What do most Megafund associates exit to?
When I look at most megafund websites, it seems like there are 5 or more associates for every VP. This implies that the vast majority are not promoted.
So what do they exit to? Smaller PE shops? Is this move very difficult after not getting promoted at the original firm?
What now? Private equity Associate at a megafund
After a period of two years in as a private equity associate you generally “kicked out” to business school. The group that returns to the megafund is usually a one-third of who left. From there moving up the ranks becomes a brutal process, similar to VP and above levels in banking. There is a wide range of options at this point one's career. Here’s a short list of other possibilities.
great question. would also be interested in this answer
to business school. then either back to that megafund or another one.
others just lateral to different pe funds instead of going to bschool. someone decide to go corporate. some become entrepreneurs
The only step up from KKR is piper jaffray.
Thank you for the info Cornelius.
So do you think that if someone can get into a large PE firm, he should certainly take it over continuing in banking?
My main concern is that each of these PE firms have 5 senior associates for each VP, so it seems like it is extremely competitive to move up, and many must be kicked out.
Am I mistaken here? Can most people that get into a megafund as an associate remain in a megafund for a career if they decide that they would like to?
i think you should read the following blog post by equity private - Prologue VI - "The Bounce": http://equityprivate.typepad.com/ep/getting_in/
no one really every moves up at a megafund. they are kicked out to HBS. most people do it for the branding, network and million pay accumulated over the course of their two years there. if someone wanted to continue in banking, they could always go from kkr or carlyle back into ib. i don't understand why ur asking this.
the associates get worked 100+hours a week, get back $250K base + ~$200-300K bonus a year, and have limited involvement on deals, maybe 2 deals a year
There is definitely a weeding out process. Yes, they go to bschool, but generally only 1 in 3 are invited back. Others will try try to lateral to another big firm, go downstream to a smaller firm, or do something altogether different (HF, industry, start-up, etc.).
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I can't understand why everyone is so crazy about getting into a megafund after banking then.
Generally it doesn't seem too difficult to remain in banking and get promoted to associate after 3 years.
Alternatively you could go to PE, a megafund if you are lucky, and in all likelihood have to go to HBS for 2 years then go back to banking as an associate (or a MM PE firm which pays no more than banking). So after 2-3 years banking + 2 years PE + 2 years HBS --> you are an associate. In this amount of time you would be a VP had you remained in banking.
Even if you are incredibly lucky and are asked to return to a megafund post HBS, comp doesn't seem to be substantially higher than banking until you are very senior (VPs in banking make 500-1mm).
Is my logic off?
CashCow that is where you are generally wrong. It is very hard to get directly promoted to associate in banking. Third year offers are more common (depending on the bank) but a direct promote is not.
At my group (bb) they say that almost anyone that wants to stay can get promoted, but everyone wants to go to PE
Even if that's true, I doubt that most associates make it to VP, and from VP to MD. There's a brutal selection process at every stage of advancement, both in banking and PE. Don't assume that you can coast your way to the top in banking.
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