• “Wait, does it even exist? I thought private equity firms don’t invest in the sector.”
• “Haven’t ESG and the energy transition killed deal activity?”
• “How can PE firms invest in oil & gas when commodity prices fluctuate so much?”

All these are valid concerns, and it is 100% correct that oil & gas private equity is highly cyclical.

However, it’s far from “dead” – quite a few PE firms focus on oil & gas or on the broader power, utilities, infrastructure, and energy space.

It’s a much smaller industry than tech, healthcare, industrials, or consumer retail PE, but it can still be very interesting if you have the “energy investor” mindset:

What is Oil & Gas Private Equity, and Why Is It So Niche?

Oil & Gas Private Equity Definition: An O&G-focused private equity firm raises capital from outside investors (Limited Partners), invests in companies and assets in the Midstream, Upstream, Downstream, and Oilfield Services verticals, and grows and sells these stakes within 3 – 7 years to realize a return on their investment.

As with the FIG private equity definition on this site, the order of the verticals here is intentional.

Upstream or Exploration & Production (E&P) typically accounts for 50%+ of overall deal activity in oil & gas, but it does not necessarily represent most private equity activity.

Like FIG, there’s a disconnect because the companies that explore, drill, and produce oil and gas are often poor candidates for traditional leveraged buyouts.

Their cash flows are unstable because commodity prices fluctuate all the time, and they cannot “control” these prices since oil, gas, and natural gas liquids are global commodities.

Deloitte has a great free feature on oil & gas M&A activity over several decades, so I will use a few graphs from it and add my commentary below:

Note that this second graph shows total deal volume over 5 or 6-year periods.

So, oil & gas represents ~$10 – $20 billion per year in PE acquisition activity vs. $50 – $100+ billion in industries like tech and healthcare.

Why is Oil & Gas Not a Great Sector for Traditional Leveraged Buyouts?

If you consider the qualities that PE firms seek in buyout candidates, it’s clear why traditional leveraged buyouts are rare in oil & gas:

• Stable Cash Flows – The commodity price fluctuations make this difficult; even a proper Debt Schedule is tricky when you can’t be sure how much Interest Expense the company can pay in each period. CapEx requirements also tend to be high and fluctuate a lot.
• Price / Valuation – Many O&G companies trade at relatively modest valuation multiples, but they also fluctuate significantly since they’re strongly linked to macro factors.
• Revenue and Expenses – There’s not much recurring revenue in most verticals, and companies must pay for drilling and equipment even if oil prices crash. Margins can be high in certain verticals, which helps a bit.
• Balance Sheet – Most O&G firms have significant fixed assets, which is normally good for Debt collateral, but assets such as oil wells also tend to deplete/depreciate quickly. So, lenders do not necessarily perceive them in the same way as prime real estate.
• Industry / Market – Some O&G markets are fragmented along geographic lines, but there’s also quite a lot of government regulation in areas like Downstream. And some of the more appealing verticals for PE, like Midstream, are increasingly consolidated.

On the last point, Bain has a great report that explains the issues, which I’ll summarize with this image:

The issues above mean that much of the PE activity in oil & gas lies in joint-venture (JV) and minority-stake deals rather than traditional LBOs.

And when LBOs do take place, they’re more common in Midstream than Upstream.

Many of the pipeline companies in Midstream operate like utilities or infrastructure firms, with highly visible cash flows due to long-term price/volume contracts and CapEx requirements that are known long in advance.

But as shown above, traditional LBOs, even in Midstream, have become more difficult because there are fewer publicly traded companies.

There is some deal activity in Downstream and Oilfield Services, but these verticals do not have many independent public companies, so the potential acquisition lists are short.

Oil & Gas Private Equity vs. “Energy” and “Energy Transition” PE

Before covering the top firm lists and deals, I also want to point out that you must be very careful with classifications in this industry.

As the “energy transition” has become a buzzword, many traditional oil & gas private equity firms have rebranded themselves as “energy investors” or “energy transition investors.”

In some cases, this is true because the firms have legitimately expanded beyond oil & gas.

