Why are you (still) in PE?


Asking because I am doing a lot of introspection about what I want and whether or not I'll be leaving this year before reaching VP or whether I want to commit long term. Leaning towards leaving. I'm burntout and don't love the work. Curious for everybody's perspective.

I am in PE because the opportunity presented itself and was "too good to turn down". I remain here for the same reason - this job is too "good" to give up without knowing two things with absolute certainty: 1) I am leaving for good reason and 2) where I am going is better.  

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Comments (78)

Most Helpful
  • Associate 2 in PE - LBOs
Jun 9, 2021 - 10:04am

There are two personas who are successful in PE:

  • Optimizing for risk / reward (almost zero risk for predictable, high upside) which you pay for with time / burnout / joi de vivre (assuming you don't really enjoy the work)
  • You really enjoy the work (from your post, it's clear you don't)

Are you #1? If not, the key marginal benefit(s) you have by staying are (1) incrementally padding your bank account each year, and/or (2) making another 2-3 year commitment to gain the skills of VP (process management).

  1. W/r/t #1: If you're in PE, no place you'll exit to will leave you anywhere below the line of "living comfortably enough to send my kids to private school and take nice vacations and... (et al.)"
  2. W/r/t #2: Up to you to decide how much you value this skillset

1) I am leaving for good reason and 2) where I am going is better

  1. Don't love the work and burned out is good enough reason - there seems be this weird thing on the forum where people aren't ok letting go and just being happy doing something else. It's ok - you don't need permission - go be not burned out, go do something you love (i.e. go be happier, it's ok)
  2. If you accomplish either or both of the two things above, then it's already better. 

Tl;dr: stay if you are willing to eat shit for the money or if you love the work. If neither of those apply to you, then you are leaving for good reason / where you're going is better (why waste time staying if you fit neither of the first two criteria, nor are making a skills commitment for one more go-round of doing the VP years.

Just a quick framework. Hopefully helpful. 

Jun 9, 2021 - 10:27am

Cheers. It is helpful and is generally how I approach the stay vs. go decision. I have a few mental "roadblocks" that make this type of framework tough to implement though:

1. I am risk averse and the trajectory in PE as associate heading to VP is tough to beat in terms of Risk/Reward (if the way you quantify Reward is with $).

2. I don't truly know what I love to do. I went into finance cause it was a "good opportunity" (I studied STEM) and have never enjoyed the work I've done over the past 5+ years in IB+PE. Looking at HFs and Corp Dev roles now. Both excite me for different reasons but I felt the same way about PE 3 years ago.

In the context of both of those things above, I am stuck on #2 of my original list - Is where I am going better? You're right that a large part of what makes a new role better is whether it solves #1. I know that burnout and general unhappiness is a good enough reason to justify leaving. However "Leaving" is only half the equation. I don't know, nor do I have any real way to truly assess, that where I may be going is "better" until I get there.

Another issue that I have, and suspect many others share, is psychologically flawed: I battle with the idea that I am extremely fortunate to be in this seat, where  thousands of people would love to be, yet I want out. How is that justifiable? How can I say "I want to quit", and give up the career trajectory and earnings that so many people would literally kill for? I understand that this is not a healthy way to think about anything, but I still worry about it.

  • Associate 2 in PE - LBOs
Jun 9, 2021 - 10:31am

With respect to:

I don't truly know what I love to do


In the context of both of those things above, I am stuck on #2 of my original list - Is where I am going better?

Let me propose looking at it the opposite way. You don't know what you love to do (none of us do, that is why we are lemmings on a path with high visibility). But you know what you don't love to do, which is arguably more important. The key here is not finding the perfect next step, it's trying something else because you know the seat you're currently in is not the key to happiness.

I understand that this is not a healthy way to think about anything, but I still worry about it.

Truthfully, I / we / the forum probably aren't best to help you with this. You might be better off talking to friends and family about this point because this is more philosophical than the career discussion element. It's a fair point, but comparison is the thief of joy. Your decision is not a relative decision, it's a decision you're making in the context / judgment of your own life and maximization of your own goals / happiness. 

  • Associate 1 in PE - LBOs
Jun 9, 2021 - 10:18am

I enjoy these reflection posts, thanks for this. 

As for me - I've been in PE for ~2 years now, after completing my analyst IB stint. Currently I stay because:

1. I learn something new every day, which I believe will help me with where I want to be eventually. When I say learning something new, that can be anything related to process management, business models, politics / emotional intelligence, sales / story crafting, independent critical thinking, etc. My personal goal is to either stay on the buyside or pursue entrepreneurship, thus I find these growth areas highly engaging and applicable. 

