Much has been written about the hours of work in the private equity industry, where the money may be good but the lifestyle can be all too similar to investment banking — especially for employees who have just left the bank in hopes of something better.
Juniors of some private equity firms (Apollo Global Management) were spied on when they complained about 20-hour days. Others say regular 2 a.m. stints are standard. Working after midnight is common in private equity, says Brett Caughran, a former banking analyst, private equity expert and hedge fund portfolio manager who wants to convince people to work for hedge funds instead.
But how bad is private equity really? Business Insider spoke to an anonymous 27-year-old who joined a London private equity firm as an associate last year after leaving an investment banking boutique. He says working in private equity is better than working in banking, but not significantly.
He now makes around $185,000 a year, which is the average total pay (salary plus bonus) for a first-year analyst at an investment bank in New York City (London pays less). In banking, he says, he worked weekdays from 10 a.m. to 1 or 2 a.m., plus weekends. In Private Equity, he says he works 9:30 am to 10:00 pm and has 60% of his weekends off.
Even better, he says that as a private equity banker, you have more control over what happens and when. “If a private equity rep wants to schedule a call at 11pm, the bankers have to take the call. But a banker couldn’t schedule a call with a private equity rep at 11pm if the private equity rep didn’t want to.” PE guys have the upper hand. They also have fewer back-to-back conference calls than bankers.
Those are the benefits. The downside stems from the fact that private equity firms hire ex-junior bankers for one reason: to work on financial models. So you can still expect to do a lot of modeling while dealing with the stress of working in a small team and investing billions of dollars in an environment where error is not tolerated. “They’re still financial people, so no one really cares how many dogs you have or how mental your health is,” he concludes.
Regardless, vultures are circling around jobs in investment banking, and the trickle of layoffs at Goldman Sachs is turning to a trickle of layoffs elsewhere as well. Financial News reports that HSBC is the latest to shed some bankers, with cuts in London ranging from VP to MD levels. The job cuts at Goldman in London are said to be taking a toll at staff levels and above – suggesting that banks everywhere are keeping junior staff locally despite their salaries being so much higher now than before.
In the meantime…
It’s no longer a workers’ market on Wall Street. “IIt was this really unusual situation where companies were in hiring mode and wouldn’t let anyone go.” (Blümberg)
Credit Suisse is “categorically” not leave the US market. (Bloomberg)
Deutsche Bank’s CFO says earnings are at the higher end of guidance thanks to strong fixed income Trade and continued momentum in private and corporate banking. (Blumberg)
Newly released court documents state that Goldman Sachs “tolerates managers who engage in gender stereotypes, sexual harassment and/or gender bias.” Goldman Sachs insists that “discrimination, harassment and abuse in any form is unacceptable.” (New York Post)
Wells Fargo hired a new head of UK M&A in Mark Hutt, who once worked for Lehman. (financial news)
European companies want to buy British assets. “There is a massive ownership shift taking place as UK plc’s traditional owners sell off to corporates, sovereign wealth funds and private equity who can benefit from the mispricing of UK equities.” (Financial Times)
It’s been a good year for Crispin Odey, whose main fund has run out 145% in 2022 after shorting long dated UK bonds. (Reuters)
Beware of the “Super All Hands” company’s offsite meetings, which include county fairs, astronauts, and mandatory holidays with co-workers. (WSJ)
Click here to create a profile on eFinancialCareers. Make yourself visible to recruiters hiring for private equity firms so you can get off work before midnight.
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