Over the course of the last year, I made the transition from investment banking to private equity. While I was generally well informed and knowledgeable about the role and what it entailed, I was certainly surprised by the nuance of the role, the difference in approach, and the responsibility I was tasked with. I think it’s easy to get lost in the generic picture painted by recruiters, job descriptions, and your interviewers, however, I think it is important to consider a few structural differences in the role that will define your experience on the buyside.
Firstly, I was pretty astounded by the change of hierarchy. Don’t get me wrong, you are not pals with your MDs and Principals, however, everyone here is a lot more invested in you, your career progression, and the work you do and it certainly shows. In my time in private equity, I have had the privilege of meeting several MDs and Principals but also getting to know each of them on a personal level. In banking, I don’t feel like this was possible at my old firm. The hierarchy was certainly rigid and most of the MDs didn’t know or care about my name, they just wanted my work output. In the beginning, it was almost uncomfortable being friendly with senior members of the team just given how distant the roles were in my previous job. This is a positive of the job and makes working long hours on tough projects bearable, since you actually have a relationship with the rest of your deal team beyond just work. I think this makes a world of difference when it comes to intrinsic motivation in a difficult role. In my experience, while there is not a “flat” hierarchy per se, you definitely don’t feel like you are a cog in the machine, which makes the experience and the day-to-day more fulfilling.
Secondly, I have to mention that the work itself is a fundamentally different ballgame. Immediately, your work has far more consequences than it does in banking. Everything I have worked on in the private equity space has a purpose and always has a consequence. Your deal teams are often way smaller and people above you operate under the assumption that you aren’t making mistakes on basic items – that is to say that you get a lot more responsibility right off the bat without the several levels of guardrails you get in banking. Yes, your VP will still look over your work, but they already assume the underlying framework is correct; it should be. This makes transactions easier in my opinion because you can manage yourself, but note that the deal team is very reliant on the work that you do and everything you contribute at the junior level has magnitudes of consequences at the various levels above you. When considering a deal, the senior deal team will already have an opinion on the asset but your work at the junior level either confirms or denies that opinion. In my opinion, this has translated into more autonomy and makes the work more interesting since I get to express my curiosity more in the day to day. This job is less about MDs marketing efforts and more about reality and results.
To hammer down on the above point, another thing that surprised me was how often senior team members asked me for my opinion on a deal. Quite literally for every deal I have been staffed on, at some point someone senior always asks what I think about the business we are looking at. This is important because it makes you stay sharp, use your brain, and actually craft an opinion on the business, which is what most of us joined this industry to do (hopefully). Many of my opinions that were expressed early on meant that certain diligence items were done according to my line of reasoning. In my opinion, it is tough to get this experience and input in any other role at this point in my career. Is it like I am making the investment decision purely by myself? No – but I can actively contribute and influence some aspect of the deal, which was certainly not my experience in banking.
I think a major difference that I knew was going to have an immediate impact on my experience was the sheer number of resources available to me that I did not have in banking. In banking, you spend a lot of time searching for answers that can easily be found with the right materials and resources but you were never going to get these resources. In private equity, you are equipped with the insight of third-party research, consultants, and institutional knowledge among other items. If you want to find the answer to a question, you can easily do so with some targeted digging. However, this always means that your output should exhibit higher-level thinking because of your access to these resources, which is a departure from the “we stumbled to this figure” approach of banking.
Finally, my new role in private equity has far more predictability than my banking role. This is a major positive in terms of balancing my lifestyle goals with a rigorous job. I don’t mind working hard but in my experience with banking, this could often come at unforeseen times and disrupt plans which always makes the job harder to deal with – you always have to feel “on”. In private equity, yes, during deals and transactions you will be working hard, likely harder than you did in banking, however, 9 times out of 10, you will see this coming and can adjust your lifestyle and approach accordingly. This is enormously valuable in terms of retaining your sanity while working in finance!
So while yes, I have to work and think harder in this role, I am able to manage the role better and enjoy myself while working, and for me, that is all you can ask for.