2. Related to the first point, I respect and enjoy the people I work with. I'm lucky to be at a shop where the people respect personal time, hold trust in me, and provide exposure in areas I've requested. They're also very intelligent and motivated, which I'm grateful for when I compare their behavior to colleagues at the "regular" jobs I held when I was younger.

At the moment, I'd only look to leave in the event that I gain enough conviction in an entrepreneurial venture, or when any of the two above points deteriorate (i.e. I stop learning and/or the culture falls apart).  

Jun 9, 2021 - 10:34am

Good points, and both reasons why I like the job as well. I'm responding here (and will to most replies) just to spur further discussion/debate and gain as much perspective as possible.

I think there are idiosyncrasies between firms that can override these positive attributes however and I think my firm/vertical/team has some issues:

Despite looking at 30+ since I joined, we have not done any new deals. I have spent thousands of hours on new deals just for them to die, sometimes literally 12 months in. We are on the verge of a new deal and an exit though, yet I don't find myself excited. Instead I feel cynical about both.

There has been some restructuring within our firm during my tenure and our vertical did not escape unscathed. I think we let go of the wrong people for political reasons.

I feel that I have far less freedom/independence than I would like (especially as 3rd year assoc heading to VP) and oftentimes find myself disagreeing with the approach seniors take.

In the context of the above, I find myself weighing the combination of learning experience, compensation, and broad career trajectory against the idiosyncrasies of the firm that I dislike, and my own personal burnout. I'm genuinely at an impasse about it and every time I feel like I've decided upon stay/go I wind up waffling.

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Jun 9, 2021 - 1:40pm

People on this forum optimize for prestige far too much. I optimized for sector expertise, deal profile and team / workstyle and am incredibly happy with my choice. I am at a sector-focused LMM fund ($500M-$1B) and made sure to diligence the team and talk to everyone before joining. Work with a group of accomplished but down to earth and genuinely nice people.

3+ years later I'm excited to be in a career track position with good opportunities to progress and participation in the carry pool. I have strong relationships with my colleagues both junior and partner-level and with C-level executives in our portfolio. The tradeoff was probably CUMULATIVE few hundred grand in total comp over the last 3.5 years but I'd make that trade 1,000 times over. It's not all doom and gloom out there, just don't prestige whore and figure out what you are interested in doing

  • Analyst 1 in IB - Cov
Jun 9, 2021 - 11:42am

Not sure what fund size you are at but could LMM pe or growth equity potentially help with the burnout problem? I know not all lmm pe is equal but from the contacts I've made, the lifestyle they've described is significantly better from those of peers at larger funds. 

  • Associate 3 in PE - LBOs
Jun 9, 2021 - 1:56pm

In a very similar boat - I think you have to really isolate the parts of the job that you like versus don't like.  For me, I find the modelling/financial engineering aspect extremely boring, which is what the vast majority of large cap PE entails, and I know I won't be sticking around much longer.  I personally like getting to meet entrepreneurs, learn about new business models, and think about growth strategies, so exploring earlier stage investing opps. 

PE attracts risk-averse folks that are willing to make pretty large trade-offs in terms of WLB and intellectual stimulation for a large salary.  Seeing friends get deeper into their career paths has made me realize that you can still have a pretty nice life and make some serious coin doing other things.  Sure, you may have to take some more risk, but after seeing how VPs/principals with families are up at all hours at my firm, I really don't want that for myself. 

Jun 10, 2021 - 8:49am

I like modelling and assessing the value of an asset. Figuring out what can go wrong and how to quantify it. I like the analytical side. I also like the strategy side like you. What I hate is that I have zero control over what I look at or what I spend my time on. I also hate the sheer amount of admin. The last 2 weeks have been 80+ hour weeks of literal fucking admin. I didn't even know that was possible. Haven't had a clean weekend since early May (although I am looking at one this weekend, knock on wood.)

100% agreed on the VP/Principal grind bit. My superiors below MD and Partner may be wealthy but they do not have lifestyles I want to emulate.

Jun 10, 2021 - 12:00am

If you enjoy the work but not the rigor your current fund is requiring of you, look at Family Offices or other permanent capital type of vehicles. The comp won't be the 375 you quoted but it'll be similar work at a slower pace with much more manageable hours. I had a few friends make that jump and have attested to significantly better lifestyles.

  • 3
Jun 10, 2021 - 8:51am

It's less about the rigor and more about the purpose of the rigor. I don't mind grinding if it's something I agree with / want to work on / choose to work on. I'm massively burntout from working on deals I don't like or agree with, and having to cancel plans and vacations for deals I don't want to work on. I have very little say. Even the stickhandling type stuff I do as a soon-to-be-VP I feel I have very little true say in.