But in other cases, it’s more of a “lipstick on the pig” scenario, as the firms still invest primarily in O&G but do occasional power, utilities, or infrastructure deals as well.

The Top Oil & Gas Private Equity Firms

I’ll divide the firms here into a few categories.

Private Equity Mega-Funds and “Large Funds” That Invest in Oil & Gas

Many, but not all, of the PE mega-funds have invested in this sector:

Their interest has fluctuated over time, but most have executed large deals in the past.

I’ve seen reports that certain large firms have “shut down” their oil & gas teams, but I was not able to verify this from public sources.

Larger, Diversified Energy/Power/Infrastructure Funds

Many of these were traditionally known as “oil & gas private equity firms” but have since rebranded and diversified to invest in other sectors.

Also, note that some have always been diversified, so it’s not always a recent change of heart:

BlackRock and Brookfield are far bigger than the other firms here, but I’m listing them because of BlackRock’s acquisition of Global Infrastructure Partners (GIP) and Brookfield’s acquisition of Oaktree, which has done a good number of power/energy deals.

BlackRock / GIP is more of a stretch, but if you look at its Portfolio page, it has invested in quite a few Midstream companies.

Smaller, Dedicated Oil & Gas Private Equity Firms

This category includes smaller firms that focus more squarely on traditional oil & gas:

I define “smaller” as “AUM below $5 billion,” so this applies to most of the names above except for Lime Rock Partners, which is in the $10B+ range.

One final category is “Moderate-sized, somewhat diversified firms that do occasional oil & gas deals” (yeah, I need to pick better names).

Examples include Denham Capital, Pelican Energy (Oilfield Services and nuclear focus), and Yorktown Energy Partners.

How Oil & Gas Private Equity Deals Work

I would put most O&G PE deals into one of three “buckets”:

1. E&P Asset Deal – During the shale boom, many PE firms bought up land, did a bit of drilling to prove its potential, and then flipped the land to larger energy companies. This still happens today, but it’s more of a “buy developed asset low, sell it high” strategy than an “explore new land” one.
2. Midstream/Pipeline Buyouts – These function more like traditional leveraged buyouts for infrastructure assets with high distribution/dividend yields.
3. Buyouts of Conventional Companies with Some Oil & Gas Exposure – For example, a buyout of an oil & gas equipment provider might fall in this category. The key drivers resemble those of non-energy companies, but they also have some exposure to the commodity price cycle.

To illustrate a deal in the second bucket, we’ll look at Brookfield’s acquisition of Colonial Enterprises for $9 billion in 2025.

The deal was done for 9x EBITDA, and Brookfield laid out why it liked the company and the transaction in its investor presentation:

This deal is a yield play, making it quite different from a standard leveraged buyout.

We don’t know this asset’s exact Distribution Yield, but the “7-year payback period” quoted here and an assumed 4x Debt / EBITDA might correspond to this type of financial profile:

It might seem impossible to distribute 50% of the company’s EBITDA each year, but this is common for high-margin infrastructure assets, and some Midstream MLPs do offer 10% Distribution Yields.

The Distribution Growth Rates are aggressive, but Brookfield might have a plan to increase the margins or boost the Utilization Rate even higher.

I’m not going to build a full LBO model here because I don’t have the company’s financials (it was owned by Shell before this deal), but a summary Returns Attribution Analysis might look like this:

Multiple Expansion is always possible, but in an infrastructure deal like this one, the sponsor is betting on EBITDA Growth, high Distribution Yields, and modest Debt Repayment.

If you want a full cash-flow model and valuation for a pipeline company, look at our Dividend Discount Model tutorial, which is based on DT Midstream.

For a “Category #3” deal example (conventional company with oil & gas exposure), our Oil & Gas Modeling course includes an LBO case study based on Frontline plc, a major oil tanker company based in Cyprus.

This company is a much less compelling buyout candidate because its cash flows are mostly linked to the “daily spot rates” that its vessels earn based on market conditions.

Also, its CapEx requirements are massive, and most of its fleet needs to be replaced over the next 5 – 10 years.

