If you’re considering going into Private Equity Vs Investment Banking, you might have heard some of the myths from people who have been in both industries. One of the most common myths is that private equity professionals work less than investment bankers. Which means you would get more time to do the things you love outside of work, such as spending time with your family or hobbies. Although this sounds like it could be true, it isn’t really how the private equity business works, and we will explain why in this article below.
Differences between Investment Banking & Private Equity:
When you dig deeper into Private Equity Vs Investment Banking, there are several differences between investment banking and private equity. The hours of work are a significant one. In investment banking, you typically work as many hours as possible to make your numbers. During busy periods, that could mean working 60-hour weeks or more. It’s hard to keep up that pace for more than a few months at a time without Banking Summerville Sc burning out.
In PE, things tend to be different in general. No one is looking over your shoulder telling you how much time you should spend on projects or how many deals you should be working on at any given moment. Another difference is that in private equity, you’re limited to performing due diligence on companies. You can’t actively pursue a deal like an investment banker. Sometimes, your job could be to perform due diligence and then walk away from a company.
On the one hand, Private Equity Vs Investment Banking isn’t as stressful as investment banking since you aren’t constantly chasing deals to close. On the other hand, if you believe in a company and want to do everything you can to ensure it succeeds, being limited in what you can do for that company might be frustrating. It comes down to personal preference. What kind of work environment would you instead work in?
Is Private Equity better than Investment Banking?
The truth is, it depends on your perspective. Those on either side of the debate will indeed have no problem fighting for their side. But whether one is better than another primarily comes down to individual goals and priorities. Some argue that working in private equity means better hours and more time with family. While others argue that Private Equity Vs Investment Banking is less risky.
The question remains how do you find out what’s best for you? Start by asking yourself a few key questions. What are my career goals? Do I want to be an entrepreneur or build my own company someday? If so, an investment-banking job might not be suitable for me. These positions require long hours and commitment early on. However, if I’m looking to work in finance at a Fortune 500 company or other established firm someday, I might need experience working in a large environment. What kind of lifestyle am I looking for?
Private equity firms, for example, tend to have shorter hours and offer a more relaxed schedule. If I’m looking for flexible work hours to spend time with my family or pursue outside passions like running marathons or writing novels on evenings and weekends, private equity might be a better fit. A career in Private Equity Vs Investment Banking is also appealing if you want to one day become an entrepreneur as opposed to a banker who works at an established firm.
A PE manager has control over her destiny because she controls her fund. In other words, she can choose whether or not she wants to invest in your company and if she does decide to do. So, it means she believes in your vision enough that she’s willing to risk her own money.
Can you go from Investment Banking to Private Equity?
Some people also like to argue that you work less in private equity than in investment banking. That being said, I’ve never met anyone who came from Private Equity Vs Investment Banking and ended up working as an associate at a PE firm. They always start their own thing or go into consulting or other industries. So although it’s not entirely impossible, we have very little evidence that people successfully made that transition.
That leaves you with one question if I don’t like working 80-100 hours per week, can I choose private equity? If you’re considering switching from Private Equity Vs Investment Banking, you might be wondering how your chances are. There are many different things to consider, but here’s a quick breakdown of some factors that could impact whether or not you can make that transition. It depends on your level.
Since private equity is typically considered below investment banking in terms of prestige. People may view you less favorably if they discover you came from IB first. Especially if they don’t know what it means to work as an associate at an IB firm.