Recruited for a PE firm right out of college and have been working there for a year. I learned when I started that the investment period for the most recent fund ended. Our new fund just had its first close (fundraising) a few weeks ago.
The past year, I've worked on dispositions, ad-hoc analyses, and strategic recommendations regarding our existing investments. In addition, I've worked on a co-investment and a bankruptcy deal that never went past LOI. Overall, I feel like I did learn a lot but I got sold a total pipe dream as I've actually completed 0 deals. Without going into too much detail, this new fund is a "boring" fund with little applicability to what I want to do long-term and I do not want to work on it. Most entry-level job descriptions for investment firms and typical PE shops that I see online stress deal flow and transaction experience.
To say the least, I've started recruiting and will hopefully leave ASAP.
Am I at a complete disadvantage? How upfront should I be when deal flow is mentioned - how do I even phrase the fact that I've essentially worked on 0 acquisitions? Should I stick around a few more months and get a few "boring" deals under my belt just so I can say I worked on them? Is there a better way to "craft my story"? Is it too late to do banking just for the exit opportunities (I am 25)?
I'm serious about my career, I'm passionate about investing, and I can't help but feel miserable about my decision to work here.
Thank you in advance.
PS: My VP and MD mentioned to me "you and the last analyst complained about the deals, but that stuff is not important, you're getting valuable experience here" - I hope they're right, but it's not like they'd say otherwise.
Interested as well
PE investing is about 3 things: 1-Finding, analyzing and acquiring companies 2-Harnessing value thorough ownership period 3-Realize investment by selling
If you are only interested about doing deals, but not about 2 and 3, private equity investing probably isn't for you. I would suggest you look into banking. I'm sorry to say, but overall it's a slow pace environment where even at the busiest of funds, you will never close multiples deals every year and it will be hard to be an effective investor if you don't care about your portfolio companies.
You should be upfront that you have no true closed deal experience, but I'd emphasize the partial deals you've worked on as well as the experience you've gotten in working with the portcos, sourcing, etc basically all of the other things you have been doing. It's likely you'll have to take a bit of a discount on your time in the sense that doing no deals doesn't really let you move up the hierarchy. For example, if an Associate did no deals during his/her 2-3 year stint and wanted to go to a comparable if not smaller shop, I wouldn't expect the firm to hire that person in as a Senior Associate. It's likely they would have to spend another year or two before being able to move up. I'd apply the same principle to your experience. If I were you I'd either go back to banking for two years and go the traditional path or find another PE firm, try and join at the analyst 1 level and hope to gain more fundamental deal sourcing/execution skills.
With that being said, there's a reason people advise against going into PE straight out of undergrad. PE deals can move slow and you can go years without doing a deal. If you're at a smaller shop that tends to be less of the case, but at the same time, most small shops shouldn't really hire analysts anyways. As an analyst with no banking experience, you're really not that valuable to the firm unless you're sourcing.
Lastly, I'd think about what @mtnmmnn said. He's 100% right. Once you spend a few years in PE, the job shifts from pure execution to much more on the sourcing, value creation, and selling side of things. I'm sure as an analyst that's tough to see, especially with such a focus on execution as the junior level, but it's something to keep in mind. At big firms people can go years without doing deals. If you're looking for a fast paced, multi deal per year type of environment, banking is probably a better bet. Or it's at least a good bet to gain some deal reps, to mature a little bit, and to figure out if PE is something you really want to do.
Don’t necessarily agree with that
If you have gone pretty far in a process with full diligence streams (CDD, FDD, legal, tax, financing) on a few deals, that goes a long way. Would say you could be potentially better off getting close to the finish line with 5 deals that didn’t close vs only worked on one closed deals during same time period.
As an junior, you don’t have control of how far a deal goes, and people recognize that.
This business is all about deal reps. You’re fine as long as you’re getting valuable experience.
That said, not great if you’re only running 1-page LBOs on a CIM P&L
Like the others said finding deals that are worth jumping on is really tough, especially in the current environment where you have idiots running around paying ridiculous multiples for companies to the point where it would be really tough to justify on your end as a professional investor. I wouldn't hold it against the firm for failing to find a deal within such a short period of time...especially if their focus is on an older more traditional area.
Also it's really easy for distressed/bk deals to slip away as the underlying asset can completely change in a very very short period of time... Just pointing that out since you brought up a bk situation.
We put some serious work into building out our engine for deal flow and even then only did 1 acquisition of a distressed business that was owned by my partners former partner and we had another deal fall apart last minute...
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