You can see the cash-flow issues by reviewing the historical spot rates:

Another issue is that there’s almost no correlation between the company’s valuation multiples, these spot rates, the overall growth rates, or oil prices.

This makes it difficult to link the Exit Multiples to metrics such as ROIC improvement or growth rates.

Nevertheless, we do build a full 3-statement LBO model for the company and conclude that the 5-year IRR is unlikely to reach the 20%+ range:

I don’t have a great example of a Category #1 deal (an asset flip to a larger energy company), but feel free to leave a comment with any good references you’ve seen.

Oil & Gas Private Equity Careers

Most of the career differences here relate more to the fund type, size, and performance than the industry focus.

But I will note a few differences that are oil & gas-related:

1) Compensation – Since the industry is highly cyclical, do not assume anything for carried interest, as it could be wiped out in the next downturn.

Carry should not be a big factor at the junior-to-mid levels, but this does affect senior professionals and anyone in it for the long term.

2) Advancement and Lateral Moves – Because O&G PE is so specialized, it tends to be quite difficult to advance because few senior professionals leave willingly.

Also, there has been significant consolidation among energy PE firms, which may limit your ability to win competitive offers elsewhere.

If you want to avoid these issues, aim for diversified firms that also invest in power, utilities, and infrastructure.

Recruiting: On-Cycle, Off-Cycle, and the Commodity Price Cycle

Oil & gas private equity recruiting tends to be somewhere between the traditional “on-cycle” and “off-cycle” categories:

• Timing: Firms rarely hire candidates ~2 years in advance, but they might hire for an immediate start date or up to 6 – 12 months in advance. So, it’s later than the NY-based PE recruiting cycle, but less structured than true off-cycle recruiting.
• Headhunters: Headhunters still tend to run most of these processes. Dynamics has usually had the strongest presence in the U.S., but Henkel Search Partners (“HSP”) and SG Partners have also recruited candidates.
• Candidates: You normally need to work in an oil & gas investment banking group at a larger bank to be competitive. Closely related roles, such as corporate development at an energy company, might work, but I couldn’t find many examples of real people making this transition. It is a small industry, so expect reference and background checks.
• Interviews and Modeling Tests: Expect the usual “Why energy?” and “Why Texas/Alberta/Other Location?” and “Which vertical/companies do you like?” questions. Assessments might consist of a simple NAV Model for an Upstream company, a Midstream LBO model, or sometimes more of a qualitative case.

Is Oil & Gas Private Equity for You?

I do not recommend dedicated oil & gas private equity firms for most people.

I like the industry a lot, having spent almost a year working on a new version of our modeling course, and I find the companies quite interesting.

But working at a dedicated O&G firm is not a great way to be an investor in this market for the reasons described above: Cyclicality, consolidating industry, lack of buyout candidates, etc.

If you want to pursue buy-side roles in the sector, I recommend one of these alternatives instead:

1. Diversified Power/Energy/Infrastructure Firm – Work at a PE firm that invests in oil & gas and related industries to make sure you get better deal experience and work on more traditional buyouts.
2. Oil & Gas Hedge Fund – Other than biotech, oil & gas might be the sector with the greatest “spread” between the potential of hedge funds and traditional PE funds. There are plenty of ways to make money by investing in O&G-related public equities (see the previous coverage of energy hedge funds).
3. Small, Specialized Firm – And if you have your heart set on oil & gas private equity, consider smaller firms that pursue niche strategies, such as acquiring mineral/royalty rights. You’ll still be specialized, but there’s probably more potential here.

The rumors of the death of oil & gas private equity have been greatly exaggerated, but that doesn’t mean it’s about to jump out of its hospital bed and run a marathon, either.

The post Oil & Gas Private Equity: How to Invest in the Least Stable Cash Flows Around appeared first on Mergers & Inquisitions.

One of my cousins overheard this comment and immediately asked a pointed question:

“OK, but what’s going uphill? Everything is getting worse. Which cities are better to live in now than 5 or 10 years ago?”

