EP39 - Peak MBA
I am a humble owner of a $100m PE business.
My firm is the dream destination for every ambitious MBA.
My recruits arrive from investment banks, broken and sleep-deprived.
Thinking they've finally "made it." In reality, they've just entered a more sophisticated cage.
Their 90-hour work weeks aren't a temporary sacrifice.
It's a filtering mechanism for obedience.
I don't need to manage them. Their own desperate ambition does it for me.
They're not building a career. They're building my LPs' returns on the wreckage of their 20s.
Then there are my veterans. My 50-yo men.
They look rich on paper. But their liquidity is a mirage I control.
We give them "equity." Shares they can't sell on the open market.
If they leave, they must sell it back to me. At a "Fair Market Value" that my senior partners determine.
How fair you ask?
A 50% discount when I'm the one holding the checkbook sounds perfectly fair.
I've trained them to obsess over a 0.5% variance in a spreadsheet. It keeps them busy while I own their net worth.
Even my Senior Managing Directors, the gods they all aspire to be, fly economy plus.
They flash a lifestyle funded by a line of credit from the firm.
They chase a "carry" check that might vest in a decade. If my fund performs...
They think of it as a golden handcuff.
I dont think they understand.
I don't need handcuffs when I've built the perfect prison.
A prison where the inmates pay me for the privilege of being there.
Follow me for more financial advice.
Context
Everyone thinks private equity is a profitable career.
Unless you are at senior or partner level, many of them don't make more than what the public thinks.
Adjusted by hours, the compensation isn't unfairly attractive, from all of the clauses in the contract.
At the end of the day, you make a lot of money by creating what a lot of people want. A job that looks too good to be true is often a cheese on a mousetrap.