GoVols Wrote: ------------------------------------------------------- > “However, it’s difficult to see myself becoming a > senior PE investment professional because of the > relationship side of it” > > VOBA, > > What do you mean by this statement? It seems like > no matter what career path one would chose in > finance, building relationship, networking, etc., > would be the main requirement for assuming more > senior roles. Whether its IB, PE, ER, or any > finance related role that people on this forum are > interested in, isn’t building relationships or > developing a book of business the primary > prerequisite for moving up in the industry. If one > wanted to become a senior banker or an executive > at a PE firm, isn’t having relationships with > potential clients and industry contacts gained > through experience the main requirement? Even if > someone’s goal was to become a PM on the buyside, > wouldn’t he or she at least be somewhat > responsible for bringing in new money rather than > strictly managing portfolios? > > For those who are more introverted, I can see how > managing the relationship side of things would be > a challenge. This is how I am. But it just seems > like this is a requirement for moving up in the > industry. I actually don’t think I’m introverted (I think numi could attest to that), or that I don’t plan on developing contacts and networking in my career. In fact, doing just that helped me to get where I’m at today. And, in any investment business you have to manage the relationships of your investors, e.g. building and keeping a book of business. But this is a separate thing from bringing in proprietary deal flow. To do that in PE, you’re essentially pitting your relationships against those of all the ex-deal makers, management teams and other experienced PE professionals. I just don’t know if I’d like this aspect to be a major part of my value add when I’m a more senior professional. I also have an aversion for all things political in the business world, which is why I didn’t thrive in a large organization and I’ve really enjoyed my small PE shop.
buddha Wrote: ------------------------------------------------------- > above two posts are interesting. > > one more general question, how long is the > duration of doing the reserach and actaully > closing a deal? > > I would almost be afraid that I would get > frustrated and lose motivation or interest, where > as in my current situation if I get frustrated > with a name I just shelf it and move on. This depends, it can be longer/shorter depending on what type of process is being run. We’ve worked on one deal for over 3 years, with 2 early rounds of financing and the final equity raise is still pending. Another example was a deal we closed after about 2 years. But these were both start-up or similar type of situations and very proprietary, e.g. it wasn’t a banker-led sale process of a public company. We haven’t done anything shorter than a couple months, but we don’t have a lot of manpower.
I definitely agree that there is a big difference in playing politics vs. building a network. I don’t have any experience in PE, which I why I asked that question. What you said makes sense.
rohufish Wrote: ------------------------------------------------------- > you’d have zero credibility in an operating role > if all you have is investing experience. > > yes, perhaps if you’re restructuring a business > the temporary leadership role may be a fit, but > for a long term senior executive, a pvt equity mgr > is almost never a good fit. > > i’ve been on both sides - investing and operating. > and i can tell you, the stuff you guys say is ‘not > fun’ i.e. the relationships, processes, execution, > is what matters on the operating side. any smart > guy can tell you a ‘smart strategy’ - ideas and > strategies are cheap. execution is the real > challenge. and thats where analyst types totally > get creamed by some dude who’s been in the > business, knows what buttons to press. > > an operating environment is about motivating > people to do things they don’t necessarily want > to, or care to do. unless you’ve been a senior > deal maker / rainmaker, and can show > sales/relationship skills, PE experience doesn’t > really prepare you well. usually there are only a > handful of people in the company (corp dev, > alliances, strategy, etc) who even need PE taught > skills. sales or operations skills are so much > more important. > > if you want to be a general manager, BU head, CEO > - go suffer in the trenches for a few years - > anything else is a short cut, and you will lack > the experience/maturity to deal with org politics. > as soon as your mentor leaves, you’ll be shunted > out. I completely agree with everything said here. In fact, our fund is predicated on exactly this idea since our principals are former operators instead of “rain-makers”. However, if it’s a financial services company, the rules can be a little different. Consulting would be an easier transition to management than PE, but even then they still need to establish credibility and a track record of management success before they’re given the keys to the kingdom.
VOBA Wrote: ------------------------------------------------------- > I actually don’t think I’m introverted (I think > numi could attest to that), or that I don’t plan > on developing contacts and networking in my > career. In fact, doing just that helped me to get > where I’m at today. And, in any investment > business you have to manage the relationships of > your investors, e.g. building and keeping a book > of business. But this is a separate thing from > bringing in proprietary deal flow. To do that in > PE, you’re essentially pitting your relationships > against those of all the ex-deal makers, > management teams and other experienced PE > professionals. I just don’t know if I’d like this > aspect to be a major part of my value add when I’m > a more senior professional. I also have an > aversion for all things political in the business > world, which is why I didn’t thrive in a large > organization and I’ve really enjoyed my small PE > shop. I can’t say I’m too keen on business politics either, but I guess they’re everywhere and largely inevitable, as long as you’re in any relationship-driven business. For me, I’ve decided to build my career at larger firms because I like the organized training, networking opportunities, and recognition that comes with working at a firm that is well-known. Down the line though, I’ll probably want to have more autonomy, but I’ll need to develop the network and contacts first (which is what I foresee myself doing for at least the next half dozen years). Maybe further down the line, VOBA and I can start our own PE fund.
I have an public accounting background as my moniker indicates but have sense moved to a risk management role. Lots of exposure to a bunch of groups which led to HY research. However, I have stumbled into a restructuring opportunity with a lesser recognized company which would offer some deal experience (certainly not PE or IB but still). It’s better money and may actually offer some security from the mess the banks are in. Not sure how to compare the two. Long-term I think I would like to do investment management but I figure either way could end up in distressed or HY.
ER = someone who critiques music Company manager = music maker PE = somewhere in between… Having made the switch to buy-side ER, this is what bothers me all the time - we critique music, not make music. We have no control once we have rolled the dice (other than unwinding our position). Of late, I cannot but not get over the thought that ER is overrated. And please don’t give that crap about us being the invisible hand that allocates scarce capital efficiently. As such, I have been lately obsessing about PE.