Director at Small-cap PE vs Manager at MBB

Question

I am torn by doubts and confused.
I have two offers:

Investment Director at a good but small small-cap PE fund (100 M€ AUM) with no-name in the market; extremely limited carried interest in the current fund and just a promise to have 5% of total carry in the next fund (2024 or 2025)
Manager at one MBB in the PE practice

I already have both PE and MBB experience.

In MBB I will work 70+ hours and it will take 6 years or so to become Partner.
MBB can open doors like the one to move in a large-cap or in general larger PE fund, which is probably my favorite option.
In PE, I'll probably earn less over the next two-three years and then I'll earn more (apart from the scenario in which I move to large-cap).

Some headhunters advised me to move to the small-cap PE fund and then move to a larger fund. Others that I should go to MBB.

What should I do? Advice?

Answer 1

Hi there,

If your ambition is to work at a large PE fund, I would stay in PE. Going via MBB is harder and less likely to be successful for that given route.

As a clarification: You can actually make partner within 4-5 years in MBB, when starting as a manager.

Cheers,

Florian

Answer 2

If you want to stay in PE long term then starting at PE makes sense…

Yes it is true after MBB you can get more options but it is not a guarantee. On top of that you will work insane hours to do so.

I suggest speaking to people in PE firms you want to join to get their perspective on what will matter more

Answer 3

Both seem to be great options.

The chances to move from MBB to 1B+ PE are low, I would say 20%-25%.
The more you become senior, the less is likely, unless you position yourself as a portfolio director or operating partner at a PE fund. That option pays well, in line with investment teams.

At MBB you have the opportunity to become a partner in 5-6 years if you work hard-hard-hard.

You should try to negotiate carry or some profit bonus in the current fund and have some clarity on the carry in the next fund (size, timing, % of carry, activation mechanism). If bonus/carry is good, I would accept a lower GAP if compared to MBB.

Feel free to reach out to discuss it better.

Answer 4

Keeping aside the money and promotion, which of the two will make you happier? Which is closer to what you really want to do i.e a better FIT in terms of role, values and risk? Once there is a good FIT, money & success are inevitable.

Have a look at this article for more guidance- https://www.preplounge.com/en/articles/how-do-i-know-which-career-is-right-for-me

All the best choosing and congrats!

Answer 5

It really does depend on your goals and priorities. Trying to leverage MBB just as a stepping stone to end up at a larger PE fund seems like a rough route to take. Working in consulting with focus on PE basically just means cranking out one due diligence after another.

I would also think that both options pay a very high salary in absolute terms - so the question is how much money do you need to be content? And do you then still have enough free time to enjoy your money?

Answer 6

I think the fundamental question here is what excites you more? Working in a PE fund or advising companies? Do you want to be doing the job or telling people how to do the job?

At the end of the day the pay etc is your call, but the jobs are very different.

Answer 7

Hi there,

Trust your gut here. Where do you see yourself in 2-3 years? Where can you actually see yourself working?

It sounds like you want to do PE and are simply being drawn by the brand name of MBB.

Go to where you truly want to be….