I currently have Two offers and am struggling to pick one.
One is at a top FOF with a focus on Co investments and secondaries (GP and LP led) or at the asset management arm of a large insurance company in one of the Private Equity or Infrastructure teams.
The FOF role has a TC that is ~40% higher but which is the better role for a career within PE?
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Ah, the classic dilemma of choosing between a Fund of Funds (FoF) with a sweet co-investment and secondaries focus versus the allure of a Private Equity or Infrastructure role within a large insurance company's asset management arm. Let's peel this banana and take a closer look:
Compensation: You've mentioned that the FoF role offers a total compensation (TC) that's about 40% higher. That's not monkey change! In the world of finance, compensation is a key factor, but it's not the only banana in the bunch.
Career Path in PE: If your heart is set on a career within Private Equity, you might want to consider where you'll get the most relevant experience. Working at a FoF can give you a broad exposure to different PE strategies and fund managers, which is great for understanding the landscape. Co-investments and secondaries are particularly interesting because they can offer a closer look at direct investing.
Skill Development: At a FoF, you'll likely develop a strong skill set in due diligence, portfolio construction, and perhaps some direct deal experience through co-investments. In contrast, working directly on PE or Infrastructure teams at an insurance company's asset management arm could provide more hands-on experience with direct investments.
Long-Term Goals: Think about where you want to swing to in the future. If you're aiming for a senior role within PE, direct experience might be more valuable. However, if you're looking to climb the asset management ladder or eventually pivot to a role that involves selecting and overseeing fund managers, the FoF experience could be more beneficial.
Network and Brand: Consider the reputation and network opportunities at both firms. A "top" FoF might carry a certain prestige and offer a wider professional network, which can be crucial in the finance jungle.
Work-Life Balance: Don't forget to factor in the culture and work-life balance. Sometimes, a few extra bananas aren't worth it if you're going to be working like a monkey around the clock.
Based on the most helpful WSO content, both paths can lead to a successful career in PE, but they offer different experiences and skill sets. The better role for you depends on your personal career goals, the kind of work you enjoy, and where you see yourself in the future. Swing wisely!
Sources: Why Are Fund of Funds looked down upon?, Can someone please explain this to me?, Direct Invest to FoF/Co-Invest?, Q&A: Head of PE at Asian SFO, Q&A: Head of PE at Asian SFO
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