Private Equity Associate to Portfolio Company Exec
I'm a second year associate at an MF in an emerging market. I was in the deal team that acquired a US-based company (fast-growing services player with ~$500 mm revenue and 10,000+ employees) and over the last two years, have developed a strong rapport with the CEO and CFO while working on strategic initiatives. They recently extended an offer to join as a VP of the company (among the top 40 employees and two levels below CXO). If I join, my role will initially be a generalist role reporting to the CEO and CFO covering strategic projects across functions including Finance, Strategy, and Sales. After a year or so, I will identify my area of specialization and grow within that.
The conventional career path for people in my role is to get a top 5 US MBA and then return to PE in my emerging market. I am planning to forgo a full-time MBA as I am more attuned to practical learning than theoretical, and I consider two years plus $200k+ too significant an investment for the brand and network benefits. Especially since I think I already have two strong brands in the form of my undergrad college and the PE firm I work for. I would rather consider an EMBA (or PT MBA) in the future if my firm is willing to sponsor it, it gives me accelerated career growth, and I can pursue it alongside my job.
Hence, I am leaning towards joining the portfolio company as I will get on-ground business experience, leadership opportunities ahead of my age, a chance to assess whether an operating role is best for me, potentially much better pay (due to stock options), and an improved work-life balance vs. continuing in PE. In addition, I will get a more global experience as I would get to work across US, Asia, and Europe.
The downsides of joining the portfolio company are less diverse work vs. PE and less prestige of firm, which might make it more challenging to transition back to MF private equity if I wish to in the future. I am comfortable with these downsides as I have a strong feeling that I will enjoy being an operator more than a post MBA PE professional.
There are very few precedents for this move both at my fund and other funds in the market. Hence, I wanted to get feedback from WSO members. For those who had similar opportunities in the past (PE to portfolio company), it would be great if you could elaborate on the factors you considered while making the decision, what decision you made, and how it played out. Would also love to hear from anyone currently working in PE on their viewpoint on this decision keeping the context in perspective.
bump
Seen it a handful of times and resulting in a fan of outcomes - some folks accelerated their careers (c suite in 30s) and made a good amount of money, others were sort of isolated in corp dev and didn't get the experience they hoped, and others just had a dissapointing financial outcome / some career stagnation as the company was just a "meh" outcome. The common theme for those who had the best results are 1) they were put underneath a capable CXO who put them under their wing and really mentored them and 2) it was a great investment outcome.
In terms of comp, you can make more if it crushes it, but it's always more risk vs. having carry in a diversified fund. Long term, PE career will usually win on a risk weighted basis. But if you really want to be an operator, I don't think it's a crazy decision. Just introduces more risk to your career. Given your age you have some mitigants as you could still do FT MBA after if you wanted, and you could also find your way back to PE if you could pitch your operating experience as a differentiator successfully. I have seem people do this in MM/UMM.
You didn’t mention the most important information: what’s the offered TC. ? Cash / rsu break-down ?
Start-up rsu is paper money. My friend has got 3M rsu locked in a high-growth company which has been talking about IPO since the 2018 and now still hasn’t IPO yet and will probably never IPO in US. Needless to say those rsu is worth less than my toilet paper
Bump. Looking to get some insight here as well. I am a VP and would be open to interim (~6 months) roles at portco's. My firm has mentioned they are open to more intermittent assignments (few weeks) but nothing as formalized as I'm thinking. I think the operating experience is helpful to become a better investor in the LMM, although maybe I'm kidding myself that 6 months won't do anything.
Bump. curious to hear some other data points / experiences on jumping to PortCo/Corporate post-PE.
I'm actually in a very similar position (currently at a HF with 3-4 total YOE) considering leaving to a high growth tech portco. Much smaller biz but would be coming in as a top 3 employee re: FD equity ownership / title etc. Would love to discuss in more detail as I've been giving this quite a bit of thought and convenient that we have somewhat comparable backgrounds lol. Could you DM me?
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