Upside for sticking it out at Apollo...

From what I've been hearing, Apollo is a nightmare for associates. If half a million bucks isn't enough to keep an associate, that definitely says something. But enough negative commentary on Apollo. Let's say you land a seat as an associate at Apollo, and stick it out. Then you get to principal, and painstakingly ride your way to partner, say 10 years after joining as an associate. You crush it for another few years, and rise to that senior partner level; you've officially surpassed the top 1% of your Wharton/Harvard classmates. How much will you net through this track? Not sure if this is true at all, but I hear some of these guys are pulling in over 8 figures and have over $100mm in carry in some cases. What does the lifestyle and carry dollars @ work/comp look like at that partner and senior partner level? Whatever that number or lifestyle may be, do you think it justifies selling your soul for those initial 10 years as an associate/principal? Would that Apollo associate have been better off going to some tiger cub? Interested to see what the pro-Apollo folks have to say...

 

To assume that you can progress through the ranks by sticking it out is pretty bold. The competitiveness at that level is insane, but that is the bargain the current partners of Apollo were willing to make with their lives. 10 years of a ~60 year adult life is pretty significant, so I imagine most wouldn't say its worth it, but hey, the wealthy are wealthy for a reason so clearly some do think its worth it. 

 

dollarbillstearnofficial

How much do you think an experienced partner could make?

The industry is rapidly maturing, returns are being compressed, Apollo is now a public company. It’s fair to assume that none of the outcomes you hear about are repeatable.

What existing partners make currently (spoiler alert: no one here has real knowledge outside of speculative rumors/conjecture) is irrelevant for what a current banking analyst can make in that same seat 15 years in the future. The only thing I can tell you with certainty is that it will be meaningfully less than current partners make and less than what people lead you to believe.

The marketing pitch MFs give is that if you spend your career here (through partner) you can make $50-100mm, so call it $75mm. That’s a marketing number, so assume it’s south of that. And then apply an annual industry maturation discount raised to the 15th power (15 years out).

$75mm across 25 years is 3m per year, it’s less in earlier years than in later years. If first trimester is $1m on avg, that makes last trimester $5m on avg, and middle $3m. Which is in the ballpark IMO.

At Apollo maybe it’s $75-150mm because of the comp culture/lean organization. But prob also higher fail rate.

 
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Whether something like this is worth it is really up to you (well if you get the opportunity). The problem that the finance industry is seeing now (and over the last few years) is that it is no longer the “only game in town”.   Back in the day, if you wanted to make a lot of money you had to go down this path, and so getting crushed in IB or getting VERY crushed at Apollo was the trade, and in general people were ok with it for the $$$ (both lifestyles sucked at the junior level). Now you have tech coming in, HFs becoming more open to junior employees, and COVID sped up the work flexibility (which banks seem less open to) and all of a sudden the trade is harder to make. $500k at apollo? My friend made $300k at FAANG (if you include signing bonus) 1.5 yrs out of college, working 40 hrs a week from his apartment. I’m not trying to make this into a tech vs finance discussion (for the 100th time), but many people coming from top schools have friends across high paying industries. So it isn’t just a discussion about your interests, but all of a sudden if your friends have these great lives (traveling, flexible hours, AND money) you become a lot less happy with your $400-500k paycheck. 

So to me personally? No not worth it, I enjoy being able to travel, spend time with family and friends, etc. But I’m also older and took a different path that has led to financial stability, so easy for me to say on a backward looking basis. 

 

FWIW, pre-covid, big tech also had horror stories about work life balance. Why do you think Google has nap rooms, 24/7 food, gym, etc.? They never want you to leave. If you want to make it big in FAANG, you are also working a ton. Big difference is that chill people who want to coast for $150-200k have that option. I'd say the "grass is greener in tech" is a bit overblown. It's nothing like IB or Apollo but its not 35-40 hours per week across the board. Also, I know tons of smart people in tech who are regularly laid off, even from "great" companies. Not that finance has super high job security but its way worse in tech. 

