IB to University Endowment Office: Seeking Answers
I'm considering my move out of IB and am curious to get thoughts on the transition to an endowment fund. There are a few things I'm weighing:
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Quality of Life: By all accounts this would be a major improvement from my current role. I know my mental health would improve.
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Future Opportunities: One feeling I have is that it's a "step down the ladder". Why cut your teeth in IB only to go to a role with less apparent upside? What does it look like leaving the world of direct investing, and how far/wide can one realistically go?
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Compensation: IB is brutal but we get paid to make up for that. What does comp realistically look like in a fund with $+7B in AUM, and how does that look as you progress up the ladder?
If anyone has some insight to any of these questions/topics, it would be much appreciated.
Ah, the classic transition conundrum! Let's break it down, shall we?
Quality of Life: You're absolutely right. Based on the most helpful WSO content, the work-life balance at an endowment fund is generally better than in IB. Less late nights, less weekend work, and more predictability in your schedule.
Future Opportunities: It's not necessarily a "step down the ladder". It's more like a step onto a different ladder. Endowment funds offer a unique perspective on investing, as you're looking at a wide range of asset classes and thinking about long-term, strategic issues. If you decide to leave, you could potentially move into a role at a traditional asset manager, a pension fund, or even a consulting firm that advises these types of institutions.
Compensation: Ah, the golden question. Based on previous WSO threads, compensation at an endowment fund can vary widely, but it's generally lower than in IB, especially at the junior levels. However, as you move up the ranks, the gap can narrow. At a $7B+ fund, you could expect a decent compensation package, but it's unlikely to match what you'd earn in IB.
Remember, every career move is a trade-off. It's about finding the balance that works best for you. Good luck!
Sources: Q&A - Analyst at $1.5B Endowment Fund, IB or $200M PE Fund out of UG?, https://www.wallstreetoasis.com/forum/investment-banking/ib-vs-quant-salaries-quality-of-life-etc?customgpt=1
Ah, the classic transition conundrum! Let's break it down, shall we?
Quality of Life: You're spot on. The work-life balance at an endowment fund is generally better than in IB. Less stress, more predictable hours, and a chance to dive deep into the investments you're making.
Future Opportunities: It's not necessarily a "step down the ladder". It's more like stepping onto a different ladder. The skills you've honed in IB - financial analysis, due diligence, deal structuring - are all highly transferable and valued in the endowment world. As for exit opportunities, they might be different than in IB, but they're not necessarily limited. You could move into other areas of asset management, join a non-profit or even transition into a more traditional buy-side role.
Compensation: Ah, the million-dollar question (sometimes literally!). Compensation can vary widely, but generally, it might be lower than in IB, especially at the junior level. However, as you move up the ranks, the gap can narrow. Plus, the improved work-life balance can be a form of "compensation" in itself.
Remember, every career move should align with your personal goals and values. If you're seeking a better work-life balance and are interested in the unique challenges and rewards of managing an endowment, this could be a great move for you. Good luck!
Sources: Q&A - Analyst at $1.5B Endowment Fund, https://www.wallstreetoasis.com/forum/investment-banking/ib-vs-quant-salaries-quality-of-life-etc?customgpt=1, IB or $200M PE Fund out of UG?
Quality of Life: This will improve substantially. I've worked <10 weekends over 9 years in the E&F/family office space. That said, work/life varies substantially by LP type and investment role. As a rule, moving closer to deals (secondaries, coinvest) requires more hours. If you're doing coinvest for a sovereign, it will likely still be a grind. If working for an endowment that is process oriented and has a mature portfolio, most of your work will be staying up-to-date on managers/markets and you'll work a 40hr work week. Most roles are somewhere between 30 and 60 hours per week. Depending on the fund, travel may ramp substantially versus what you did in IB.
Future Opportunities: You might be able to go back to direct investments (I've seen it done), but you're generally setting yourself up for other allocator roles or in some cases IR for alternative asset managers. You can always get an MBA and do a reset.
Compensation: Like quality of life, this varies substantially. Pay varies by the LP type -- fund-of-funds/family offices/sovereign tend to pay more than E&Fs who pay more than pensions. Look at publicly available data here -- top quality endowment CIOs/heads of privates will be in the 7 figures whereas comp for a senior pension official is lower. Secondaries/coinvest/direct roles will tend to pay more. Most senior analyst/associate roles tend to be in the $150k range all-in. Some might be under $100k while some roles will be over $200k.
If you want to see senior compensation at various E&Fs, you can just pull up their 990 tax filings. The top ten highest paid people will be listed and that always includes the CIO as well as sometimes other senior investment professionals.
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