You sacrificed years of your life grinding away in investment banking, all in pursuit of that coveted private equity (PE) associate role. The prestige, the impressive compensation, the ability to work on high-stakes deals – it seemed like the ultimate career destination. But now that you’ve made it, something feels off. The reality of life in PE isn’t quite living up to your expectations.
Despite the hype surrounding the industry, people leave private equity roles all the time, whether voluntarily or due to forces beyond their control. Even at the uppermost rungs of the ladder, a significant portion of professionals find themselves yearning for something different. The reasons can vary widely, from disillusionment with the day-to-day grind to lifestyle considerations or a simple change of heart.
The Honeymoon Phase Fades
Initially, the thrill of closing deals and the intellectual stimulation of analyzing companies might be invigorating. But over time, the repetitive nature of the work can become stale. Maybe you grow weary of the constant sourcing efforts, sifting through countless potential targets only to reject 99% of them. Or perhaps the endless parade of process memos, financial models, and due diligence documents begins to feel like a slog.
Even if you relished the analytical aspects of the job, you might find the long-term monitoring and operational improvement phases of portfolio companies less appealing. Solving complex business problems year after year can start to feel like a grind, no matter how intellectually challenging.
The Allure of Greener Pastures
As the honeymoon phase dissipates, you may start eyeing potential exit opportunities that could reignite your professional passion. Perhaps the idea of joining a hedge fund, where you can focus solely on identifying mispriced assets and making investment decisions without the extended due diligence processes, sounds appealing.
Or maybe you’re drawn to the more qualitative aspects of investing, favoring market research, industry trends, and founder stories over financial statements. In that case, a transition to growth equity or venture capital could be a better fit, allowing you to exercise your creative and visionary muscles.
If the monitoring and operational phases leave you cold, but you still crave the thrill of doing deals, a move into credit investing – like mezzanine funds or direct lending – could strike the right balance. These roles involve making quick yes/no decisions on financing opportunities without the protracted operational involvement of traditional PE.
The Lifestyle Tradeoffs
For some, the relentless grind and intense stress of private equity simply become too much to bear, no matter how intellectually stimulating the work might be. The exhilaration of closing a deal can quickly give way to the dread of long hours, constant travel, and the ever-present pressure to perform.
In these cases, exploring roles at family offices, funds of funds, or even corporate development teams at portfolio companies could provide a welcome reprieve. While the compensation may take a hit, the improved work-life balance and reduced stress levels might prove to be a worthy tradeoff.
Alternatively, you could opt for a more drastic change of pace by leaving the investment world altogether. Pursuing an entrepreneurial venture, leveraging your expertise to start your own company, or pivoting to a corporate strategy role could scratch that itch for a new challenge without the grueling private equity lifestyle.
No Path is One-Size-Fits-All
The exit opportunities for private equity professionals are numerous, each with its own set of pros and cons. Some might crave the increased specialization and focus of a hedge fund role, while others might relish the opportunity to broaden their horizons in a more generalist corporate strategy position.
The key is to remain attuned to your evolving motivations, priorities, and professional aspirations. What energizes you today might not be the same driving force a few years down the line. Realizing that your current path no longer aligns with your long-term goals is not a failure – it’s an opportunity to course-correct and rediscover your professional passion.
Embrace the Possibilities
While the private equity career track is often portrayed as a relentless upward climb toward the coveted managing director or partner roles, the reality is that few make it to those rarefied heights. For most, an exit becomes not just a possibility but an inevitability – whether driven by personal choice, performance concerns, or the brutal realities of the pyramid structure.
Rather than viewing these exits as a sign of failure, recognize them as windows into a world of new possibilities. The skills and experiences you’ve accrued in private equity are highly transferable, opening doors to a wide array of industries and roles. From high-stakes investing to corporate leadership, entrepreneurship to advisory work, your PE journey has uniquely prepared you to thrive in numerous professional arenas.
So if your private equity job starts to suck the life out of you, don’t despair. Embrace the opportunity to reassess your goals, realign your priorities, and chart an exciting new course. The path ahead may be unclear, but with an open mind and a willingness to explore, you can reignite your professional passion and find fulfillment in unexpected places.
Still not convinced…What do I do if PE is my dream gig?
Time to start networking…
Most recruiters only work with juniors (analysts) trying to break into PE. Even then, the majority of firms will require you to go direct. I have compiled a database of 375+ private equity firms. Information includes name, location, focus, investment exits, website. Hope folks trying to break into PE find this list helpful. It goes beyond the mega funds and middle market PE funds. It also showcases micro PE and smaller funds that are typically hard to find.