More importantly though, people who like tech usually think finance is boring and vice versa. Fundamentally different people in 90% of cases. I don't think its as easy as saying that people who would have chosen finance can just as easily choose software engineering and (a) like it and (b) actually be good enough at it to make a similar living. 

 

Not saying people would pick one or the other. What I’m saying is that smart people are looking around at their friends who all graduated from the same place and getting FOMO, and let’s be honest many people who go into this industry don’t do it because it is fascinating for them to be analysts. I’m not trying to debate tech vs finance, that happens at least once a month on this forum. But before people could at least look at the money and justify it: “yeah life sucks, but I make X, at least I’m not John working in marketing who can’t afford his own apartment”. Now it’s “wtf John at FAANG made 2X what I did and spent 3 weeks in argentina working remotely and then took vacation? *^%>#^!!!” 

There has been wage inflation in many technical jobs over the last 5-10yrs. And that has also spread to jobs in management (including product management) at these firms. That mixed with additional regulation in finance has led to many of the “side benefits” going away. Then add in that an analyst job is 2-3 yrs, then you continue to grind to get into PE and still don’t have great job security, don’t just compare to tech but look around and many other paths start looking attractive. There aren’t hundreds of paths to millions, but definitely more than before.

I work in finance, and love it. Have been in it for ~15yrs, and wouldn’t go do tech or something similar. That being said, I can’t imagine graduating from college and looking at the options and being thrilled to get paid less to work many more hours just to try and make it work in PE in 2 yrs. The path just isn’t as rewarding as it once was. 

 

Yeah but the tradeoff is: 

- Minimal sex life. I know most people gunning for MF PE didn't have a sex life to begin with, but now you really won't. 

- Very slim chance of having a long-term fulfilling relationship with someone due to the hours. 

- Because you won't have a long-term relationship, it is unlikely you have kids. If you do, they may resent you for never spending time with them. 

- Very high failure rate when it comes to reaching partner ranks. Everyone assumes they are going to be top bucket, until they aren't. Even more competitive at APO than in banking..

- Health issues. You probably are accelerating your aging process considerably 

- Almost zero time to enjoy hobbies. 

- Can almost never see any friends. Most people gunning for MF PE didn't have a thriving social life to begin with but still. 

 

If you really feel this way you should hit up some of these people and ask these questions. The other responder explained the trade-offs well. This site is about giving information and explaining your options today and down the line but truly once you get going on that "journey" you are going to see lots of people end up where they do for a reason. Yes I know there is lots of AMAs etc on here about XYZ dude who went banking to vc to tech to PE, or went banking to vc to traveler to tech. Those people do exist and are typically more interesting which is why they get highlighted but reality is a lot of people just continue on their journey.

When you get older and look around...you see that superstar trader/pe partner/tech startup/vc person could actually not just switch roles and do XYZ. To think a partner at MF has no ability to raise/want kids is just wild...to think they are super unhealthy and all on their death bed is beyond wild. Maybe they do things in life different than how you see fit does not mean its not possible. Some of these dudes literally base their whole life on their family legacy and how much political influence they can use.

Today you are seen as cheap labour to help them achieve their goals, as you move along and get closer to being their cohorts the expectations on that person and their future vastly changes.

But as the other poster said, that MF PE guy prolly has a friend at FAANG who maybe they do not want to switch roles. Is going to tell the next cohort behind them "hey dude if you dont want to XYZ, you dont have to cause my friend crushed at google all the same..."

 

The question to me is can you make the same money and do PE but not real with the awful culture and potentially face burn out

I love Apollo’s strategy and I appreciate their success, but to face burn out early in your career for the initial paycheck could actually destroy value because if you could’ve went to a MF with a better culture and stayed in finance you could actually make a lot more than if you burn out at APO after your two years

Don’t get flashed by the $400k

 

100% agree. Reminds me of the tortoise versus the hare. It doesn't matter if XYZ is making $500k at 26 if they burnout completely by 29. Overwhelming majority of prospects on this site completely underestimate burnout.

 

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