say it is less tricky to move out of REPE if traditional private equity is your thing.
Ultimately, if you want to make the move to traditional private equity, jumping ship now is probably not the best move. I don't know to what degree you dislike your current job, but you might want to be patient. Your current role in IBD is more attractive than either of these for buyout associate roles, so employers will be skeptical why you left early if that is your end goal. To be candid, they might think you hated banking hours and tried to shortcut the system, which is never a good thing.
Also, diligence these ROLES as well as the firms. Analyst roles vary a lot by fund. An analyst at TA Associates / Summit, for example, really isn't much more than a glorified cold caller. Make sure that you are going to be a participating member of deal teams, and not just the junior person that senior IPs can shelf off the boring work to. Be direct with your queries. They can't flat out lie to you, so don't leave any room for ambiguity. From your description of the REPE role in full transparency sounds exactly like that. Be careful about this. If nobody can vouch that you were a part of the deal team, you might find yourself going back to banking and hitting the reset button.
I hope this was helpful. Feel free to PM if you want more details, as I found myself in a somewhat similar situation, which has turned out to be the best decision of my career, but was risky and threw me into a panic mode initially.
Agree with the above. Real Estate Debt PE won't set you up for normal PE it'll set up you for...Real Estate Debt PE. Maybe REPE if you're lucky, but its seems pretty niche. I doubt it will be a super boring job, but it probably will become somewhat repetitive.
FoF in known to be somewhat of a pigeonhole even at a big shop. With that being said, there's nothing wrong with FoF and I actually think it can be a pretty great lifestyle position. There's little risk, you don't actually have to do much besides evaluate managers, and its not hard to make a decent return. FoF doesn't build a direct investing skillset though and you'll be somewhat of a 2nd class citizen to the direct investing world. Again, nothing wrong with it, but unless you're ready to make a career of FoF, it won't allow you to move quite as easily.
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