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Backstory

Over the last year, I made the transition from investment banking to private equity.

While I had a good understanding of the role and its requirements, I was definitely surprised by the nuances, the shift in approach, and the level of responsibility I was given.

I think it’s easy to get lost in the generic picture painted by recruiters, job descriptions, and your interviewers, however, I think it is important to consider a few structural differences in the role that will define your experience on the buyside.

#1: The Change of Hierarchy

Don’t get me wrong, you are not pals with your MDs and Principals, however, everyone here is a lot more invested in you, your career progression, and the work you do.

In my time in private equity, I have had the privilege of not only meeting several MDs and Principals but also getting to know each of them on a personal level.

In banking, I didn’t feel like this was possible. The hierarchy was certainly rigid and most of the MDs didn’t know or care about my name, they just wanted my work output. In the beginning, it was almost uncomfortable being friendly with senior members of the team just given how distant the roles were in my previous job.

I felt like a commoditized number-cruncher in banking versus a valued team member in private equity. This change was welcomed and makes working long hours on tough projects bearable since you actually have a relationship with the rest of your deal team beyond just work. I think this makes a world of difference when it comes to intrinsic motivation in a difficult role.

#2: The Work is a Different Ballgame

Immediately, your work has far more consequences than it does in banking. Everything I have worked on in the private equity space has a purpose and always has a consequence.

Your deal teams are often way smaller and people above you operate under the assumption that you aren’t making mistakes on basic items – that is to say that you get a lot more responsibility right off the bat without the several levels of guardrails you get in banking.

Yes, your VP will still review your work, but they already assume the underlying framework is correct; because it should be.

This makes transactions easier in my opinion because you can manage yourself, but note that the deal team is very reliant on the work that you do and everything you contribute at the junior level has magnitudes of consequences at the various levels above you.

In my opinion, this has translated into more autonomy and makes the work more interesting since I get to express my curiosity more in the day-to-day. This job is less about MDs marketing efforts and more about reality and results.

#3: Your Opinion Matters

Quite literally for every deal I’ve been staffed on, at some point someone senior always asks what I think about the business we are looking at.

Many of my early opinions led to certain diligence items being pursued based on my reasoning.

In my opinion, it is tough to get this level of seniority and experience in any other role at this stage in my career. Am I making the investment decision purely by myself? No – but I can actively contribute and influence some aspect of the deal, which wasn’t my experience in banking.

#4: Resources at Your Fingertips

In banking, you spend a lot of time searching for answers that could easily be found with the right materials and resources, but you are rarely given access to those resources.

If you want to find the answer to a question, you can easily do so with some targeted digging.

However, this always means that your output should exhibit higher-level thinking because of your access to these resources, which is a departure from the “we stumbled to this figure” approach of banking.

#5: Predictability

This is a major positive in terms of balancing my lifestyle goals with a rigorous job. In private equity, yes, during deals and transactions, you will work hard, likely harder than you did in banking. However, 9 times out of 10, you’ll see it coming and can adjust your lifestyle and approach accordingly. This is enormously valuable in terms of retaining your sanity while working in finance!

So while yes, I have to work and think harder in this role, I am able to manage the role better and enjoy myself while working - in high finance that is all you can ask for.

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