What Is Private Equity: Corp Dev/Strategy vs. PE

After two grueling years in both investment banking and consulting, I was given the opportunity to transition to either F100 corporate development/strategy or private equity. Naturally, most would assume the private equity offer would be the way to go – but I decided to take a chance and shift to the corporate lifestyle for greener pastures. Although I consider this choice to be the greatest decision of my professional life, I ultimately believe that there are unique pros and cons to going down the more “traditional” high finance route compared to that of corporate, and I will describe them below:

• You Are Going to Take a Compensation Hit on the Corporate Side; Accept It – The only high finance professionals I know who voluntarily switched to the corporate side and are quite discontent are those who had unrealistic expectations in terms of their compensation. In my opinion, you should never negotiate for less than your analyst base salary in IB, but also consider the portion of stock-based compensation you will be asking for. Obviously, unless you are at a well-known, mature Fortune 100 with consistent, stable stock price performance, the greater the stock-based compensation, the more variable your overall pay will be. Granted, even in the best years for your company’s stock, you likely won’t be making as much as your pals in PE, but this decision/negotiation still remains an important factor to consider.

• Your Job is More Stable than in PE – Although PE (especially at the larger funds) may not be as volatile as investment banking when it comes to dismissals and bonus compensation, you will still see bigger variables in your pay and promotion path compared to a corporate role; likewise, in corporate, you are often given the option to “reside” at a certain level of seniority where you feel comfortable, rather than be forced into an “up or out” structure that you might be in investment banking, consulting or private equity.

• You Will Actually Have a Consistent Life Outside of Work – This is the most noticeable and straightforward difference; corporate jobs won’t work you to the bone or set the same expectations that “high finance” or consulting will – and I think this becomes increasingly more noticeable overtime. Sure, when you’re young you can power through the late nights, but as you age, it becomes more and more of a burden, and you find yourself making greater and greater sacrifices – and perhaps this is why most people don’t make the corporate jump until their 30s.

Best of luck! I believe that choosing to go corporate vs. PE is really based on your values rather than your skills or abilities. If you have been able to land a role in front-office IB, you are more than capable of working either role, instead it will be determined by if you want to prioritize your work-life balance or increase your compensation as quickly as possible. You really can’t go wrong with either, but keep in mind that “hopping back” to the buyside after switching to corporate is a difficult task, so make sure you’re ready to commit to the jump once you make it.

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