Ask an Associate working in Private Equity on Wall Street anything

[Hank Scorpio]

I noticed a few of the Analysts at my bank jumping ship after one year. Some of them left our top group to hedge funds, MM PE and one to an internal PE fund. Do you think that would burn bridges or if an opportunity presents itself that I'm happy with do you think it is ok to leave early?

I don't think it burn bridges at all. Management should fully be aware of what the HF's and PE firms are doing. The trend of 1st and 2nd year analysts leaving for better opportunities will continue to happen no matter what. As long as you leave with dignity and class, there shouldn't be much of a problem.

The only issue I see in leaving early is having to give back a portion of your bonus and not getting the 2-year completion bonus as well.

 

[lazyj10]

VC as a sub class to P/E is vastly different at the shop level. A lot of these guys are ex-Tech or entrepreneurs of some sort and therefore understand development stage companies and those with little to no revenue versus what analysts from the street would normally see.

 

[Hank Scorpio]

I've spent time on WSO, Management Consulted, Mergers and Inquisitions, etc. If you have time, what is your opinion on these jobs, the things they do and the lifestyle (hours, travel, prestige, exit opportunities) for them?

IB
PE
VC
Management Consulting
S&T

First off, all 5 financial institutions you've listed are all pretty prestigious. I don't think one would be higher than the other, but if I had to choose--it would probably be a tie between PE and Consulting.

IB: Brutal work hours, tough schedule mixed in with constant deadlines and pressure on the job. You'll get to meet a lot of people if you're lucky and you'll learn a lot during your time in banking. The exit opportunities are there if you're in the right situation.The great thing is that IB will prepare you to go into any of the other financial sectors you've listed. The pay is solid, especially for a 22 year old fresh out of college. Most of your friends will either be unemployed or making $40-50k while you'll constantly be at work making around $110k.

PE: For most bankers, this is the end goal. Some bankers spend their entire careers looking to get into private equity, because it's the "buy-side" The hours can be a little better than banking, but it depends where you work and what you do. The pay is a lot more than IB, but the responsibility is a little higher as well. It's very easy to network and meet many people. Compared to IB, you might get the chance to travel around.

VC: Pretty much very similar to PE, but it's more of a subsidiary under the "umbrella" of PE. These guys look for start-ups with potential and throw in investments to them hoping to realize a capital gain. A lot of travel can be involved. The "freedom" to move around and not so much is there as well. There really are no "rules" or "standardization" in VC.

Management Consulting: Some people believe is this the Crème de la Crème of Finance. What most people don't know is that consulting really isn't finance. It's just a bunch of lawyers who have their JD's and basically tell BB's or other companies how to run their management or given strategies. It's extremely tough to get into, much like PE, especially right out of undergrad. The hours are just like a normal 9-5 job in most cases, and the exit opportunities are plentiful.

S&T: Very similar to IB, but not as prestigious. IB is more glamour, while S&T is more grunt work. The hours are sometimes similar to IB, but you're totally dependent on the market. You have to deal with clients and make sure you meet deadlines and perform extremely well. There are PLENTY of traveling opportunities, because essentially your job is to bring business for the bankers. The pay is also pretty solid across the board.

I know you haven't added this, but I know some people will inquire about it:

Sales: Not everyone is capable of doing this, because not everyone is capable of selling themselves and looking good at the same time. A lot of demanding deadlines and performance metrics to live up to, but the rewards can be great. There is a LOT travel involved, but also plenty of preparation as well. Exit opportunities are solid, but it's tough to get out of sales once you're in it.

__________________________________________________________


I'm going to give Lifestyle it's own section, because it's applicable to all the sectors listed above.

The lifestyle of working in finance is really whatever you make it out to be. You don't have to pop models and bottles every other night and come home with a dime piece. Or waste $200 on a tie every week and spend all your money on alcohol and chase the party scene. Should you live a little? Absolutely, but not at the expense of your savings. The lifestyle can get out of hand, and I've personally seen it up close. I've seen some co-workers blow all their money on parties, women and drugs. You just need to be smart with how far and fast you want to go.

 

[lazyj10]

The odds of going to a VC out of school shy of Stanford or a university with a incubator styled program are slim.

