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WSO Podcast | E61: Crazy Bonuses Lead to Early Associate Promote at a Bulge Bracket IB

WSO Podcast

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Member @FloridaMan shares his meteoric rise in his short career on Wall Street. Learn how he got over $150,000 in compensation as a first-year analyst and over $200,000 as a second year. In this episode, we follow his path a large state school in Florida to a bulge bracket investment bank, all the way to a family-owned private equity fund and finally to his most recent landing spot, a traditional private equity buyout fund. Make sure you stay to the end to learn his best piece of advice is and what "ABR" means.

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WSO Podcast (Episode 61) Transcript:

Patrick (CEO of WSO): [00:00:06] Hello and welcome. I'm Patrick Curtis. Your host and chief monkey, and this is the Wall Street Oasis podcast. Join me as I talk to some of the community's most successful and inspirational members to gain valuable insight into different career paths and life in general. Let's get to it. In this episode, member FloridaMan shares his meteoric rise in his short career on Wall Street. Learn how he got over one hundred and fifty thousand dollars in compensation as a first year analyst and over two hundred thousand dollars as a second year. In this episode, we follow his path from a large state school in Florida to a bulge bracket investment bank all the way to a family owned private equity fund, and finally to his most recent landing spot, a traditional private equity buyout fund. Make sure you stay to the end to learn his best piece of advice and what a B.R. means. Enjoy Florida man! Thanks for joining the Wall Street Voices podcast!

FloridaMan: [00:01:03] Everything's right with me, Patrick.

Patrick (CEO of WSO): [00:01:04] So it'd be great if you could just give a quick summary.

FloridaMan: [00:01:09] Yeah, so I'll start kind of high level on my background, so I'm from Florida, given the name Florida man from the rural part of the state went to a state school division, one college to play baseball actually was recruited on there, played for a year and a half and then got cut because I learned I wasn't athletic enough at the end of the day, started focusing more on my major, which was finance went straight from that school to kind of a mid-tier bulge bracket bank, I'll say. And then from there to a family office and their private equity arm. And then recently left to join a generalist middle market fund all within New York City.

Patrick (CEO of WSO): [00:01:58] Nice. And so let's start back all the way in Florida at your state school. So did you when you got recruited for baseball? Tell me about that. Were you thinking like, Hey, I'm going to go to the majors like I know? Because as a high school kid, you know, you're probably to be recruited or to come in D1, you must have been pretty good.

FloridaMan: [00:02:19] Yeah, so, you know, baseball is a weird thing. It's like it's one of the few college sports where if you play at a college team, you're the B grade player because all the A-grade players get drafted, right? So you learn pretty early on. If you're not getting recruited to start at the best schools, you're probably not going to go pro. And so even, you know, the seventh hitter at Texas is probably not going to go pro and they have to know that really early on. So baseball can be a very humbling sport, not just from that perspective, but from the fact that you fail 70 percent of the time as an offensive player. So I never really thought I was going to go pro. I like the I played on a really competitive travel ball team growing up. And then at a really competitive high school and we traveled around the country and played some of the best teams from all around. You know, California, Nevada, you

Patrick (CEO of WSO): [00:03:14] Knew you were, you knew you were good, but you knew pro is probably unlikely.

FloridaMan: [00:03:18] I had seen our like this. I had seen people like Bryce Harper at, you know, like showcases that we would compete against. And I just said, like, there's a different level of skill. Yeah, that puts certain people in a different category. So I knew my place early on.

Patrick (CEO of WSO): [00:03:34] It's like me with soccer man. Same thing. Yeah, so cool. So you kind of went through the program there. And then so pretty early on, you knew, Hey, I, you know, sports aren't going to be my ticket. Were you a good student?

FloridaMan: [00:03:51] I was so I basically declared finance as a major. Very early on, maybe like sophomore year in college, both my parents are accountants and I knew I wanted to do something technical, but I knew I didn't want to be an accountant. So I chose. I chose finance because I thought it brought some social aspect of kind of business along with the technical aspect. Sure. And then there was a program at the school I went to that I ended up joining as a result of focusing on that major. So I was like a T.A.. I was involved in like the student run hedge fund, which a lot of these state schools and a lot of private schools have as well. So really immerse myself in the major from an early point and I went from there.

Patrick (CEO of WSO): [00:04:36] So where was it well-known? Like banking was like invest. Banking was kind of like was at the top kind of destination for people coming out of your school. I mean, giving it to a state school. I'm sure it has some decent alum kind of network on there. Can you talk to me a little bit about? Were you able to land a junior summer internship, a sophomore internship? How did how did you kind of progress through your college career to kind of set yourself up? Yeah.

FloridaMan: [00:05:00] Yeah, sure. So my sophomore year, I did a this is kind of a I did pretty much the most typical route. I did a, you know, semi high finance internship. So I interned at a wealth management office in Florida, at a at an office where the kind of the head manager ran a semi active hedge fund. And so kind of learned a bit about capital markets from that perspective and capital and the difference in debt and equity and that kind of thing. And then from there did a junior year internship in New York City in banking and then join the same bank after that. And I would say the pipeline from that school is strong. It's a top 10 public school kind of thing. Yeah. And you know, if you're in this certain program at that school and you're immersed in your major, I find that the placement is pretty attractive. And the alumni group, even though it's a giant school, is pretty supportive, especially in New York, given there's not that many alumni who come to New York and then take part in banking. But it's a growing it's kind of a growing reputation from that school, and I try to help out on the back end as well. So yes.