I didn’t have a good answer because he was right.

I’m borrowing this quote here because it also describes my views on investment banking as a career.

Yes, it is worse than in 2016 or 2006 in terms of the inflation-adjusted compensation and the recruiting effort required, so the Rewards / Effort Ratio has shifted:

But everything else competing with IB jobs – Big Tech, law, consulting, Big 4, corporate finance, etc. – started out worse on the “Rewards” side and is getting even worse.

I’ll start with my short version here and then move into the details:

The Short Version of “Is Investment Banking Worth It?”

Many people frame the question this way:

“Working 80 – 100 hours per week is terrible, but if you can survive it for a few years, you earn a lot and get great exit opportunities. So, assuming you can do it and you want to stay in finance, IB is easily worth it. If not, it’s not worth it.”

This is an incomplete framing because the time and effort required to break in have increased significantly, and they are bigger risks.

And, frankly, working non-stop for ~2 years in your 20s is not that big a sacrifice.

If you value career advancement and high compensation, “brutal hours in the early years” is routine in many other fields, such as medicine, law, and even tech startups.

So, I would frame it this way:

• The rewards from investment banking (compensation, advancement, and exit opportunities) are still quite good if you can survive the hours/lifestyle for the first few years.
• But the effort required to get in is now much higher since you need a series of internships and a very early start to networking and interview prep (Year 1 of university). If you miss that, lateral and MBA hiring still exist, but they have also become more competitive and depend heavily on the current hiring market.
• So, the biggest risk is that you spend a lot of time preparing to enter this industry, only to find out that it’s not feasible or that you do not like it.
• The outlook isn’t great due to global/macro concerns, more AI/automation, and the smaller headcounts that are likely to result from both. Banks will always hire a certain number of Analysts and Associates, but it will be harder to win the initial offers.
• However, these same factors are affecting many other industries to an even greater extent, which leaves us in that “Everything going downhill” scenario.

Why Investment Banking Easily Used to Be “Worth It”

When I got into the industry in ancient times – before the 2008 financial crisis – it was 100% possible to attend a good university, earn high grades, and win full-time IB roles without having relevant finance internships.

Of course, you couldn’t get a Goldman Sachs IB offer with that profile, but students still won offers at lesser banks after deciding to pursue finance quite late.

You had to have some technical knowledge, but the bar was lower, and bankers mostly assessed whether you had the temperament to do the job.

The assumption was that if you were smart enough and put in very long hours, you could learn everything on the job.

After you started working, you also had more time to look for exit opportunities because on-cycle private equity recruiting started later; many large funds waited almost a year to kick off interviews.

It’s hard to find accurate compensation data from back then, but top-ranked 1^st Year Analysts in those years peaked at $150K in total compensation ($60K base + $90K bonus).

Adjusted for inflation, that would be over $240K today, which is well above what pretty much any 1^st Year Analyst now earns.

In short, investment banking in this period allowed smart, hard-working students to get high-paying jobs and set themselves up for even better jobs without committing to the career from Year 1 of university or spending huge amounts of time/effort on preparation.

Not many people seriously asked, “Is investment banking worth it?” because the answer was obvious from 2 seconds of math.

What Changed Over Time

The 2008 financial crisis was the first “shoe to drop.”

Everyone panicked, banks immediately cut their headcounts and hiring plans, and… surprisingly, plenty of students still wanted to break in.

Afterward, banks began to demand more and better internship experience and raised the bar for the technical knowledge required to pass interviews.

In the mid-to-late 2010s, banks began to accelerate their recruiting processes and automate the initial interviews with tools like HireVue.

They expected you to have 1 – 2 solid internships in your first ~1.5 years of university, leaving little time to experiment or try other industries first.

Summer internship recruiting in the U.S. eventually settled on a start date about 1.5 years in advance of the internships, though this varies from year to year.

Buy-side recruiting kept creeping up as well, to the point where some PE mega-funds recruited a full 2 years in advance (!). Analysts would start their jobs, do nothing, and immediately recruit for these roles.