 

[ozarkshark]

I PMed u hank! Love reading this thread great motivation. Any one got opinions on St. John's finance department? The junior college I attend now just signed an agreement that grants me 40%discount on tuition of I transfer to st John For my bachelors

Thanks!

 

[Hank Scorpio]

When you were in school, did you ever feel like you were wasting your time? I don't know if it is a result of me taking mainly prerequisites and entry-level business classes but I find it extremely difficult to go to class. Last year I never went to class and always just studied on my own time, got As and instead used my time to go to organizations, network, pursue other interests and enjoy myself.

This year I haven't cut a class but every day I dread going in because I know I can learn much better on my own time and because of how dry the material is. I don't hate work, but I hate spending hours in the classroom learning concepts that would only take me 10-15 minutes a day to learn by myself.

Also, what's are possible paths to VC or Management Consulting after undergrad? Especially for VC, I rarely hear about undergrads going directly into it but I would assume having experience starting/running a company would be helpful?

I know how you feel, dude. I kind of was the same way back in undergrad. I wouldn't be "bored" while in class, but I felt like I could do more with my time than just sit in a class that doesn't help me learn the material any better. This didn't apply to all the classes I took, but it did apply to a few.

My advice to you would be to just do what you'd do at home, but sitting in your seat during class. Sometimes showing up and showing your face in a class really goes a long way. Another thing I'd do would be to just read up on material for my next class. If the professor thought I wasn't paying attention or dicking around--I would simply go up to them after class and ask a question regarding the topic they covered for the day or I would make an appointment to speak with them during their office hours and ask them a question about something from the reading. Most of the time, I knew the answers anyway, but I wanted to show them that I was still engaged and doing my part as the student. You'd be surprised how effectively well this works with most professors

The odds of going to a VC out of school shy of Stanford or a university with a incubator styled program are slim.

co-sign

Getting into VC straight out of undergrad is almost as hard as getting into PE out of college. Unless you have some serious connections, it'll be almost impossible. Going to Stanford or the Ivy's helps a little too.

I PMed u hank! Love reading this thread great motivation. Any one got opinions on St. John's finance department? The junior college I attend now just signed an agreement that grants me 40%discount on tuition of I transfer to st John For my bachelors

Thanks!

I sent you a reply.

I know some people who went to St. Johns. Only one person I know went into finance out of that school and she's doing operations for Credit Suisse. I mean, there are some alumni who are in finance who came out of St. Johns, but it's not really known to be a feeder school for Wall Street. From what I know, it's more of a school for pharmacy.

 

[heatpinoyboy]

How does one even fathom getting into the finance world...was it through internships? Major (I know you stated that you were not even a finance major, but does it even help?)


*undergrand here

 

[Hank Scorpio]

How does one even fathom getting into the finance world...was it through internships? Major (I know you stated that you were not even a finance major, but does it even help?)


*undergrand here

I was always interested in business and got more interested in finance during my junior/senior year of High School. During undergrad, I wanted to get into bio-medical engineering because it interested me more and I knew I could do a lot with that degree.

Honestly, people that end up majoring in finance has some sort of idea what it is and interest.

 

[d d t]

How does one even fathom getting into the finance world...was it through internships? Major (I know you stated that you were not even a finance major, but does it even help?)


*undergrand here

You know, honestly I believe my interest stems from just being raised in a family that was always in the business world.

 

[Hank Scorpio]

You know, honestly I believe my interest stems from just being raised in a family that was always in the business world.

I know a lot of people who aren't in business that come from families who are involved in businesses/finance

 

[broakimnoah]

 

[d d t]

I know a lot of people who aren't in business that come from families who are involved in businesses/finance

Understood.

I believe it really depends on the individual because most of my extended family aren't into business/finance with the exception of a couple of us.

Also, I just want to throw this out there for those people thinking that they need some sort of educational background to grow and run a successful business, you don't. There are lots of examples of college dropouts who are successful in the business world.

So, if any of you guys have a solid idea and want to follow your passion, i say go for it. Give it 100%, tune out all the noise around you, and good things will happen.