Patrick (CEO of WSO): [00:06:10] So tell me a little bit about that, about so coming into your, you know, you had the typical private wealth management summer internship on in your sophomore year. Like you said, you're coming into your junior year. Were there any banks coming onto campus and how did you kind of set yourself up for that? You obviously had like a finance oriented resume. You were doing like the whole hedge fund thing you were, you know, showing leadership on campus. But what did you what did you do? Were you talking to people or early on? Was it just people? Was it the coffee chats and the whatever you call it when they come on campus? Is that what you did?

FloridaMan: [00:06:46] Yeah, yeah, so I think it was kind of interesting, so the school I went to, they basically had this program that took the top 30 finance majors, made them take the GMAT and then put them in this program. And that program basically was a, you know, boot camp is a funny word, but it was like a quick intro into what it would take to get a IB internship in New York from a non target school. And so they did mock interviews and resume reviews, and they helped you get a sophomore year internship. And they introduce you to alumni. We actually flew up to New York, which was my first time in New York. And, you know, we like toured banks with alumni, and so we got a feel for what it was. But I would say going into sophomore year and maybe even after sophomore year, I didn't know what investment banking was. I wasn't from like a large metropolitan area. I was from a very rural area. And so investment banking, I remember hearing the term the first time as like a sophomore and having no idea what that meant. And slowly progressing and learning it through one part, being a good student and falling into this program. And secondly, from reaching out to a ton of alumni and being outgoing and going to grab a drink or coffee with as many people as you could, but being so far away. But I would definitely encourage others to

Patrick (CEO of WSO): [00:08:14] Do the same, but like being so far away. Was it the trips to New York that were key or was it the fact that they came down to campus?

FloridaMan: [00:08:21] Yeah. So some banks came down, some didn't. There were out of the New York banks. There's probably four that made that school a target school. And so it would take, you know, two to five kids from the university as a whole, but almost all of them were from that 30 person program. And then there were regional banks. So like, think SunTrust, Wells Fargo, Stevens, Raymond James, those kind of banks that would also target the same program kids. So there was enough on campus to get exposure, but there were also a large group of banks that had no interest in flying down and you had to kind of make your way up. I actually took part in the interviews that happened on campus. One of the New York banks that did target the school.

Patrick (CEO of WSO): [00:09:11] So you made it in that way. So out of those 30 people, I'm curious this with this program. Was it 100 percent placement or 80 or what would you say into banks?

FloridaMan: [00:09:18] It was like ninety eight wow. With like 80 percent into IB jobs. The other 20 percent maybe went into like an asset management role or so every now and then there would be someone who went into kind of an interesting finance kind of corp dev like someone did the business development department, which I thought was pretty cool.

Patrick (CEO of WSO): [00:09:42] And so what was the like? How hard is it to get in there? I assume given everyone's picking from there is probably super competitive. Is it a GPA cutoff thing you have to interview for it? How does it how do you even get into that program?

FloridaMan: [00:09:53] Yeah, yeah, it was all those. So it's it was less about how good of a candidate you are and how early on you heard about it, I would say. So you had to have like a three seven GPA, which at a four, whoever's listening that it comes from a big state school. You know, your first two years are often not too challenging. It's a lot of intro classes and a decent GPA is very doable and it's about hearing about the program. And then you apply and you give kind of your involvement, et cetera, and then they make you take the GMAT as a sophomore in college. Oh wow. To test your aptitude, and I think the cutoff score was like surprisingly high. Like I want to say, it was like seven hundred was kind of like, you break that, then you're in. And so kind of all those factors and then they displayed interest in finance and kind of route of what you wanted to take that you could display to. The what I'll describe as the gatekeepers at that school allows you to join into that program fair.

Patrick (CEO of WSO): [00:10:57] And the gatekeepers, are they like professors or they just do other students who are like

FloridaMan: [00:11:01] It was two professors and then one administrative person who actually had a ton of say, even though they lacked finance experience, but did a very good job of vetting what I would describe as motivated individuals.

Patrick (CEO of WSO): [00:11:15] Great. Ok, so you're kind of doing the networking thing you end up kind of in this interview cycle, dropping your resume. You're in this program for the banks. Come on, you get do you get interviews across all four because you have, you know, pretty strong resume and coming from this program?

FloridaMan: [00:11:33] Yes, so the one thing about the program that I think is interesting is you basically have to say, here are the two banks I want to interview at OK, out of the maybe eight that come to campus or six that come

Patrick (CEO of WSO): [00:11:46] Game theory

FloridaMan: [00:11:47] Going on and

Patrick (CEO of WSO): [00:11:49] Game theory, some game theory going on there, I'm sure, because like you do choose the top two or do you choose the ones that are highly, you know what I mean? Yeah, that's

FloridaMan: [00:11:58] Interesting. It's absolutely that. But it's game theory on the bank's part, too, because that administrative person that I was talking about before will basically tell the banks, here's who wants to come here. So if they do good, they will accept, and we have to almost agree we will accept. And so that helps the banks get comfortable with extending offers and keeping a very high acceptance rate, and it keeps the administration comfortable because they know they'll have a high placement rate. So it's a bit of like them. The administration slash professors gaming the system. But all in all, it's utilitarian. I'm sure some kids kind of get the short end of the stick and some kids benefit greatly. But all in all, I think it benefits kind of everyone because it keeps a pipeline of alumni going into these banks and it keeps the banks happy with their acceptance rates.