Exit opportunities remained good, and compensation increased modestly, but investment banking also lost ground to Big Tech jobs and even fields like consulting.

These fields didn’t offer the pay ceiling or exit opportunities that banks did, but you could still earn a few hundred thousand per year with a much better work/life balance.

Plus, you didn’t have to start preparing from Day 1 at university to get in.

COVID and the Aftermath

When COVID struck in 2020, most industries initially panicked… before over-hiring amid a boom in deal activity (banks and law firms) and a much higher demand for online services and products (Big Tech).

Hiring standards fell, bonuses skyrocketed, and it seemed like you couldn’t go wrong with any of these jobs.

Somehow, investment banking hours got even worse, but recruiting got easier, and exits and compensation were strong, so most people went along with it.

Of course, it didn’t last: Inflation, higher interest rates, and the Ukraine War all increased volatility and pushed down deal activity and bonuses.

Tech companies began their rounds of layoffs, everyone moved into “efficiency mode,” and the age of the “Fun Tech Job” seemed to be over.

Recent Changes: AI, Automation, and Headcount Fears

We still have some of these macro issues (and new ones, like Iran), but the AI boom/craze has also changed the appeal of many careers.

The doomers claim that everyone will lose their job to AI, especially in “knowledge work” fields like finance, law, and accounting.

I think this is greatly overstated, but there is evidence that the job market is bad in certain industries, with tech firms in 2025 laying off nearly 250,000 employees.

The total headcount is still up substantially over the past 10 years, but most Big Tech firms have not been growing much over the past few years (e.g., Microsoft and Alphabet):

The work environment has changed drastically, with much higher expectations and a persistent fear of job loss across almost all departments.

Everything seems to be going downhill, but in my view, other industries are at greater risk than IB for several reasons:

• Headcount: Banks in the U.S. do not hire that many IB Analysts; the total class size across all banks is a few thousand per year vs. hundreds of thousands of new hires per year in tech. Also, the compensation expense in most IB groups is top-heavy since the senior bankers earn far more than junior staff.
• Turnover and Promotions: IB is based on the “up or out” principle. Since bankers constantly leave for other industries and firms, banks always need to replace them with new hires. Even if these new hires are not immediately useful, they need to maintain the pipeline.
• Clients & Deals: Many software engineering, administrative, and back/middle-office roles are easier to automate because they are not client-facing. As an Analyst or Associate, you are not exactly client-facing, but you still have some client interaction. Also, banks offer specific results: If you successfully raise capital or close a deal for a client, you get paid. If not, you don’t.

Industries that use hourly billing, such as law and consulting, are at greater risk of disruption because work can always be done more efficiently.

But in banking, efficiency concerns are negligible because clients pay for closed deals.

Yes, class sizes will probably shrink, but I don’t think firms can “stop” hiring Analysts and Associates.

The most likely scenario is that junior bankers get asked to do more with less, and headcount levels might become less sensitive to deal volume.

So, What Does This Mean? Is Investment Banking Worth It?

If you are at a target university (a top-ranked school), you start the recruitment process early, and you are 100% fine with working 80+ hours per week for a few years, yes, investment banking is still worth it.

Also, if you are in a closely related field, the hiring market is good, and you are serious about making a major change, lateral hiring could still be worth it.

But if you are not in one of these categories, the rationale is weaker:

• Target School But Issues: If you got started late, have no real finance experience, or have low grades, I’m not sure it’s worth the uphill battle.
• Non-Target School: Honestly, I think you would be better served by aiming for a different field at first (see below).
• Huge Career Changer: If you’re moving in from an MD or PhD program or engineering or something else quite far removed, I’m not sure it’s worth it (age could also be an issue).

If you decide against IB, what should you do instead?

Many people would tell you to become a plumber or electrician or go to medical school, and I suppose these are options.

But if you want more of a traditional office job, I recommend focusing on careers with lower barriers to entry and sales/relationship skills that are difficult to automate.

