What's it like working in CorpDev for a Sponsor-backed PortCo?

There isn't much information on WSO around this, but curious to see what people's experience is like working for a major PE or VC backed Portfolio Company in CorpDev, StratFin, or CorpStrat.

Some questions include

  1. What does your hours typically look like on a regular week and when executing deals?
  2. What is your company's mandate? Is it mainly add-ons or product expansions? Is there a defined target like, say 5 acquisitions a year?
  3. What's the career path look like? How easy is it to switch?
  4. What's your rough comp?
  5. Does sponsor reputation correlate with your experience? For example, Apollo is notorious for grinding hard, does that hold true for their portfolio companies?

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Comments (24)

  • Analyst 2 in IB - Cov
Oct 13, 2021 - 8:09pm

Also interested but think this is very broad. Will be completely dependent on the size of the sponsor and their strategy. For example a LMM sponsor that makes platform investments with the strategy of continuous roll ups is going to be very active whereas your run of the mill portco for a MM shop might only look for op improvements with small tuck-ins on the side.

Regardless I find these roles very interesting and assume there's a lot of responsibility/hands on work experience at the junior level.

  • Analyst 2 in CorpDev
Oct 13, 2021 - 8:12pm

Work at a niche industry mm/lmm-backed company:

1. Hours have been ramping to reach/crush EBITDA targets. It can be <40 but is more along the lines of 60 plus travel on deal close weeks.  

2. Add-on acquisitions. No defined acquisitions # target (there are some EBITDA targets though, but that is above my pay grade) and boss says no matter what we do sponsor will ask for more.

3. Career path is fast to manager level but stagnates very quickly. People then leave for another sponsor-backed company or exit into more traditional roles for a significant comp increase from what I understand. Granted if you go to a tech portco for a large PE firm (I see a couple of ERP companies looking for people on LinkedIn) I'm sure you could move up the ladder or to a more traditional Strat/Ops role afterward too.   

4. ~100 tc low/med col city. 

5. Yes and no. Sponsor will always put pressure on growth, but portco culture could be better/worse based on the senior management that is in charge of the corp dev team.  

Most Helpful
Oct 14, 2021 - 10:43am

Analyst 1 in IB - Gen

There isn't much information on WSO around this, but curious to see what people's experience is like working for a major PE or VC backed Portfolio Company in CorpDev, StratFin, or CorpStrat.

Some questions include

  1. What does your hours typically look like on a regular week and when executing deals?
  2. What is your company's mandate? Is it mainly add-ons or product expansions? Is there a defined target like, say 5 acquisitions a year?
  3. What's the career path look like? How easy is it to switch?
  4. What's your rough comp?
  5. Does sponsor reputation correlate with your experience? For example, Apollo is notorious for grinding hard, does that hold true for their portfolio companies?

I'm Chief Development Officer for a PE-backed portco.

1. The answer to this one depends on how you define work. I feel like I'm more in the 30-40 hour/week range to be honest, but that doesn't count a few dinners/meetings with leads per week. Those don't really feel like work when I think back to my IB days but I guess you should count them. Point is, my days of late night turns on decks are over. The beauty of CD for me is that ability to drive the deal process as I see fit. I set timelines/meeting schedules etc. to fit what works for me instead of what works for the client like in IB. Our sponsor let's me and my team do our thing and focuses on hitting our annual targets, not the day to day.

2. This is a classic healthcare services roll-up play. Basically buying up a bunch of physician practices within a specific specialty. 

3. I'm where I want to be at this point. I rose up from manager level to this point over the course of a few years. I might be open to a CEO role later in my career but we will see. That seat has to put up with a lot more BS than I do.

4. Roughly $1.3-1.5M annually. About 30-35% cash, rest in equity.

5. I've worked for MFs down to LMM portcos. As you can imagine, the MFs can be more demanding. I've carved out a nice niche in the MM/LMM space and I expect to stay in that space. Over time I've realized I enjoy the process of joining a small ball of clay and helping grow it rapidly while implementing systems and processes to prepare it to scale. 

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Oct 14, 2021 - 11:12am

Wow, this is great data and very helpful! Congrats on what sounds like a great career + current gig.

I'd be curious how you feel about working for a roll-up play and what gets you out of bed in the morning (besides the fat check!). My favorite thing about my investing role is being able to learn about new industries, their dynamics, competitors, etc. There are definitely corp dev roles that retain that (i.e. you're exploring a variety of options to expand the product suite), but a pure roll-up feels a little more like acquiring variations of the same asset again and again. 

Would also be curious how you'd advise someone trying to jump to a Director/VP-level Corp Dev role how to evaluate different opportunities and what makes one platform truly compelling versus others. 

Oct 15, 2021 - 1:17pm

PE-biz-dev

Wow, this is great data and very helpful! Congrats on what sounds like a great career + current gig.

