Buy-side move on the cards?

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Our checklist will help you ask the right questions and make the right decision

Due Diligence

James Wallis

Is the strategy right for me?

Large PE fund, lower-mid market, VC, there are numerous options.  Sounds obvious but we often speak to people who have decided they want to work on the buy-side but have given it little further thought. If credit is an option, take a look at our article Performing, direct lending or stressed/distressed?”. 

Where are they on fund raising?

This should be central to anyone looking to join any fund – how much cash do they have, how good are they at raising it and how locked up is the money (i.e. can investors withdraw it quickly)? 

What have their returns been like?

We’re always told past performance is not guarantee of future success but it's probably the best guide you’ve got and it’s what investors look at.  Funds may be guarded about providing it but check out resources like CreditFlux and don't be afraid to ask.  It will link closely to fund raising and what you’ll ultimately be paid.

Is there any key-person risk?

We’ve seen funds struggle when a key person leaves – with investors often following.  This can be less of a risk in the credit space than it is public equities for example.  However – it’s still something to think about – understanding the wider infrastructure in the business and also the nature of the money raised (i.e. is it locked up for a period)

What's the team like personally?

It sounds obvious but teams in funds tend to be smaller than banks. This can be very positive but if there is a personality clash – it will likely be more intense.  Fund teams also tend to be more stable so you’ll be working with the same people for longer. 

What's the development potential?

In general when moving from a bank to a fund – people should be prepared for a different form of career development.  The automatic annual step up in level is less relevant in funds given the nature of the roles and smaller teams. 

Development can therefore come in a smaller number of bigger steps.  It may come the form of new money being raised, new strategies, new markets, your boss moving on to a bigger job or wider opportunities in the platform.  Think about the current structure of the team and the ambitions of the platform and their ability to execute on those ambitions.

How will it look on my CV?

You should never start a job with an eye on the exit but think about how it looks to another employer should you decide to move on.  What was your rationale for going there, what exposure did you get, what did you achieve there and how has it led you to your next move.

What’s the culture and work-life balance?

Whilst people expect to work very long hours in banks – there tends to be far more variability in funds in terms of the culture.  Do you want something intense, exciting and demanding or slower paced relaxed and social life friendly?  Also think about not just what you want now but in the future.  In the fund space – there is the full range of culture. Just be aware of how it may impact development and compensation levels.