Patrick (CEO of WSO): [00:12:48] Yeah, it's actually fascinating. I've heard about these types of programs that all these like larger state schools, it's it's people are like, Oh, that's a lot of placement. When you think of how large the student population, how many finance majors are, it's actually pretty small, right? So it's important early on, like if you are going to a state school or non target large school to look out for any of these groups or these clubs and figure out what you need to do to get yourself aligned really quickly.

FloridaMan: [00:13:12] Yeah, I was going to I was going to say it's all about, you know, the school I went to had, I don't know, thirty five thousand undergrads. Yeah. And you know, business as a lot of these state schools is one of the most popular majors. And although the finance major is the most natural kind of tangent into banking, there are also accounting majors or economics majors. So when you go to try to get place, you are probably going to compete against. I don't know, five hundred to a thousand kids where if you come from a smaller, liberal arts school, there's a thousand kids. That's half the school. Yeah. And so, you know, there are opportunities to differentiate. But keep in mind that these banks aren't going to fill half of their analyst class at the same school, especially not a state school in a lot of cases. You know, take that for what you will. Yeah. So differentiation is key early on.

Patrick (CEO of WSO): [00:14:07] Yeah, for sure. Cool. Good to hear. Yeah, maybe I went to a small, liberal arts college and I can say it's you can almost call it a semi target because just if you want to get on the street for how small the school is actually has a pretty good presence except Williams. But anyways, right?

FloridaMan: [00:14:23] So I was going to say the NESCAC school is a good example, but you know, yeah, I'm familiar with them to some extent.

Patrick (CEO of WSO): [00:14:31] Cool. So you're kind of so you land, you land this job at what you call a kind of middle tier bulge bracket bank and you're kind of going into the summer. What are your thoughts? How was it? Was it, you know, long working? Or did you have to work, you know, 80 plus hour weeks? Was it something where it was more just collegial fun? What was that first summer like?

FloridaMan: [00:14:51] Yeah, I think, you know, if you're trying to get a full time offer, the hours are going to be long, but you're going up there to get it's a 10 week interview. I'm like saying anything that I feel like everyone here is over and over again, but it really is true, right? Like, you're there for you're really on the debts for probably eight to nine weeks, depending on how long your training cycle is. And it is an interview starting the moment you get there. And that's time matters, not just because of like, Oh, I'm the hardest working, but people want to see that you're engaged. And so if you're asking for other forms of work or you're just engaged with the group, like maybe you just want to talk to your peers or the associates or the analysts or whatever. That goes a long way. So when people say, like, we're the hours long, it was like, Yeah, they were really long, but it wasn't unbearable at all. It was, in fact, like I made really good relationships with a lot of my, you know, summer analysts thoughts that I still connect with today. So it's just a breeding ground for motivated people, your age and like, take advantage of that because that may be a big part of your social network in the city going forward.

Patrick (CEO of WSO): [00:16:01] No. Yeah, for sure. And did you feel like was the was the offer right? Pretty solid from this summer? Was it like a. 70 percent higher, 80 percent.

FloridaMan: [00:16:12] Or would you say? Yeah, I think I think the bank targets 80 percent and I think it was about that that summer, and I think that so after I started and I don't want to jump ahead too much, but I got really familiar with how the hiring process worked. And I think they always targeted 80 percent and they almost always hit it with some standard deviation of plus or minus 10 percent. But that's only

Patrick (CEO of WSO): [00:16:41] That's pretty high. That's pretty high from what I've. Yeah, that's pretty high. That's pretty high, which is, you know, four out of five. Basically, kids get the offer. Did you feel like you were at risk ever during the summer that you had messed up? Or did you feel like you were getting good feedback and you were kind of you felt like you had enough of like the networking skills and outgoing where you were in a good spot?

FloridaMan: [00:17:04] No, I felt like I was in a good spot early on. Like I said, that program prepares you like you take modeling classes and they bring in all kinds of people to get you familiar with what you're going to do. Like, I knew how to spread comps coming in. I knew how to do. You're probably more prepped to your work. That kind of thing where, you know, a NESCAC counterpart may not exactly know how to do that.

Patrick (CEO of WSO): [00:17:30] Clueless? Yeah, totally clueless. I didn't even have a banking summer internship, so you can imagine what happened to me when I first started? Right, right. So, OK, so you survive the long summer. You make some good connections and seems like it sounds like you enjoyed it. And tell me a little bit like, did you any funny stories? Were you able to enjoy the summer at all? Go out?

