<p>the more i learn about business the more question I have.</p>
<p>Which is more lucrative and how does one get a job at a buyside firm? And is the quality of life higher when working at a buyside firm? </p>
<p>Im talking private equity and hedge funds(though the line is becoming blurred) vs investment banks</p>
<p>does investment banking or does trading lead to buyside? because LBO firms and VC firms and hedge funds look a hell of a lot more attractive than do investment banks. for that matter, why would anyone want to work at an investment bank over a buyside shop?</p>
<p>Quality of life is usually better at a buyside firm because work is more interesting. People comment that there's just something better about being the one with the money and actually making the decisions.</p>
<p>Investment banking can lead to a buyside job, depending on what you do at an i-bank. If you come from a top ranked group from your bank and you're ranked well in your analyst class you'll have a good shot at those top notch Private Equity funds (KKR, Apollo, TPG, Blackstone ..) </p>
<p>Venture capital is something that is a bit more diverse. VC's like to recruit people with science backgrounds because they're able to bring to the table real industry knowledge. Health care VCs for example really like to have people with MDs or PhDs because they actually know what they're looking at when they study new vaccines or drugs that are being proposed. Tech VCs are similar in this nature but there are bankers who still make the switch.</p>
<p>Hedge funds can also recruit people from i-banks. Equity research guys make it to the buyside often, and people who are analysts in industry groups can sometimes be recruited to value oriented hedge funds who may want you to cover stocks of that specific industry. Top traders are going to have good opportunities to move to hedge funds also.</p>
<p>So in general the pay on the buyside can be greater than banking (especially in VC and PE where you can be part ofthe carry. I think it was Vinod Khosla, a venture capitalist, who found that every time he invested less than 1 million into a company he achieved returns of 197x that amount) and sometimes the hours will be better. </p>
<p>There are reasons for staying at i-banks though. For example, some people simply can't get hired by the top PE funds. If you get stuck with a mid-market PE fund you may find yourself making less than you did as a banker. Like I said before, to get into the top funds you've got to not only come from a top BB but also a top group and be top ranked. There's only a small amount of positions out there for PE so it's tough to get the jobs. Also some people may enjoy being on the sell side because maybe they like employing sales skills and they might enjoy the firm.</p>
<p>Keep in mind that PE, HFs, and VC are generally regarded as exit opportunities for banking. Only kids from the top top top schools may have a shot at getting a job with a PE firm and even then the chance may not be great. You learn skills in banking that help you when you make the switch to these exit ops (for example modeling skills are valuable for PE).</p>
<p>When it comes to quality of life, the hours are much better in buyside jobs. In general, it's a lot easier to get an investment banking job than a buyside job because IB doesn't really require as much specific ahead of time experience. On the whole, I would say investment banking, on average, is more lucrative. Basically, the avg investment banker ten years out of school probably makes more than the avg buyside analyst ten years out of school, but that the best buyside analysts would make more than best investment bankers. </p>
<p>In addition to hedge funds and private equity shops, there are also many other investment management companies to consider like mutual funds (Fidelity, Putnam, T. Rowe Price, etc.) as well as other pension funds.</p>
<p>thanks for the info guys this is great stuff... very helpful</p>
<p>so let me get it straight though... </p>
<p>the best traders move to hedge funds. the hedge fund is like a prop trading desk at an ibank except they can use a larger variety of investment vehicles (hard for me to grasp since I still dont know about securities and bonds etc)</p>
<p>the best bankers move to private equity because their valuation and corporate finance skills are valued at PE.</p>
<p>for simplicty.. traders run hedge funds and bankers run PE firms?</p>
<p>do traders normally move into private equity or would that be a major career switch?</p>
<p>The way I see it is that there comes a point in which salary becomes irrelevant. Ten years down the road, i-bankers, venture capitalists, traders, and people working at PE firms are all making huge money.</p>
<p>From what I gather, the hours at top PE firms are no better than i-banking hours. Also, personally I wouldn't want to work at a HF. Sure, there's lots of money, but what valuable contribution do you make to society in any way? Even i-banks and PE firms provide services that aren't simply 'make more money'.</p>
<p>Heh, and you hope to make a "valuable contribution to society" by being in PE or an investment bank? HFs may invest in businesses, providing capital, some are involved in insurance. More importantly they increase liquidity in the markets. You obviously do not know the importance of this concept so I would suggest you look it up. Also look up what the various types of HFs are as its a very broad term. </p>
<p>Heh can't believe bankers make more "contributions" than HFs. Only on CC...only on CC.</p>
<p>I know it sounds stupid, and I know the various things HF's do. People don't go into finance, be that banking, PE, or VC, because they're philanthropists. </p>
<p>I don't really have legitimate reason for saying I wouldn't ever do the HF thing. "meh" basically sums it up.</p>