For example:

• High-Ticket Sales in industries like pharmaceuticals, luxury goods, or industrial equipment.
• Wealth Management – yes, I know, people look down on it, but if you’re good and stick with it, it can be just as lucrative as IB.
• Commercial Real Estate – Not all roles, but anything that requires in-person visits, on-the-ground work, and high-end property sales will always have a human component.
• Corporate Banking – It’s less competitive than IB, offers better work/life balance, and potentially turns into more of a “relationship” role earlier in your career.

I would avoid fields with less of a client- or deal-facing element, such as FP&A and even certain hedge funds and prop trading firms.

I don’t think any careers are going uphill in 2026, but you can avoid ones with the steepest downhill dives.

The post Is Investment Banking Worth It? appeared first on Mergers & Inquisitions.

Unfortunately, there is a ton of confusion about what these PCA groups do, how they fit into other teams, and the long-term career prospects they offer.

And while these groups are not “new,” they have become a lot more prominent in the post-2020 period.

That means many people are asking questions about them but not necessarily finding solid, consistent answers.

So, in this feature, I’ll explain the main points, sort out the confusion, and explain whether they’re a good fit for you:

What is the Private Capital Advisory (PCA) Group?

Private Capital Advisory Definition: The Private Capital Advisory group at investment banks advises Limited Partners (LPs) on selling their stakes in private equity funds and advises PE managers (General Partners) on selling their assets to continuation funds; some groups may also advise managers on primary transactions (i.e., raising capital for new funds).

The PCA group is another product group at investment banks, like Equity Capital Markets, Debt Capital Markets, or Leveraged Finance.

The difference is that they advise on very specific transactions that all involve private equity firms.

At most banks, the PCA group works on secondaries deals that involve stakes in existing PE funds and portfolio companies, but in some cases, both primaries and secondaries professionals are under the PCA label (or a close variation), but in separate teams.

For example, in PJT’s Park Hill group (now called “Fund Advisory”), the “Private Capital Solutions” team executes secondaries, while the “Private Equity” team does primary deals.

This article focuses on secondaries and assumes that they are the PCA team’s main responsibility.

Within the secondaries space, there are LP-led and GP-led transactions, which were defined in the previous secondaries PE article.

LP-led secondaries happen when Limited Partners want to sell their stake in an entire existing PE fund (or funds) due to liquidity needs, portfolio rebalancing, or a strategic change:

In most cases, these LPs hire investment bankers to run a sale process to maximize pricing; as in any other sell-side M&A deal, the bankers earn success fees based on the deal value.

GP-led secondaries happen because a GP may want to retain specific portfolio companies for longer than the traditional holding period due to their quality or growth potential (or, more cynically, the inability to exit).

To do that, they set up “continuation funds,” also known as continuation vehicles or CVs, to cash out their existing Limited Partners and replace them with new LPs:

In most cases, the GPs hire bankers to run this continuation fund process.

However, the goal is a bit different because in these deals, the GP is both a buyer and a seller.

The GP sells the asset to a new fund to report an exit and distribute profits to its LPs… but it also rolls over its Accrued Carried Interest into this new continuation fund, so it wants a reasonable price and deal terms.

It’s similar to a management rollover in a traditional LBO model.

What Bankers Do, and Why Continuation Fund Deals Are Hard to Price

To understand the mechanics, consider a simple example.

Let’s say that a PE fund invested $100 million in a company, and 5 years later, it has marked this investment at a 3.0x multiple of invested capital (MOIC).

Therefore, it’s now worth $300 million, and the investment profits are $200 million.

If the fund’s Carried Interest is 20%, the GP’s Carry is $40 million.

This is Accrued Carry because it has not yet been distributed, as the PE fund has not sold this portfolio company.

If the PE fund wants to retain this company past the normal holding period, it might set up a continuation fund, in which it is expected to roll over 100% of its Carry (which becomes a standard equity stake in this new fund).

If a new CV is set up, and the entire $300 million is sold to this fund, the GP would roll over the $40 million in Carry, which is ~13% of this new fund’s capital (significant).