I'd be curious how you feel about working for a roll-up play and what gets you out of bed in the morning (besides the fat check!). My favorite thing about my investing role is being able to learn about new industries, their dynamics, competitors, etc. There are definitely corp dev roles that retain that (i.e. you're exploring a variety of options to expand the product suite), but a pure roll-up feels a little more like acquiring variations of the same asset again and again. 

Would also be curious how you'd advise someone trying to jump to a Director/VP-level Corp Dev role how to evaluate different opportunities and what makes one platform truly compelling versus others. 

I think you bring up some fair points. Earlier in my career I preferred more variety too and I think there's value in that approach because you're still trying to figure out what you want to do. But it seems like most people end up specializing as they move forward in their careers, and that specialization often enhances their value. 

I'd describe my current role as almost an investment/sales hybrid role. I'm acquiring the same types of assets, but doing deeper sector/company-specific diligence on opportunities and developing post-close action plans to turn a double into a homerun. The sales side of it is not something I envisioned I'd enjoy 10-15 years ago, but over time I realized I enjoyed hunting and signing new deals. There's definitely a thrill of the chase element that I didn't realize I'd enjoy so much until I started doing it. I also enjoy how my comp is directly tied to my success and how I have the autonomy to operate as I see fit. 

Regarding new opportunities, I would first spend some time on career mapping. Where do you want to be 10-15 years from now? What role/sector/size of company/growth strategy/ownership situation, etc. Once you have that figured out, look for opportunities that take you a step closer and will help you tell your story in interviews. If I were hiring a Director or VP for my company, I would prioritize applicants that have worked in Corp Dev for another PE-backed healthcare roll-up because I would have confidence that they understand our mission and process, and were just ready for a promotion. I'd be much more leery about hiring someone from a publicly-traded oil and gas company (for example), even if they had more impressive names on their resume. 
 

  • Analyst 1 in IB - Gen
Oct 14, 2021 - 9:39pm

Thanks for commenting, super helpful information! In general, how common is your compensation in HC services rollup and how has it scaled over time? I interviewed at a couple places that are these high volume/lower transaction size companies and they seem to be increasingly popular. Is there still substantial room to go?

Oct 15, 2021 - 1:23pm

Thanks for commenting, super helpful information! In general, how common is your compensation in HC services rollup and how has it scaled over time? I interviewed at a couple places that are these high volume/lower transaction size companies and they seem to be increasingly popular. Is there still substantial room to go?

I think my comp is fairly common for this specific role (CD head at MM PE-backed company). In my experience, cash comp tends to be around $350-500k with equity obviously based on sponsor size, company size, management team, etc. My comp started at the levels that others have mentioned in this thread and went up gradually with each move. I do think the roll-up opportunities tend to pay up because they understand M&A is the primary growth driver and they value people who have a proven track record. In their eyes it's worth paying more for someone good than going cheap and losing a year or two because you hires the wrong guy. 

  • Associate 1 in IB - Cov
Oct 14, 2021 - 10:57pm

How old are you and what level did you leave banking? What has your pay progression been like in Corp dev?

Oct 15, 2021 - 1:27pm

How old are you and what level did you leave banking? What has your pay progression been like in Corp dev?

I'll be a little vague and say I'm mid to upper thirties. Left IB as an Associate. Comp progression has been steady with each promotion. My CD comp started in the range of others in this thread. 

Oct 17, 2021 - 3:47pm

Out of curiosity, what of % of time in your experiences has the equity ended up being worthless and for the the ones that are + what type of multiple have you realized? i've seen my current boss who's focused on VC-backed late stage startups churn through a few places in the last 5 years and not really end up with much. i guess the time horizon is shorter in startup - you kind of know within 1-2 years whether to bounce, whereas in PE you're probably committed at least 3-5 years unless something extreme hits.

Oct 20, 2021 - 6:27pm

Good question. I've hit full vesting in all of my PE-backed opportunities thus far (ranged between 3x MOIC on low end and 6x on high end). Not sure if I'm lucky or that's the norm.

You mentioned VC in your post which from my understanding tends to be more binary in nature. My experience is in PE-backed healthcare roll-ups which seem to have solid returns on average, but admittedly have less upside compared to potentially disruptive VC-backed opps that either hit big or fall flat.

Oct 14, 2021 - 4:35pm

At a middle market PE backed tech company. 

1. Pretty standard hours 30-40 when we don't have a live deal. Probably top out around 60 hours if we have multiple deals going on.

2. We have the freedom to chase both add-ons and strategic capabilities. We tend to close more add-ons because the multiples just make more sense but if there is an interesting technology that will bring significant revenue synergies we have the go ahead to do some non accretive deals.

3. I am more junior ~5 years of experience but from what I have seen and read on this site, working in corp dev for a PE backed company is a great place to build a career. The goal is to eventually work your way up to a pure origination role similar to what @Steff Mckee describes above, that is where all the money is. At the junior levels you are more focused on the deal execution / project and pipeline management side of the business. While valuable firms can outsource this if they really wanted to.