I have taken a look at the CAD pension funds. No idea how to get an intro to any family office, but the long-term capital aspect is something that is attractive to me. I don't like dealing with LPs or fundraising at all. 

Jun 11, 2021 - 2:00pm

Echoing the sentiment here for family offices not because of the rigor but because teams tend to be leaner and the mandate is more flexible. Friends who have made the switch to FO from larger funds have mentioned that the increase in control over deal selection and also personal autonomy to be a significant improvement.

Additionally OP, just wanted to push back on an earlier comment you made about how you don't think there are too many funds that get better than your current firm when you consider comp., upward mobility etc. Are there any of those characteristics that you liked on paper but are NOT happy with in practice? For example, sounds like to me a lot of the frustrations with admin work and lack of input in investment decisions are related to the fund size and being a multi-national firm.

Personally, I entered PE thinking it would be a 2-year gig and would use that time to build certain skills and figuring out my long-term interests before transitioning out. Ended up taking a risk and joined a smaller MM fund because I liked the people and have been pleasantly surprised to find my outlook on PE changed because of the degree of control I have at a pre-VP level to make new deal decisions and ops decisions at my portcos. Also got the advice while I was recruiting to join a firm that was actively growing (vs. the stability of one more established) - also pleasantly surprised to see that translate into having a lot of whitespace and control over choosing what new sectors I explore for new deals. Dry powder is plentiful, and it seems like you're looking to pursue something genuinely interesting to you; maybe unchecking a few of your lower priority requirements while recruiting will give you a different perspective.

Jun 11, 2021 - 10:55pm

I actually did mean exactly that about the rigor. I found myself working so hard on things which didn't require that kind of time or effort but was asked of me anyway so I get what you mean. That burnout can be real and usually stems from the seniors / others on the team given the undue pressure they put on juniors for often times needless and onerous tasks.

For family offices I'd do some research on names and reach out individually, with many often using headhunters also used for traditional PE firms. Can't say much about the canadian pension funds in terms of recruiting or lifestyle though I have worked with CDPQ in the past where they were a co-investor on a potential deal with KKR and they seemed to be working through pretty grindy hours with the rest of the deal team (though the same will almost always apply to any firm in a live deal situation)

  • 3
  • Analyst 1 in IB-M&A
Jun 10, 2021 - 11:34am

This is a brilliant thread. A rare gem to find-thanks for having this discussion guys.

  • Analyst 2 in IB-M&A
Jun 10, 2021 - 11:40am

Not currently in PE but was for ~4 months after 3 years in IB before quitting to co-found a tech company. It's been a year since quitting and I think we may shelve the startup but one of my cofounders (ex-PE) and I don't know what we want to do next because it sure as hell isn't PE again. We both feel that the long-term tradeoff isn't worth it, especially when you can have it all slip from you due to politics or poor fund performance which are both fairly out of your control. However, we also don't know what other options exist that pay well and get away from the intense pace of IB/PE.

We want to "slow down" so we have some semblance of WLB to work on our existing and other ideas but no clue where to do that. I'm sorry that I don't have great advice to offer but we feel your pain. PE certainly wasn't the holy grail we were told it was.

  • Analyst 2 in IB-M&A
Jun 10, 2021 - 12:05pm

It's nothing crazy. We designed a software product for consignment stores. A lot of the products out there are dated and have horrible UI/UX so we figured we could carve out a little corner for ourselves. We have a handful of paying customers but not enough to sustain ourselves and we don't want outside funding so we're both getting antsy about not making anywhere near as much as we used to, especially since we've spent a year on it. My cofounder and I are both getting married soon and have weddings and other plans to pay for, so we're going to take the startup part-time for now. I shouldn't have used the word "shelve" because we want to continue to serve at least our existing customers and try to spend some time chasing down others next to a more sustainable day job.

No regrets whatsoever because it feels important to have done it and seen what the reality is like but that's likely because (a) we don't want to go back to PE and so haven't brushed against what may be a rough time doing so and (b) the finance job market seems to still be super hot so while we have yet to throw our resume out there, it doesn't feel like we'll have a tough time finding something with our experience. I'd likely be singing a different tune if my network was weaker than it is and the job market looked like 2008. The question is what that next something is, though. Despite me wanting to slow down, I see myself stepping back into IB for 1-2 years to rake back some of the money spent in the past year but I also know doing that would only keep me off-track of wherever it is I want to establish myself in the medium- to long-term so it also feels like wasted time to detour back in IB.

Existential crisis on some level!