FloridaMan: [00:17:55] Oh, absolutely, absolutely. We did. I mean, name an intern bar, right? Like beads or whatever beer garden you name it like we did. It golfed a lot, you know, on like Sunday, when we could have lived in an apartment with a bunch of guys and we all crammed in there. All the school, I went to the guys who then we live together. And our first and second year out of college. So it was great and they actually all went to different banks. And now I think all of them, except one, work at different private equity firms. So it's been a highly valuable network to keep through the years. And I mean, they're not just friends, but they're great professional networks, too.

Patrick (CEO of WSO): [00:18:42] So, yeah, I think that's important is like, yeah, you guys all start out. But now it's the same thing with me, like the people that start off as analysts. I mean, I'm older than you, but it's incredible, like one's running his own hedge fund. The other ones that like the top of this, like p, you know, one of these incredible funds and like, Wow, it's just unbelievable what people are doing. But so, OK, so you're kind of let's go back to when you kind of started full so you go into senior year, you're like, super happy, I'm sure, and have a blast your senior year and you basically are, you know, you're kind of going to be coming in and working pretty hard. Did you do anything to prepare? Did you do anything to kind of leading into the into the first year besides getting, you know, figure out who you're going to live with and finding an apartment?

FloridaMan: [00:19:29] Yeah, I you know, this is not a plug for however, many people are listening or no one told me to say this, but I did do like the Wall Street Oasis. Like, I think it was just like an LBO modeling course. And I. And it's funny at the time, I didn't judge it based on value. I just judge it based on it was the cheapest and it was pretty helpful. And, you know, it was just good to have as like a quick refresher coming into the summer after, you know, not taking a year off. That's the wrong way to think about senior year, but definitely not pushing quite as hard as I had the previous couple of years. Their interviews and making sure GPA was high and all that, so did some preparation kept somewhat abreast in the market, you know, asked the group that I was going back into for things like equity research reports, reading materials, that kind of stuff, you know, leverage primers to get familiar with terms, things like that. Those things go a long way. It shows your group that you're interested, you're engaged and you want to hit the ground running when you get there. So, you know, even if you just ask for those and you kind of skim them, that that goes a long way and I can speak to that from being on the analyst, you know, Junior Associates side, when a summer intern would ask for that in advance, I'd be like, I like that, and that says a lot.

Patrick (CEO of WSO): [00:20:55] So yeah, that's interesting because like it's almost like you're just showing that you're not going to just kind of slide in and hope things work out. You're putting in a little bit of legwork early on. So hopefully you get to hopefully you get to travel a little bit or do something after right after graduation before you started. But where you kind of going into banking, thinking, OK, I know private equity recruiting can start super early since, you know, it had been moving up at this point, it had been moving up every year. Or had you heard rumblings of private equity kind of prior to your analyst stint or what were the thoughts going in there?

FloridaMan: [00:21:30] Yeah, I, you know, I didn't know if I wanted to. There was always some thought when I first started in banking that I wanted to go back to Florida, and so I didn't know exactly what I want to do. I just kind of thought, OK, I'll do a couple of years in New York, have a good time, saved some money and then go back to Florida and get a Labrador and go fishing.

Patrick (CEO of WSO): [00:21:56] Did you have debt coming out of school?

Speaker2: [00:21:59] Yeah, right, so, you know, that isn't how it worked out, and after, my

Patrick (CEO of WSO): [00:22:06] Gosh, no, I was asking sir, I was asking if you had any debt coming out of school, is that why you're like, I need to save money or you're just more like, Hey, I'm going to save and then just go back and live, Oh, no,

FloridaMan: [00:22:15] Relax. I actually had no debt. Okay, good. Big bonus of state school if you plan accordingly and. Yeah. I didn't have any debt, which was nice, I just meant, you know, you get overpaid, not overpaid, but you get paid handsomely as an analyst. And you know, if you live between your means in some way, shape or form, you will save some money at the end of the year and you know, based on your bank's performance. And you know, I came out of school in twenty fifteen, which was a really good time to go into banking market was hot. Lots of deals were getting done. And so for three years, I pretty much came out into a bull market. Yeah. And tell me,

Patrick (CEO of WSO): [00:22:59] Did you tell me what the is? Were the pay ranges? Like, where are you? Can you tell me the pay ranges? So was it like eighty five bass coming out or 80 bass? And yeah,

FloridaMan: [00:23:10] Yeah, yeah, I can tell you for sure. The first year was eighty five and then my bonus was 70 as a first year, so it was like one fifty five all in. It's that saying 70 was kind of top ten percent. I don't I don't know if I got the highest. I think maybe one or two kids got higher. Second year was ninety. And then the bonus my second year was one 15, which was like a good, a good bonus. That's crazier.

Patrick (CEO of WSO): [00:23:43] That's really

FloridaMan: [00:23:44] Solid. Yeah, according to kind of my street,

Patrick (CEO of WSO): [00:23:47] Your second year out of school, you're making, you're making over two hundred thousand.

FloridaMan: [00:23:51] Yeah, exactly, exactly. And learning a lot and taking on a lot of responsibility and then was early promoted my third year to associate, so I've got a nice, you know, like sign on bonus, which was something like 40. Oh, forty thousand. Yep. And then you start at one toe base. And then I had one bonus as an associate and it was one fifty. So that year was a really nice year for me.