3b. It is very easy to move from firm to firm, it is mostly done through recruiters. The recuriters understand working for a sponsor backed company comes with different expectations vs. traditional corp dev so they naturally reach out to individuals already at sponsor backed firms.

4. ~150k total comp in a low cost of living city

5. Having worked for two different sponsors through two different firms - I would say no. The biggest difference I have noticed is different sponsors have different levels of involvement with their portfolio companies. One of the PE firms wanted weekly check-ins with the corp dev team to discuss pipeline status and to brainstorm different targets / origination ideas. While the other sponsor only checked in right before board meetings or when we needed to submit an LOI. 

  • Analyst 1 in IB - Gen
Oct 14, 2021 - 9:43pm

Awesome insight, much appreciated. Can you explain how you top out around 60 hours even on multiple deals? I'm still in IB, but with 2 or 3 live deals, I find myself working easily 75+ hours a week. Do you generally move slower such as 75 day timelines or are you partly outsourcing work to other IBs?

Oct 15, 2021 - 9:29am

We use 3rd party advisors to handle most of the heavy lifting in terms of diligence. Not IBs but rather Big 4 transaction advisory. Once we are under LOI it becomes much more project management of the different workstreams.

In terms of timelines, when it is a competitive banker lead process we really don't have much say - we can push the timeline a day or two if there is a relationship with the banker but the banker is still driving the timing. When it is a solely sourced transaction that is where you will see the longer more drawn out timeline.

The hours for Corp Dev are completely different from banking. When you're running a sell side transaction in IB you're managing a lot bidders who all of have different time consuming request - pulling and aggregating additional data, managing the data room, answering Q&A etc. While on the Corp Dev side you only have to worry about the requests coming from your firm / team and you are the one requesting all the additional data not pulling it. So while it takes time to aggregate a Q&A list you are just sending that to the bankers or the company, you aren't pulling and formatting any of the data. 

Oct 14, 2021 - 10:29pm

Analyst at a Healthcare roll-up (LMM Sponsor)

1. Always had live deals. Office hours were usually 9-6:30 with a dedicated hour for lunch. When I was the only Analyst, I usually spent an addition 10-15 hours at night or over the weekends but those were almost non-existent when the team grew out to multiple analysts.

2. Add-on acquisitions. Sponsor had a target of X amount of EBITDA per year which was easily exceeded. We were on track to do ~80 acquisitions and 2-3x the EBITDA goal in 2020 before I departed. 

3. I spent ~2.5 years in the analyst role. My company didn't really have a need for an additional Associate so I started looking for new opportunities to continue growing career

4. $65-80k, low col city

5. Not really. My boss was a former employee of the sponsor and always said he enjoyed the culture/environment better in his current role 

Manager/Associate at Healthcare roll-up (MF Sponsor)

1. 8-7 with a decent amount of late nights. I feel like I have a lot of down time during the day and then get a shitty assignment at 5-6pm that needs to be churned for the following day.

2. Add-on acquisitions. Sponsor has a targeted # of patients they want to acquire each year.

3.  Potential to grow at current company but may be looking for something with less hours in the future

4. $175k NYC

5. Unsure, I Havn't heard too much from our sponsor, I may just be too low on the totem pole. 

Oct 15, 2021 - 3:33pm

I can't add much to this with the exception of question #4. I've interview for a few PE-backed companies in the $100M-$300M range at the Director level - bear in mind these roles weren't exclusively M&A, rather general Finance that also oversaw corp dev. So, the pure M&A roles may be compensated differently. That said, the base + bonus ranges were $170K - $210K + 25-30% YE bonus. None of the roles had an equity component included, but "could be" a possibility based on the candidate. The only role that had equity was VP-level, again a general Finance role. That was target ~$220K base + 30% bonus + equity (tbd). 

  • 3
Oct 15, 2021 - 6:54pm

Not in corp dev, but was in corp fin at a PE-backed manufacturer for two years before moving to my current role.

  1. I averaged 30 hours a week. Never did any M&A work, though. There were long stretches of putting in only 20 hours and a few stretches of 50 hours.
  2. We were supposed to be a platform for bolt-ons, but then COVID hit and cut our EBITDA projections by 70%, so that never happened....
  3. The career path here is not very straightforward. Generally speaking, if you do well at one PortCo, the sponsor will happily move you around. The problem, though, is that finance is blamed for everything. So if you miss projections, expect the CFO to get the boot pretty quickly. It just flows down from there.
  4. Most manager and director of FP&A, corp dev, corp fin, etc. at the PE-backed companies that I interviewed at were around $200K all-in. These positions were coming almost exclusively from headhunters.
  5. I've only dealt with one sponsor. The lived up to their reputation, especially when it came down to cutting costs during COVID. That being said, I did have our CFO, CEO, and portfolio ops VP above me to shield me, so I never really dealt with this, other than the constant requests to run the 10,000th liquidity or cash flow projection scenario through our model.
  • Analyst 1 in IB - Gen
Oct 15, 2021 - 10:05pm

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