Another what role to take...
I know these posts are oversaturated on this forum but I would appreciate some guidance here;
- for background, 31 years old, 9 year post grad, MBA (non target) and CPA, 4 years in TAS , 5 years doing Valuations at 2 MFs
- this does matter- married expecting a kid early 2024
fortunate enough to grab 2 offers, and need to decide; both are very different in terms of responsibilities and terms/comp
- offer one , VP Valuations at a LMM fund in Tampa, cash TC 250ish but .1% carry and yearly GP equity through the fee waivers.
- offer two, investment professional at a family office in Miami, cash TC 275ish but no carry or GP equity, they have a strong track record and are looking to raise third party money in the future
my brain says option 1 is way more stable, and having a piece of the carry immediately is a great opportunity to enjoy a nice WLB a lifestyle etc, but then the risk vs reward of option 2 is also attractive, even if the cost of living in Miami is insane that it requires being a bit more conservative lifestyle wise
what are the monkeys thoughts.
Bump I need to sign some thing by Monday
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I guess that’s why I included age and family situation. If I was 24, single, I think option 2 without a doubt.
9 years into a career how many exit ops / future plans are there. I should stick around my next stop for a long time.
is .1% of carry even meaningful assuming LMM $100m and assume 2.5x MOIC and 20% carry and 10bps equals 30k over the course of 5-7 years and thats assuming the hits 2.5x MOIC which of course isn't easy. The counterpoint is that if the fund is materially bigger (2-3x) than the $100m then of course more carry upside...though over course of 5-7 years idk if that makes up for the 25k in TC difference
No idea how much GP equity means annually so can't opine on that. Personally would go with option 2
Maybe I incorrectly said LMM they have 3.15 billion AUM right now
AUM typically doesn't matter, latest fund size is more relevant
And one more note on the carry, no vesting period you realize it in line with the waterfall of the fund. And the track record to date is 2.66x so when I modeled what the carry could be I conservatively said 2x and that at every 750mm raised I am diluted by .001% but in reality it’s less
i'd go with option 1 given the family situation. much more stable and WLB lifestyle. family offices can be a nightmare and i have a two friends that worked for different FOs and had terrible experiences. having carry is meaningful even if it's small to start, work a couple years, likely see that increase given the firm signaled that they're not cheap at least on the incentive piece
Option 1
Look, upside is higher with the IP role, for the current role and for future opportunities. But ultimately, I'd talk it over with your wife to get her thoughts AND think it through independently. Will you both be okay with it, who's going to take care of the baby when both of you are busy? Careful how you frame your questions too, in order to get non-biased answers. And think it through for yourself too, because if you're not happy / fulfilled at work, it could carry on into your personal life (same goes for feeling stressed at work).
Idk what your FO hours would be like, but if they can get bad, your WLB is obviously not going to be great. 250-275 TC living in Florida is going to be great either way. Congrats on both.
Option 1.
Are your parents wealthy? Your wife's? Does your wife have a real job or will be a low earner / just a stay at home mom?
If you come from a successful family or your wife is a true earning partner, I think option 1 makes a lot of sense. Average comp, job you know well and likely decent hours.
If you're the sole earner and cannot rely on family in case of financial adversity, the upside and exit potential at option 2 is appealing. If you're diligence has not shown it to be a toxic place, investing excites you and you want to earn more in the future, you gotta roll the dice sometimes.
Look 250k isn't bad, and you only have one kid. If you and your wife don't like living high on the hog and don't really care about things like private schools, fancy dinners and luxury vacations, then additional comp won't move the needle for you.
But Miami is an expensive place, and money makes alot of basic life problems cease to exist so don't just default into option 1. Nothing ventured, nothing gained my man.
All really good points. I’ll try and hit them a bit in order, and see if putting pen to paper helps me align to one more or less.
My family is wealthy, albeit I don’t love relying on that- but obv makes it less scary if the FO blew up.
I would love my wife to be a stay at home mom until at least the kid is old enough to go day care / pre school. I was raised by a revolving door of child care at home until my dad retired young.
Wife runs a small biz so she can work from anywhere but when budgeting it out I like to put her to 0, so anything she’d make is a luxury.
Investing excites me, I think the FO will be successful long term, but being one of the first 5 investing professionals, getting no GP equity , carry or assurance of it is off putting. But I agree risk it for the biscuit.
Something else to consider in a worse case scenario.
Are you comfortable or willing to move in the event of a layoff?
Thought process being that outside of Raymond James I don’t really see there being any lucrative finance roles in a city like Tampa so if you wanted to make similar money you’d likely have to leave.
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