Patrick (CEO of WSO): [00:24:25] Yeah. So I can see why, especially with living with a bunch of other roommates, I can see how you could save some money with those that was significantly higher than when I was in banking. I had seen those numbers. I have seen those numbers, but those bonus numbers are really solid. Your bank was probably crushing it those three years.

FloridaMan: [00:24:43] The bank was having record years. Our group was having adequate years and I was

Patrick (CEO of WSO): [00:24:50] The top

FloridaMan: [00:24:50] Performer committed. I was I was performing well. Yeah, I was. I was near the top kind of 10 percent of my class every year. And, you know, it was really engaged, sat on like an internal board at the bank, which helped with, you know, making analysts and associates lives better and basically was placed on that board by being engaged, being outgoing and performing well. Yeah. And so what do you think? Why do you think why?

Patrick (CEO of WSO): [00:25:18] Why do you think just why do you think you were able to perform so well? Because there's a lot of go getters that come into banking that are, like, not afraid of the long hours, but why do you think? Do you think it was that program that helped you so well with the internships? Or do you feel like it's just a personality trait that you developed over time with practice? What sets you apart? Because there's a lot of really smart kids, even personable kids that go into this industry?

FloridaMan: [00:25:41] Yeah, I think if you ask like an MBA or VP or whatever and banking like what makes a great analyst better than a good analyst or something along those lines, they'll say proactivity. So like looking to do the next step. Don't just be a computer like, you know, good analysts can be a computer. You give them work, they churn out work, whatever their numbers are right? Great analysts do the work and then say, this is the actual the analysis we need to do. Or, you know, here's why I actually disagree with that. You know, my MD always told me that my best trait was I bordered the line of insubordination and he, like, loved that. Yeah. And you know, I think that's where I kind of tiptoed, and I was never kind of afraid to say what I meant, but you have to do it in a very respectful way. What I would tell kids, you know, when I was a senior analyst, second year analyst is what goes the farthest to me is a positive attitude like you can be the best analyst in the world. But if I hate to come to your desk and ask you for help on something, or if someone hates to like, ask you to stay a little bit later, yeah, because they're worried about your reaction, your bonus is going to be lower regardless of work product. Yeah. And if your product is in the 70th percentile, but people do not mind asking for help or want to engage with you on projects, you're going to be top, top bucket, even though your work product may not reflect that. So a positive attitude and engagement go a really long way, not just in your internship, but kind of forever. All right, for your experience, it's all fair.

Patrick (CEO of WSO): [00:27:26] Ok, so you're kind of get the early promotion to associate. Was that something that had been in place for several years or was it kind of a new thing when you got it?

FloridaMan: [00:27:36] It's funny, self-fulfilling prophecy. So that internal board I sat on, I pushed for it. And then when it got improved and well, here's the thing, and a lot of people may know this. So Goldman did that. They uh. And I wasn't at Goldman, but Goldman Sachs a couple of years ago when I was in banking. So maybe three years ago, so call it twenty sixteen. Twenty seventeen ish implemented the two years as an analyst, been an early associate, promote and an attempt to keep more kids from going straight to private equity to incentivize them to stay and show that the bank is investing them, et cetera. And when Goldman does something, you'll notice that the street will often follow. Yeah. You know, whether it's Goldman is better is a weird word, but it's more just like they tend to set trends at some kind of organizational culture level that other banks tend to kind of follow suit to stay competitive. And so it was a mix of Goldman doing it and then us pushing for it internally. When that happened, it was like the natural thing would be the guy who pushed to implement it would get the reward.

Patrick (CEO of WSO): [00:28:43] I think it's hilarious that you're like, Yes, you should absolutely get the early promote. And yeah, I'll take that.

FloridaMan: [00:28:49] Yeah, exactly.

Patrick (CEO of WSO): [00:28:50] You're like, Yeah, yeah, you can promote. So you get that promotion and you take it was at this stage once you took that promotion where you like. Wait a second here. Do I want to be a banker for the rest of my life? Is or what else is going on? When did you kind of pick your head up and say, maybe I should start recruiting for P?

FloridaMan: [00:29:07] What happened was when I got the early promote, I actually wasn't thinking about leaving, but as an associate and I think there's a lot of people who are really cut out for banking, and I think banking is a great profession. And you know, some analysts who leave banking have this really bad taste in their mouth, whether they had like a bad boss or they had a bad experience or whatever. I left with a good or I had a good taste in my mouth at that time, and I left with a good one. And so I'm adamant that it's a good profession. I had felt that my learning curve had flattened, and I realized that when I got a promotion and I wasn't doing anything differently than I was doing the year before. And so as a second year analyst, I was often staffed with the first year analyst under me as kind of like support, and I travelled to meetings and, you know, did all the good things of banking or I got put on good projects, et cetera. And as an associate, I got a slightly better desk and got knocked out of the bullpen, but nothing really changed. And then I compare. I was comparing my experience as an early promoter associate to my, you know, friends, roommates, colleagues, experiences at whatever by side role they were taking part in. And the conversations I was having with them was they're learning a lot. They're being put under different situations and getting out of their comfort zone. And I felt like I wasn't. And so although the bank was supportive or supporting me and I had a positive experience, I realized that, you know, to continue or continue developing my whatever professional toolkit, if you will, I needed to make a move. So I feel like this is

Patrick (CEO of WSO): [00:30:46] I feel like this is common, though, like the banks are have had this attrition problem for forever. Really, it's just getting worse and worse every year where it's I think it's gone something from like the nineteen nineties, it was something like two and a half years was the average tenure. I think now it's something like under a year or like a little over a year or something right for an analyst. And so do you feel like this program has helped or just helped on the margin? Like the analysts, I'm talking about the analysts to associate early promote. Has it helped, do you think?

