privateequityjobs.com - The Road Less Taken

The Road Less Taken:

Alternative Employment Opportunities in Today’s Market Place

As many professionals are experiencing there are not many employment opportunities available at the present time. Although December is always a relatively slow hiring month, the present economy/credit crisis is now the significant contributing factor to the lack of employment opportunities. This is not to say that Private Equity and Hedge Fund firms are not hiring at all but rather there are fewer opportunities being offered.

One area where PrivateEquityJobs.com has seen an increase in activity is within the Endowment, Foundation and Public Pension sectors. The organizations within this group, which we will refer to for this article as “Non-Profits”, are able to take advantage of this hiring slow down and are finding a strong candidate pool. While in the past, these positions may have been frowned upon because they had a reputation of being less glamorous and lower paying; many professionals are now open to these opportunities.

In the past few weeks we have seen and spoken to many organizations in this “non-profit” group which are actively hiring for Analyst, Portfolio Managers and experienced Operational/Infrastructure professionals. Furthermore, during this hiring slow down we have seen an increase in emails and calls asking for advice and clarification regarding these roles and opportunities especially in regards to foundations, endowments and public pension plans. I want to share with you the questions that we are hearing the most and what our responses are:

What are the primary pros and cons of working for one of these “non-profit” organizations?

Benefits:

High quality of life, good work /life balance
“Pure Investor Role”
Paying job in down economy

Cons:

Typically pay is not comparative to Private Sector, although the pay discrepancy is narrowing
Bureaucracy, especially in Public Pensions

What does taking this type of role do for my career path?

There are three different career paths for professionals who work for a “non-profit” organization:

Stay within the “non-profit” sector and continue to take more senior roles at larger and more prestigious organizations. The climax of this path is typically the CIO role for a large multibillion dollar diversified portfolio.
After three to five years of working for the “non-profit” organization you may be recruited out to take a more senior role at a private investment management firm. In many cases you will be recruited by an investment firm that has a working relationship with you at the organization. Firms are interested in hiring you both for your experience and your relationships within the endowment, foundation and public pension sector.
Establishing your own Private Investment Management firm, in many cases with the backing from your present employer. Often these organizations would rather support and invest in a professional they trust and believe in than having to find an outside manager. If you have proven to them that you are a strong Portfolio Manager they will be interested by the new revenue stream an equity ownership in a new firm could mean while still being able to receive the yearly performance you produced while employed directly by them.

Taking a position with a Foundation, Endowment and Public Pension is not the ideal role for everyone. Once you have truly weighed the pros and cons, understand the possible career paths and the high quality life that these positions can offer, the positions become attractive to professionals looking for a change. These roles allow you as an investment professional to concentrate on your performance while not having to worry about raising assets and servicing external clients. These are concerns that many of your private investment management peers deal with every day and in many cases take them away from there real “love” managing the portfolio.

Two final notes; many of these organization are in areas with a lower cost of living so when reviewing the compensation make sure you understand the cost of living for the area where you will make your new home. And finally if you decide to take a role with one of these organizations you must remain active in managing your career and maintaining a strong network.