  • Managing Director in PE - Other
Jun 10, 2021 - 2:06pm

3 reasons (MF PC)

1. Carry

2. Carry

3. Carry

 Been in this too long, put up with too much to walk away now without being able to have true optionality for next step 

  • Managing Director in PE - Other
Jun 10, 2021 - 3:01pm

Fundamentally I still find it interesting but that's probably only 30% of the battle; I have a good group head who I consider a real friend which helps immensely otherwise I don't think I could survive.  On the flip side I've been on the operating side of the industry group I serve and it can also be mind numbing. I guess I've seen too much at this point to really believe that the "other side" is much better.    On being trapped, yes somewhat, at a certain point it's very hard to give up 7 figures of carry that you've really earned. You'll day dream and then always come back to some form of just get your money first then reassess. 

  • Associate 1 in PE - LBOs
Jun 10, 2021 - 9:57pm

Obviously it isn't consistent week to week, but what are the typical hours like at your level? Asking because the MD on my team is literally online 8-9am to 11-midnight every day during the week and at least 3-4+ hours each day during the weekend and I truly can't understand how he does it at that point in his life. My team is overall very grindy, so trying to understand if this is common or if there is at least some improvement elsewhere 

Jun 11, 2021 - 9:48am

Not the guy you asked, but most of the MDs at my firm are definitely not 9 - 12 grinders. More like 9 - 6 in office and online thereafter as needed. Less "online" time than associates, but they can never actually unplug.

VPs and Directors (in my vertical especially) fucking grind though. No discernable difference between associate hours and VP/Director hours - part of my concern with staying around in PE for the long haul. I miss weekends and vacations. 

Jun 10, 2021 - 6:38pm

I work at a fund of funds shop where lifestyle is great. Sure - comp is lower but on the co-invest side I see loads of deals, do not do super deep dive due diligence and go through 1000 pages of FDD (summaries are enough, thank you very much). In terms of hours you are looking at 50-60 tops and carry when you get to VP.

I initially wanted to go into direct PE after banking but this opportunity came along and decided it will be a good fit. I had 4 criteria and still have for any job if I ever decide to move on:

- pay

- people you work with / culture

- hours / what will my lifestyle be

- type of work you do

It is super tough to get all 4 right but my current gig does a pretty good job of it. Doing fund investing might not be the most interesting thing on the planet but you only do it once every few years for the funds you cover and as you get to VP, you will have an associate to do most of the grunt work / data analysis. Pay will be lower at the associate level than direct buyout but once you are in the carry, you still have plenty to send your kids to private school and go to maldives (maybe not flying private jet).

Anyway - good luck but definitely leave this current situation would be my opinion. Canadian long term capital might be a good shout.

Jun 11, 2021 - 3:36am

Google Arkesden compensation report (I am London based) - this is very much in line for associate level for my shop but I think overall you should expect a slight discount (10-15%) to top tier banking comp which is compensated by the much better hours (no weekends btw) and better work.

Jun 11, 2021 - 8:48am

Reasonably new to this side but can still opine more broadly in high finance. Truthfully I don't think Canada really has that many attractive alternatives. There isn't the same base of high paying lower stress corporate jobs as is the case in the US (particularly the network of attractive places to live outside the financial centres). I think I'll have to keep running on the hamster wheel in PE to keep up with the skyrocketing CoL. TBD how long it will take me to give up outright. I think it will be about optimizing which PE firm I decide to stay in. Would be curious your views on what alternatives you'd even be looking at given you're living in Toronto...

Jun 11, 2021 - 10:12am

I agree - Canada is a relative wasteland compared to the states. I got lucky in that I'm paid based on USD market compensation converted to CAD, at 2020 FX rates.. which pays me VP salary at Associate level. I am sure that if I go to VP I won't see a big bump, or any bump. 

I am not staying in Toronto any longer than I absolutely have to. It's definitely unfair of me to form my opinion of the city because I've only ever lived here during lockdown, but I came here burnt-out and missing home and nothing has happened to change that. Out West at least I could escape into the mountains for a day on the weekends.

I'm in four processes at the moment and none of them are in Toronto - only one is in Canada :(

Jun 11, 2021 - 1:47pm

Coming at this from a different angle and diving a little deeper into "I'm burntout and don't love the work." 

Here's something has helped me:

Disassociate yourself from your situation - what would you tell your best friend if he told you that?

Seriously, take a few minutes and think about it.

Hope this helped in some way - best of luck with your decision man. 

Jun 17, 2021 - 11:26am

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  • Associate 1 in IB - Cov
Jun 11, 2021 - 8:09pm

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