The Benefits Of Working With A Private Equity Firm In Chicago

When most people envision the most coveted professional roles, they often think of either the East Coast or the West Coast. Naturally, this makes sense, it’s what American culture pushes – pretty much every film has the protagonist wanting to make it big in the “Big Apple”. I get it – I grew up in rural America – there is an allure to the big cities – hanging out with absolute Chads like Partick Bateman (kidding, of course), or maybe partying with movie stars in Hollywood – maybe if I was lucky, I’d run into that Litquidity guy in the wild. But there is one hidden gem between the coasts that a lot of individuals tend to overlook when exploring the buyside: Chicago. The Windy City is home to some of the worst pizza (hot take, I know) and best financial firms in the country. Let’s explore why working in Chicago may be the best next move for your career in finance.

• That Sweet, Sweet Cash – “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for” – Robert Kiyosaki. This is probably the biggest mistake that I made while looking for locations while going through recruiting – I basically just thought of gross pay and didn’t think of much else. Trust me, while that paycheck might be a little smaller in The Windy City – that green will be a lot more fruitful compared to the East or West Coast. As someone who used to pay $3,500 per month in rent in The Big Apple, and now pays $3,700 in Hollywood, I can tell you that the extra pay you get isn’t enough to offset the fact that you will be spending more compared to Chicago. Simply put – your gross income might be lower in Chicago, but I have a feeling your NET income will be quite a bit higher. 

• Great Healthcare and Industrial Presence – Pop Quiz! What are some of the best industries for private equity? Which sectors tend to have a lot of companies with stable cash flows and mature operating states. The answer? Healthcare (particularly healthcare services) and Industrials, and wouldn’t you know, those are exactly the two industries most prevalent in Chicago. A lot of the companies in Chicago are born to be bought out by Financial Sponsors. If you are ever worried about your firm not having ideal targets – worry not if you are headed to Chicago, as this is not an issue here.

• Middle Market Experience with Megafund Quality – Yes, your deals in middle market private equity might not ever make the front page of The Wall Street Journal, but do not let this prevent you from pursuing private equity in Chicago. When we think of the middle market (and trust me, I worked at a bank that did a lot of middle market deals) – sometimes we think of companies that barely function on their own and are run by 2-3 people that bit off a little more than they could chew. Could this be a consistent issue in markets like Atlanta, Cincinnati, Charlotte? Of course, but not in Chicago. The companies and private equity firms have the same level of sophistication as New York City, San Francisco, and Los Angeles, albeit on a smaller scale. GTCR, Thoma Bravo, Madison Dearborn, Ares Management, Sterling Partners, WP Global – these world-class firms all have a strong presence throughout the city, and can be great feeder pipelines to HBS, SGB, and Wharton – I’ve seen it myself. You just can’t go wrong. 

• More Emphasis on Lifestyle – Let me be very, very clear, you are going to get worked hard in private equity, especially on the junior level, but at large-cap NYC funds, it will probably be worse than your junior years in investment banking. However, on the middle market side in Chicago, you won’t work you to the bone or set the same expectations that NYC “high finance” has. This is not to say that candidates, firms or team members are of lower quality, far from it, but rather the culture of the city itself encourages working within reason, regardless of the career.  

• A Smaller, More Tight-Knit Network – In NYC, you can’t throw a pebble without hitting a Patrick Bateman wannabe, there are an endless supply of hard-working finance professionals all throughout the city. Chicago offers a great balance for two reasons:

1. 1. 1. There are Less Firms to Compete Against for Mandates: In NYC, you will often find yourself competing with well over a dozen firms for mandates, creating more work for you and driving up that precious entry multiple across your deals. This will not be the case in Chicago, you will be of course competing with some of those world-class firms that I outlined earlier, but not to the same level as you would in the overcrowded NYC market (which is especially prevalent on the middle market side), making life easier for you. 
      2. You Will Be Able to Explore More Firms in a Shorter Amount of Time: There is nothing more disheartening than finishing your grueling day of banking than having to then start networking at 9PM (if you are lucky enough to find people who are willing to accept calls at this time). In NYC, you can spend an entire lifetime trying to speak with all the firms in town – but in Chicago, you can easily get a better feel for each firm and their respective investment strategies and teams in a much shorter time frame – easing the burden of recruiting quite a bit. 

While Chicago might not be able to hold as much global fame compared to its peers on the East and West Coast, this doesn’t mean that it lacks in opportunity, rather it can be the best steppingstone to springboard you into the buyside role or MBA program of your dreams. Best of luck! And remember, be sure to cast a net that is broad and wide, and there is nothing that you won’t be able to accomplish, especially with the wonderful resources found at Office Hours!