The bankers in this deal play a delicate act with the pricing because:

• The GP does not want the asset to be priced too low because the selling LPs would then get a worse result and record underwhelming performance.
• But it also doesn’t want too high a price because that might make it difficult to earn a solid multiple in this new CV over the next ~5 years.

So, bankers must “maximize pricing” while also leaving room for upside in the next holding period.

It’s like the balancing act in IPOs, where bankers want to price a company for a modest “pop” on the first trading day while leaving room for price appreciation after that.

Why Have Private Capital Advisory Groups Grown So Rapidly?

PCA groups have grown quickly because private equity secondaries deal volume has also grown quickly (20% CAGR between 2015 and 2025).

Deal volume has grown due to the desire to hold onto top-performing assets, a poor exit environment, and record fundraising by secondaries firms.

One additional factor is that both GP- and LP-led secondaries deals are often viewed as recession-resistant because:

• In good markets, GPs use continuation funds to retain businesses with solid performance and preserve access to their future upside; in bad markets, GPs use continuation funds when they can’t sell.
• In good markets, LPs often sell their stakes in PE funds to rebalance their portfolios; in bad markets, LPs often need liquidity and are willing to sell their PE stakes at discounts.

There’s consistent supply and demand for LP-led deals, and many funds are sitting on “paper gains” that need to be realized within the next few years.

Private Capital Advisory (PCA) vs. Financial Sponsors Group (FSG) vs. Private Funds Group (PFG) vs. Private Capital Markets (PCM)

There is a ton of confusion here because of these groups’ similar names.

The first three (PCA, FSG, and PFG) all advise private equity firms, but each one works on different types of deals.

The Financial Sponsors Group (FSG) advises PE firms on everything from initial portfolio company acquisitions to add-on acquisition financing to portfolio company exits.

It might also work on GP- or LP-led secondaries, but it does not focus on them, and if the bank has a dedicated PCA group, it will hand off execution to that team.

The Private Funds Group (PFG) advises General Partners on primary deals (raising new funds) rather than secondaries.

The deal experience is completely different, as it’s closer to what you might do at a PE fund of funds, with higher-level analysis and more process and sales work.

Then there’s Private Capital Markets (PCM), which advises private companies on raising debt and equity.

It’s like ECM, DCM, or LevFin, but specifically for private companies, such as VC-backed startups, rather than large/public companies.

These PCM teams are completely different because they do not directly advise PE funds (at most, there may be some indirect involvement from the investors).

The Top Banks for Private Capital Advisory

The elite boutiques tend to have the best PCA teams because they have strong relationships with financial sponsors, and most continuation fund deals do not require debt financing or refinancing, as the existing debt tends to stay in place.

Therefore, the bulge bracket banks’ Balance Sheets give them less of an advantage.

Evercore, PJT, Lazard, and Jefferies have the top groups, and Evercore has been at the #1 spot in the league tables with the largest PCA group for a long time:

Firms like Moelis, Perella Weinberg Partners, and Guggenheim also participate, but tend to rank lower in the list.

Bulge brackets, such as GS, MS, and UBS, also have teams but do not focus on this market to the same extent.

Among the middle-market banks ex-Jefferies, firms such as William Blair, Baird, Houlihan Lokey, and Piper Sandler are also quite active in this market.

A few independent placement agent firms, such as Campbell Lutyens, also have secondaries teams with strong deal flow.

Other names include Eaton Partners (now owned by Stifel), Sixpoint Partners (now owned by Harris Williams), Rede Partners, and Fairview Capital; they’re all placement agents for new funds but sometimes also advise on secondaries.

It’s difficult to “rank” firms by LP-led vs. GP-led deals since most work on both, but some firms specialize in one area.

For example, PJT has traditionally performed better on the LP side, while Lazard is more of a leader on the GP side.

Also, LP-led deals vary widely in size and can be as small as $20 – $30 million, which means that smaller, independent firms advise on them more frequently.

The Deal Experience: LP-Led vs. GP-Led Deals

GP-led deals are similar to standard M&A processes, so you spend time building models, creating data rooms, drafting CIMs, and responding to due diligence requests from potential buyers.