 

[Hank Scorpio]

Any tips for a high school senior? I've a 3.30 GPA, pretty much average student overall. I'd like to have a future in finance/banking on Wall Street, but that's pretty much impossible, considering I live in VA.

How is it impossible? You're just in High School my man.

What kind of colleges are you applying to? What extra curriculars are you involved in? What have you done for the community around you?

Why do you want to get into finance/banking? What is it about finance/banking that makes you want to do that other than something else?

U of V is a GREAT school and a MAJOR feeder school for Wall Street. So is Georgetown University.

Understood.

I believe it really depends on the individual because most of my extended family aren't into business/finance with the exception of a couple of us.

Also, I just want to throw this out there for those people thinking that they need some sort of educational background to grow and run a successful business, you don't. There are lots of examples of college dropouts who are successful in the business world.

So, if any of you guys have a solid idea and want to follow your passion, i say go for it. Give it 100%, tune out all the noise around you, and good things will happen.

Unless you want to get into banking/finance--you NEED an education.

In terms of running your own private business--it doesn't matter.

 

[d d t]

How is it impossible? You're just in High School my man.

What kind of colleges are you applying to? What extra curriculars are you involved in? What have you done for the community around you?

Why do you want to get into finance/banking? What is it about finance/banking that makes you want to do that other than something else?

U of V is a GREAT school and a MAJOR feeder school for Wall Street. So is Georgetown University.
Unless you want to get into banking/finance--you NEED an education.

In terms of running your own private business--it doesn't matter.

Agreed, you need an education if that's what you want to do for a career.

 

[bhzmafia14]

Hank, I really appreciate the insight you've been giving.

I've recently been recruited for MSSB's Associate Program and also their Financial Advisor Assoicate Program. Do you know of any one currently participating or particpated in either of these programs?

 

[serotonins]

Why is coke so popular

 

[nocomment6]

Why is coke so popular

With the hours people work at IB, I don't find it much of a surprise.

 

[d d t]

With the hours people work at IB, I don't find it much of a surprise.

Lol

 

[Hank Scorpio]

Hank, I really appreciate the insight you've been giving.

I've recently been recruited for MSSB's Associate Program and also their Financial Advisor Assoicate Program. Do you know of any one currently participating or particpated in either of these programs?

I knew someone who worked in MS financial advisor program many many years ago. He makes a decent living, but it's not as glamorous as it may seem. It's a "kill what you eat" type of mentality. You can live great doing that job, but you're going to have out perform than the next guy.

I know some brokers in independent shops with better pay-out options than people who are financial advisors working for BB's.

Why is coke so popular

It's part of the "culture" in finance. Well, I should say it's part of the "culture" in banking. I don't do coke and never have touched that stuff before.

With the hours people work at IB, I don't find it much of a surprise.

This is probably one reason why too.

 

[d d t]

Never knew coke was such a big thing in the financial world, with the amount of brain cells one loses, I can't imagine people lasting very long in the field as a chronic coke user....

 

[Hank Scorpio]

Stupid question, but what's the difference between Sales and S&T? That was from last page.

S&T (Sales and Trading) deals primarily with stocks and equities. Exchange of these "securities" is involved.

Sales is more in line with marketing and developing relationships through financial services with clients. It's similar to S&T, but not so much with the equities.

 

[Hank Scorpio]

Thread fell a few pages. Giving it a bump.

 

[friscostylez]

Are you ever going to go back to get your MBA? How often do people go back to school after working in IBD, PE, HF, etc?

 

[Hank Scorpio]

Are you ever going to go back to get your MBA? How often do people go back to school after working in IBD, PE, HF, etc?

I honestly don't know at this point. It really all depends on what happens within the next few years.

Usually 85% of people go back to school after IB. The reason for this is because, 90% of the analyst class gets let go after their 2 year contracts expire. They usually go to school to get their MBA's and try to get an associate position afterwards. The 10% that manage to get invited for the 3rd year usually end up getting a direct promotion to Associate.

As for PE and Hedge Funds--it really all depends. They're more inclined to "grow" their own and "groom" them for higher positions than most BB's. This is mainly the reason why I may not go back for my MBA, especially since I already have a CFA.

 

[ozarkshark]

what books you guys recommend on enlightening me the most on finance and banking