Morning Coffee: The awful reality of working for a private equity fund. Banking careers for social climbers

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Working in private equity

It never stops

If you visit this site regularly, you will have already seen some cautionary tales of bankers who moved into private equity (PE) and who found the grass that was supposed to be greener to instead be withered and brown. Now, forum website Wall Street Oasis has a post from a former junior banker who joined a PE fund and whose life has become a misery as a result.

It's not that the work is boring - although assembling spreadsheets all day for a middle market private equity fund in the healthcare, manufacturing and energy space isn't necessarily more exciting than working for a bulge bracket bank covering "awesome tech companies." Nor is it that the pay is bad - although the compensation is apparently "below the street" and there's no carried interest until VP level. It's the hours - the hours are awful.

Whereas most big banks now have restrictions on juniors' working hours, giving young staff proper time off has passed some PE funds by. "Literally every weekend I get an email: "Let's talk NOW. Where are you?" and it drives me insane - i can be literally anywhere as it is my day off," complains the ex-junior banker in the midst of a rude PE awakening. "This company tracks every single hour that you are out of the office," he adds, complaining that the U.S.-based fund only offers 15 days a year in holiday time and that any additional time taken as sick days or personal time must be deducted from this.

Like many other young bankers who leave for private equity, the Wall Street Oasis complainant now looks back fondly to his time in banking. In banking, he says the culture was "amazing," the people were "fantastic," and there were plenty of social events, group lunch breaks and coffee chats. And yet, for some reason he wanted to leave for private equity, and now he feels stuck. The longer he stays in PE, the worse it will get: once he receives carried interest, he'll have to stick around for five or six years until it vests. "Start looking for another job," advises someone else on the forum. "You get paid in PE with carry which locks you in. Don't get locked in."

Separately, Financial Times' writer Janan Ganesh makes some interesting observations about the kinds of people who go into banking. "All my life, it [banking] has been the social-climber’s profession of choice," says Ganesh, noting that there are few other industries that allow talented people to advance irrespective of their accent, class, colour or nationality. By way of example, he highlights Sajid Javid, the UK home secretary who previously worked for Deutsche Bank and J.P. Morgan. Javid was applauded for making British home secretary at 48, but he became a VP at Chase Manhatan at 25, says Ganesh. "We forget how much banking did to finish off the class system in Britain," he adds.

Meanwhile:  

The European Union rejected Theresa May's plan for enhanced equivalence for financial services because it says it would, "rob the EU of its “decision-making autonomy”. (Financial Times)  

Citi appointed Stefan Wintels, who ran the bank's FIG group in EMEA since 2010, to a new role managing the bank's office in Frankfurt ahead of Brexit. (Financial News) 

Investors still aren't clear about Christian Sewing's strategy at Deutsche Bank. Unless revenues increase, Sewing may need to cut jobs in the investment bank again. (Bloomberg) 

Blackrock hired 400 staff for a data and technology hub in Hungary and plans to hire 100 more. 82% of the hires so far are Hungarian. (Financial Times) 

At least 24 people have left BAML's London equity research business in 2018, including seven senior analysts. (Financial Times) 

Quantitative hedge fund AQR paid $400k per employee last year. (Financial Times) 

You'll be in demand now if you can manipulate the genetic code of pigs. (Bloomberg) 

Send a thank you letter - it will have more effect than you think. (BPS) 

Photo credit: andresr/Getty

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