Exit to PE fund Forum

[kingofkingz]

Which practice area will be a better exit to private equity funds -- private M&A group or investment funds, and why?

[persia1921]

I’d give the edge to funds based on the job postings I’ve seen, and the first hand experience I have had seeing folks jump.

That said, it’s a smallish edge and I’ve also seen a number of m&a transactional folks make the switch as well.

I think the reason for the funds edge is that PE firms often do more formation work in house vs. big transaction work, and I’ve often seen firms making a first legal hire in the funds space before the m&a space.

With all that said, it would be silly to pick a practice group based on this—fund formation vs. m&a are very different in my experience and are suited to different personalities. If you can try both, I think it will become apparent pretty quickly which you prefer (or at least it was for me).

[Anonymous User]

Agree with the above, both will get you well situated (especially if you do PE M&A) but there is a definite edge in funds. You will have a much stronger understanding of fund ops which I think is a very strong skill set to bring in house.

[bobbyflayed]

You will want to stab yourself in the eyeballs if you pick investment funds as a career path. It sucks in biglaw and sucks even more in-house. The work is equivalent to watching paint dry (which is saying a lot because legal is already fairly boring). I've done both and M&A is the move because it gives you optionality. While it is good to have investment funds familiarity as a PE or VC atty, if you are a pure investment funds attorney you're going to be an investment funds attorney at a PE fund working under a GC that was probably a deal guy.

Do you want to be negotiating basically the exact same LPA and 150 side letters for the rest of your life? If no, go do M&A and give yourself some exit options.

[Anonymous User]

You will want to stab yourself in the eyeballs if you pick investment funds as a career path. It sucks in biglaw and sucks even more in-house. The work is equivalent to watching paint dry (which is saying a lot because legal is already fairly boring). I've done both and M&A is the move because it gives you optionality. While it is good to have investment funds familiarity as a PE or VC atty, if you are a pure investment funds attorney you're going to be an investment funds attorney at a PE fund working under a GC that was probably a deal guy.

Do you want to be negotiating basically the exact same LPA and 150 side letters for the rest of your life? If no, go do M&A and give yourself some exit options.

You sound...unhappy? Im a funds lawyer and know plenty others who are happy doing funds work.

It also sounds like you did some really junior level funds work and hated it. That's like saying I just did due diligence for M&A and hated it.( I'm married to an M&A attorney so know the practice very well).

M&A is not some exciting circus ride in comparison to funds. They both can be pretty boring and Y'all negotiate half the same shit every deal just like we do in fund work.

[Anonymous User]

You will want to stab yourself in the eyeballs if you pick investment funds as a career path. It sucks in biglaw and sucks even more in-house. The work is equivalent to watching paint dry (which is saying a lot because legal is already fairly boring). I've done both and M&A is the move because it gives you optionality. While it is good to have investment funds familiarity as a PE or VC atty, if you are a pure investment funds attorney you're going to be an investment funds attorney at a PE fund working under a GC that was probably a deal guy.

Do you want to be negotiating basically the exact same LPA and 150 side letters for the rest of your life? If no, go do M&A and give yourself some exit options.

You sound...unhappy? Im a funds lawyer and know plenty others who are happy doing funds work.

It also sounds like you did some really junior level funds work and hated it. That's like saying I just did due diligence for M&A and hated it.( I'm married to an M&A attorney so know the practice very well).

M&A is not some exciting circus ride in comparison to funds. They both can be pretty boring and Y'all negotiate half the same shit every deal just like we do in fund work.

Spot on. General rule is that anyone who describes legal work in general as "fairly boring" is probably unhappy.

[bobbyflayed]

Go look at the GCs of major PE and VC funds. Mostly M&A / EGC backgrounds. Funds attorneys become the in-house equivalent of line cooks.

[Anonymous User]

Which practice area will be a better exit to private equity funds -- private M&A group or investment funds, and why?

Are you asking legal-side or investment-side exits? Because the latter requires a very different skill set than the former.

[Anonymous User]

You will want to stab yourself in the eyeballs if you pick investment funds as a career path. It sucks in biglaw and sucks even more in-house. The work is equivalent to watching paint dry (which is saying a lot because legal is already fairly boring). I've done both and M&A is the move because it gives you optionality. While it is good to have investment funds familiarity as a PE or VC atty, if you are a pure investment funds attorney you're going to be an investment funds attorney at a PE fund working under a GC that was probably a deal guy.

Do you want to be negotiating basically the exact same LPA and 150 side letters for the rest of your life? If no, go do M&A and give yourself some exit options.

You sound...unhappy? Im a funds lawyer and know plenty others who are happy doing funds work.

It also sounds like you did some really junior level funds work and hated it. That's like saying I just did due diligence for M&A and hated it.( I'm married to an M&A attorney so know the practice very well).

M&A is not some exciting circus ride in comparison to funds. They both can be pretty boring and Y'all negotiate half the same shit every deal just like we do in fund work.

Funds work is signficantly more boring than M&A. At least in M&A your clients (including billionaire type business owners) have a lot of stake and will be talking to you at midnight to get the deal closed. Your funds clients just want the paperwork and could care less about it other than it gets done. Good luck getting someone to care enough to talk to you at midnight.

Pretty insane to view high impact deal work as more boring than setting up sleepy PE funds. Now individual M&A tasks may be more painful, but the actual practice of M&A is vastly more interesting and exciting than forming some stupid funds.

[Anonymous User]

Go look at the GCs of major PE and VC funds. Mostly M&A / EGC backgrounds. Funds attorneys become the in-house equivalent of line cooks.

Lol at this take. Funds lawyers talk to the gcs and c suites of major pe funds and vc funds more than you M&A attorneys. Too bad the profession is filled with people like you who are hunting for “high impact” deals. I hate cross selling my m&a teams that are composed of people like you. I can’t wait until you are the GC of KKR or TPg.

[persia1921]

I would also give the edge to funds work over M&A based on what I've seen, but it is a small edge, and I think M&A will provide a broader selection of exit options vs. funds.

I went the M&A route myself thinking I wanted to exit to a PE shop but ended up going in-house to a PubCo doing M&A work. It's been a great exit that I would not have had a shot at if I had chosen funds.

I don't think there is any point arguing about which practice area YOU will find more interesting. I personally agree that M&A is more exciting/engaging and that funds work is generally mundane, but I know plenty of funds lawyers that love it and hate M&A--to each their own.

if you can, you should try both and do what YOU find more interesting. Don't fall into the trap of picking a practice based on potential exit options alone. I think keeping exit options in mind is smart, but if you end up choosing a practice purely because you think it has good exit options, and generally dislike the work, I think you will be unhappy (coming from someone that was also given the advice that funds work provides generally better exits).

Good luck.