You’ve received a buyside job offer – congrats! It may feel like the hard work is done, but choosing which offer to accept is arguably one of the most important parts of the overall recruiting process. Far too often we see candidates jumping at accepting their first offer, a strategy which they often ultimately regret in the future. It’s extremely valuable to be intentional about all of your career decisions, so make sure that you know your worth and only accept an offer if it’s the right next step toward achieving your long-term goals.
Picking an Offer – First PE Job
If you have just finished your investment banking analyst stint and are moving into your first job on the buyside, brand name and size are still valuable considerations to take into account. The general rule of thumb is that it is always easier to “move downward” rather than to “move upward” in the private equity ecosystem. This means that if you start off at a Megafund and decide after a few years that this path is not for you, you will have a much easier time moving to a middle market fund than in the opposite scenario. “Brand name” has a similar effect. I normally would not advocate branding or prestige as a top consideration, but if you are early on in your career, powerful brands on your resume can be very helpful in terms of future career moves.
Other considerations to take into account with considering roles include sector, strategy, and geography. Just like banking – some sectors within PE will “pigeonhole” you more than others. Unless you have significant conviction around how you want to specialize in the future, it’s often better to pick a more versatile / generalist sector earlier on in your career. This allows you to be exploratory and opportunistic without getting tied down too soon. This doesn’t mean you have to join a generalist team, but rather means consider your long-term goals before joining a specialized sector team such as FIG, oil & gas, or real estate. Sector teams like tech, consumer & retail, or business services tend to be more broad and versatile long-term. The same advice applies to strategy and geography. Specialized strategies such as turnaround / opportunistic tend to be harder to move away from than traditional buyout. Niche geographies will also be harder to transition away from that “finance-heavy” cities such as NYC or London.
Picking an Offer – If you Plan to Get an MBA
If your long-term career goals include applying for an MBA, along with the considerations listed above it is helpful to check whether your future employer has a track-record of sending associates to your target MBA programs. It is extremely helpful to join a firm that supports the MBA trajectory, as you will be better positioned to get strong recommendations from your bosses as well as have an alumni network of ex-employees you can reach out to for application advice.
Other considerations to take into account if you plan to get an MBA is finding a way to differentiate yourself early-on. Top MBA programs have a number of candidates with similar profiles applying from private equity, so given the competition it’s great to have a special “angle” to focus on during your career which will help you stand out against other applicants. Think of the story you want to tell in your application early on, and insure that the role you take aligns with your overall narrative and can best position you to get into your dream school. In this case – specializing within a sector can often be helpful as it can serve as a differentiating factor, and you can always pivot industries post-MBA if you choose to.
Picking an Offer – Second + PE Job
If you are already working in private equity and have received an offer to join a new firm, your considerations when evaluating this role may be slightly different. Joining a firm as a Senior Associate or VP is generally a longer-term career move than joining a PE firm as an associate. This means that “branding” and “prestige” should take a backseat to factors such as upward mobility and fund performance. Make sure that the firm is not too “cluttered” at the level you are looking to join at, to ensure promotion ability and long-term upward mobility. You will also want to think about specialization at this level – is there a sub-sector within the firm that is not currently being covered which you may be interested in taking over? Make sure you look into the firm’s historical fund sizes (has fundraising been successful?) and return profiles. Given a part of your compensation with likely be carried interest, performance should be a higher priority than perceived branding. Often times – these two factors will not be as closely correlated as you would think!
Lastly, culture is always in important factor when making a career decision – but it’s even more important when your next move may be a longer-term one. Make sure you do diligence on your future colleagues by not only speaking to individuals currently at the firm, but also reaching out to those who may have recently left the firm. This is a very helpful way to insure you have a non-biased view on the culture.
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