FloridaMan: [00:31:17] Yeah, yeah, it's a good question, and I think the statistics would show. So I know that my year, the other early promote left a year like six months after me. So I would say my year it didn't. But I know the year after they maybe. And oh, just for reference, this early associate promote was kind of like for people every year out of remaining analyst class, because remember, this is the end of your second year, so you've had some attrition after your first year? Yeah. So maybe out of the 70 person analyst class that came in as a first year, maybe there was 40 left in the second year and then they gave four offers right. So 10 percent of the class at that time got an offer to kind of. But how many people actually take it?

Patrick (CEO of WSO): [00:32:06] How many actually take it? Almost everyone takes it, but then a lot of them still jump, right?

FloridaMan: [00:32:11] Yeah, I think a lot. I think a lot of people take it one. There's a sign on bonus, too. It helps with marketing yourself if you do want to leave. Yeah, and you know, some people may, you know, may argue that that's ethically wrong to just take the promotion that someone else may have gotten and then leverage it for position elsewhere. But at the end of the day, like, that's kind of this industry at the end of the, you know, people move around a lot, kind of at every level, not just banking. There's you'll notice that if you go look up a senior guy at private equity firm X, they're going to be they're going to have experience from eight or nine places at this point. Or, you know, six.

Patrick (CEO of WSO): [00:32:53] Yes. I mean, yeah, that's understandable. But like the it's just surprises me that there wouldn't be some sort of like claw back on that signing. So like they would give that offer as you're coming up into your second year for. So for example, like during your bonus

FloridaMan: [00:33:09] There, so there is just to

Patrick (CEO of WSO): [00:33:12] Ok. Yeah, so you have to give it back if you leave after, before you do a year or something like that.

FloridaMan: [00:33:19] I think when the first year, it was a 12 month, if you finished 12 months, there was no clawback. Now I think they've done 24 months and I think it's pro-rated. So if you stay for six months, you only pay back 75 percent got it. That makes sense. But it's interesting, right? They found that even banking compensation, which is higher than most private equity and then, you know, they can give you cash up front in this bonus. And all these things, like kids aren't staying for pay like they're actually going for the experience. And the learning curve is kind of most important. So I've seen other banks take part in things like they'll transfer to groups. So you kind of learn a new industry or that that all kinds of stuff they do try to get.

Patrick (CEO of WSO): [00:34:09] Do you think they need to get like ping pong table, ping pong tables and beer and kegs in the in the bullpens?

FloridaMan: [00:34:17] I yeah, I don't. That would be so bad.

Patrick (CEO of WSO): [00:34:19] But no liability there. Don't worry about it. The insurance intern's drinking with the analyst.

FloridaMan: [00:34:27] Yeah, right?

Patrick (CEO of WSO): [00:34:29] Yeah, it's one of those things. It's just tough for that. It's I don't know what they're going to do. Honestly, I think they just have to keep

FloridaMan: [00:34:37] Broadening, you know, they're already competing with tech. Yeah. So like, I don't know, thirty years ago, 40 years ago, you would argue that the smartest people go into investment banking. Maybe, maybe you would argue that that's how some people would describe it. Certainly, bankers would describe that. Yeah. Now you would argue that the smartest people are probably going to Google or going to wherever right name tech firm X. And so they're competing for smart talent at a college, not just for different industries, but they're competing within finance as well. Because private equity, there's more private equity firms offering analyst classes for one, and there's more. They're offering really early offers to basically bet that the bank gives them good training and good experience for two years, and then they get to poach them and reap the rewards.

Patrick (CEO of WSO): [00:35:30] Yeah, the private equity analyst programs. I know KKR recently started one up. Have you seen that be a trend recently where more and more I know that I know the recruiting has gotten ridiculously early where it's now? What right? When the analysts hit the desk, they get recruited for private equity within right after coming out of training? Yeah. So yeah, I think, yeah, go ahead.

FloridaMan: [00:35:53] Right? Well, I know that what cycle recruiting kicked off and to not age this podcast, it's 2019, so cycle recruiting kicked off in like late September or October ish. So maybe it was like beginning of October. Middle of October, for the most part, is when cycle recruiting kicked off, which means after training you've been on the desk two months. But that's not what private equity. It's funny when people are like, Oh, they don't have any experience, like, that's not what private equity is betting on. They're betting on a smart enough kid who and then they're betting on the bank to give them a good experience. Right, right. So like, that's the whole business model is so what we're going to bet you for intelligence and motivation, but make sure that you're in a good group at a good bank that we know will give you quality experience. So it makes perfect sense for me from if I was a, you know, owner of a private equity firm, why would I hire except from a place where a kid is going to have two years experience when I hire him? That being said, you know, I just read Schwartzman's book. I just finished it. And they hire a third of their juniors fresh out of college. They have an analyst program, so there's an argument to be had both ways.

Patrick (CEO of WSO): [00:37:09] I was going to say, why don't the funds just go all the way back when people get summer analyst offers? Or, you know, or they get the full time offers for the junior year?

FloridaMan: [00:37:19] Well, you know, banking's adjusted as well, right? Like thinking they're going sophomore.

Patrick (CEO of WSO): [00:37:23] Yeah.

FloridaMan: [00:37:25] Right, exactly. I mean, there's more sophomore programs, right? Yeah. So they're not just recruiting you for your junior internship now, they're trying to get you as a sophomore and then to come back. I think that's backfired a little bit because. I don't know. Sophomores will often leverage that offer to try to go somewhere better as a junior and then that junior offer will they'll try to leverage somewhere. It's bizarre. It's like just leverage the offer, but

Patrick (CEO of WSO): [00:37:51] Like any good banker would come on. And so anyways, the funny part, yeah, I've heard, I've heard, I think Bam and a few other places are now giving two year offers. So if they give you a sophomore summer offer, they'll give you a sophomore and junior summer offer. And you have to accept for both years, which is kind of which is kind of silly because it's like, OK, the person could just renege or trade up. But after their first sophomore. But anyways, let's go back a little bit to year. You know, we'll wrap up soon, but let's go back a little real quick to your decision and your timing. So you did another almost full year as an associate junior associate. After this quick promo? And then when did you start kind of looking for P? How did you just start talking to traditional recruiters and getting on cycle? How did that work?

FloridaMan: [00:38:35] Yeah, exactly. Exactly halfway through a little bit before half way through that third year, I started for the first time. I started throwing my hat in the ring to the general placement firm world, of which I had a lot of good connectivity with because of these colleagues and roommates and friends that I connected with. So I'd always ask for reference, which I think is good if you can do that. So, you know, Friend X who got placed at, you know, P firm wide, who has a really good relationship with, let's say, I don't know, odyssey. or something like that. He would introduce me via email. I can vouch whatever. And it's a lot more receptive and often a lot better, especially if you're from a typically non target school as you try to jump into private equity, which is

Patrick (CEO of WSO): [00:39:33] A lot of the recruiters are

FloridaMan: [00:39:34] Lazy. I mean, that's the truth, though, right? Yeah. They don't want to put the non-traded kid. Yeah, they don't agree. Pedigree labeled and all that.

Patrick (CEO of WSO): [00:39:42] So, OK, so you basically you put your hat in the ring and you get some kind of warm intros. And was that that it that was enough to get you kind of into the into the cycle and where the interview's tough, where they technical, it looks like you kind of came in almost as like, you know, not the typical associate role. You want to talk about that a little bit.

FloridaMan: [00:40:05] Yeah, I would I would have I was looking for immediate. At the end of my third year, so I basically would have had one more year of experience than the typical associate joining. And as a result, not just of my, you know, two year delayed recruiting cycle, but my experience and my ideal kind of experience on my resume as well. My interviews were probably a little bit more technical in nature to make sure that everything checked out, which was totally fine. And I would say, if you know, I would say if the typical private equity associate interview was 50 percent behavioral and 50 percent technical. And then of course, you're like LBO model test and all that mine was probably the first interview is probably 80 percent technical, just like deal walkthroughs and, you know, knowing every kind of meaningful line in each deal. So like being able to walk down the free cash flow for kind of every deal. And if it was a sponsor sell side, for instance, they would want to know the sponsor's thesis and what they identified as risk and et cetera, et cetera, et cetera.

Patrick (CEO of WSO): [00:41:14] Would you have done the deal? Why or why not? And blah? Yep.

FloridaMan: [00:41:18] Yeah, exactly. Exactly. So was prepared for all that and got a lot of good looks and decided to go with kind of a well-known family office in their private equity arm.

Patrick (CEO of WSO): [00:41:32] What was the pay? Was it a pay cut because you were getting paid pretty well by the time you left?

FloridaMan: [00:41:37] Yeah, it was. It wasn't a pay cut on the base. It was a slight bump on the base. And then the bonus was. It was probably about the same when it was all said and done

Patrick (CEO of WSO): [00:41:51] To around 300 all in or a little over three hundred.

FloridaMan: [00:41:55] Yeah, exactly. Yeah.

Patrick (CEO of WSO): [00:41:57] Not bad. Still, only a few years out of school.

FloridaMan: [00:42:00] Remember, it was a big family office.

Patrick (CEO of WSO): [00:42:02] So yeah, so you're kind of making the jump there is there. Did you have other offers from other funds or did you as soon as you got this, you just grabbed it because it was kind

Speaker2: [00:42:11] Of I was nearing getting an offer from kind of to other. What I'll describe as more typical PE firms got a got. This offer from this family office had very limited time to answer. Mm hmm. And that's what a lot of these firms will do. And you kind of they force you to pull the trigger or not. And I decided to do.

Patrick (CEO of WSO): [00:42:36] Do you regret that or do you feel like it worked out for you?

FloridaMan: [00:42:39] No, no, no. I don't regret it all. So I had thought that, you know, and this may be informative for some people. If there's one thing that's informative here that I can, maybe I can add value to it. This and most people think of family office as it's going to be better from a lifestyle perspective, which may actually be true. Like, I didn't have, you know, I wasn't getting churned or anything like that or that. It's like, I've actually heard some of my friends say it's like a really good seat, like you want to be in a family office. And I don't disagree with that. If you're a really senior level or you like the slower atmosphere versus a typical kind of, you know, middle market, private or large private equity fund or something like that, right? The downside to a family office, in my opinion, is that one they're typically going to look at a lot less stuff. They're going to have a really solid thesis. And we were investing on the behalf of very few families. So they were hyper involved and would basically give a gladiator esque thumbs down on a lot of stuff

Patrick (CEO of WSO): [00:43:45] Redoing everything.

FloridaMan: [00:43:47] Yeah, yeah, exactly. And as a junior, you know, you want to get as many reps in as possible because you want to learn as much as possible, whether you want to dig in on one industry and just know it cold. So you want to look at 10 deals a month or something like that. Great. Or maybe you want to look at a ton of different industries, so you have some kind of inch deep experience and everything in different valuation methods and et cetera, et cetera, et cetera. The downside of a family office is you don't really get that very quickly. Things are nixed. And at the end of the day, it's a family making the decision, not your work. And I felt like it kind of marginalized my value add. And that's why I ended up leaving on good terms, by the way, because I express that concern very early on.

Patrick (CEO of WSO): [00:44:35] And you're like, Yeah, that's that was my concern. And it's now realized. So piece by piece.

FloridaMan: [00:44:40] Yeah. Well, you know, family offices are going to invest in secrecy. There are family offices that I actually interviewed, another one that I had no idea existed, and they were investing something like a four billion dollar book in direct private equity with control. And I was like, I never even heard of this. And I had a pretty good, you know, finger on the pulse of the sponsor market and had never even come across the name. And then when I joined this firm, you know, they're never going to give you a full picture on how they invest. It's just in the nature of those family offices. So it was hard to figure out in interviews. And then right when I joined, like, recognize there's a lot of smart people and there's really good infrastructure, but not what I was going for. I was going to steep in my learning curve, not kind of sit back and rest on my laurels.

Patrick (CEO of WSO): [00:45:29] Fair. So you felt like there. There was a little bit too much control at the top, which makes sense. Family office, they're just you're not getting the reps that you want and you still felt yourself. You felt semi junior or mid-level and you wanted those reps. And so you started kind of putting your hat back in the ring. You talk to recruiters again, you go back to the alumni base. How did you kind of make this next jump?

FloridaMan: [00:45:52] Yes. I, you know, went through. Sure. All the previous recruiters I had talked to, you know, a year or so before. Through the process, except for the one that placed me very key and it would be a conflict of interest. But yeah, did kind of the same thing, and I had a very easy story to tell, which was why are you leaving after one year? Well, here's why, and had a lot of good reception from, again, the typical sponsor universe and got an offer that I really liked and joined, I guess, five months ago, six months ago, and have really enjoyed it. It's exactly what I want to join a generalist kind of middle market fund with the idea of I will learn, you know, look at as many deals as possible. Look, a lot of different industries be able to flex capital up or down, so maybe take part in smaller deals that need some kind of operating expertise or repair, if you will, or invest in professionalized businesses and really learn about the best way to put on a capital structure. And we've done that, and I really have learned a lot, so it's exactly what I wanted to sign up for.

Patrick (CEO of WSO): [00:47:06] That's awesome, and it sounds like you got to the place you want to get to. So congrats on that. It's not easy. Yeah, especially coming from a large state school, you defied all the odds. We're kind of top of your class all the way through, so that's awesome. I couldn't have lasted that. I can't believe you did another year. I should build a record, but it sounds like you're in a great group and it sounds like you were involved. And in the bank was actually pretty cognizant of the fact that they were trying to make things a little bit more palatable for you, for the younger folk by that point. Yeah. So I guess before we wrap it up, anything you'd kind of tell your younger self or any advice for the younger listeners out there and kind of the ones in undergrad or kind of the first few years out.

FloridaMan: [00:47:53] You know, all this stuff about, you know, always asked to grab coffee or all that. I agree with all of it, so I don't need to harp on that, I would say. Keep a positive attitude no matter what, and if you can't, then you shouldn't be in whatever seat you're in. Like, if you really can't, it's, you know, impacting your life in a way that. Is negative and don't continue. And then I think the last thing is, and I mean this not in the literal sense, but always be recruiting. I tell like every kid that ABR. And I don't mean always be like going and trying to find another job, but always be ready because you never know when your dream sponsor or dream bank has a position open up and they need someone in eight days. And oh wait, I haven't refreshed on my, you know, three statement modelling or I haven't.

Patrick (CEO of WSO): [00:48:54] I don't know my deal. I know my deal is cold. Yeah, no. It's a great, great advice. I think that's awesome. Yeah. Well, listen, Florida, man,

FloridaMan: [00:49:01] That's my advice.

Patrick (CEO of WSO): [00:49:03] Thank you, sir. Thank you so much for joining us. Really appreciate your time. Yeah.

FloridaMan: [00:49:08] Thanks, Patrick,

Patrick (CEO of WSO): [00:49:09] And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis. And till next time.

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