The main differences are:

1. Models are often less granular, especially for multi-asset deals.
2. But they may have additional features not seen in normal M&A deals, such as waterfall schedules for the new continuation fund (e.g., 10% Carry above a 8% Net IRR, 15% above 15%, and 20% above a 20% Net IRR with a full GP Catch-Up in each tier).
3. It’s often a more collaborative process because the Financial Sponsors Group and industry teams may also be involved, and you’re often working from the GP’s existing models and documents.

LP-led secondary deals are much different from standard M&A processes because there’s little to no modeling, and most of your time is spent ensuring the correct documents are uploaded, pricing is recorded correctly, etc.

For example, if an LP is selling stakes in 20 different PE funds, you must contact all 20 GPs and collect the correct documents from them.

This sounds easy, but many will respond slowly or not at all because they do not care about these processes. So, it becomes a game of aggressive follow-up and sorting through disorganized documents and responses.

One final point here is that secondaries deals often “flow in” from other groups.

For example, if a PE firm owns a tech company currently marked at a 3.0x Gross MOIC, it might hire a bank’s Tech or TMT groups to run a sale process.

As the process continues, the company continues to perform well, and the PE firm thinks it might be able to get a higher price if it holds the company for another few years.

So, it stops the sell-side M&A process and explores a continuation fund instead.

At this point, the TMT team might hand off the deal to the PCA team, provide the materials they’ve already developed, and let the PCA team add details to illustrate the continuation fund mechanics.

Salaries, Bonuses, and Hours

At the Analyst through VP levels, compensation is similar to standard investment banking salaries and bonuses.

It’s almost impossible to find data on senior-level compensation specifically in the PCA group, but if I had to speculate, the top bankers might earn more than in other groups because this has been such a high-growth area.

The hours and work/life balance range from “Somewhat better than standard IB hours” to “The same as banking.”

It depends on the group’s culture and whether you focus on LP- or GP-led deals (expect the standard M&A experience for GP-led groups).

If you’re in more of an LP-led secondaries advisory team, the hours might be 10 – 20% better than normal, but compensation will also be lower, especially as you advance (due to lower fees).

Recruiting into the Private Capital Advisory Group

The recruiting process is similar to the one for any other IB team: Your chances improve with a target university or MBA program, a high GPA, relevant internships, networking, and interview prep.

One difference is that since secondaries require specialized skills, it helps a lot if you’ve had previous experience at a secondaries PE firm, a fund of funds, or a Limited Partner that invests in PE, such as a pension or sovereign wealth fund.

If you don’t have any of that, activities, certificates, or classes can also demonstrate interest.

Private Capital Advisory groups also make lateral hires, typically from other industry or product groups within the bank or from secondaries PE firms or funds-of-funds teams.

It’s not usual to move from direct private equity back into investment banking, but it’s more common to move from a buy-side secondaries role to a sell-side PCA group since the skill sets and compensation are closer.

In terms of interview questions, all the standard IB technical questions are fair game, so you still need to know accounting, valuation, and basic M&A and LBO modeling.

Your story will come up, as will the “Why secondaries?” question and the normal strength/weakness/team questions.

Beyond that, it is worth learning something about LP- and GP-led secondaries, including the key fund metrics and typical case studies.

Complex modeling tests are unlikely in entry-level roles – you won’t be asked to complete a multi-tier waterfall – but they could assess your fund-specific technical knowledge.

Exit Opportunities

If you have focused on LP-led secondaries, traditional buy-side roles will be an uphill battle because you won’t have the relevant deal and modeling experience that most firms seek.

You could potentially move to a secondaries investment firm, but there’s still a disconnect because in buy-side LP-led secondaries, you do more modeling and valuation work.

Therefore, the most viable exit opportunities are investor relations and fundraising roles at PE funds, funds of funds, and related investment firms.

Exit opportunities are broader for GP-led roles, but in most cases, you’ll still get better results by working in a strong industry group or M&A team.

Because of the collaborative nature of many GP-led deals, the industry team or the GP might do the “heavy lifting” on the operating model – so you may get less exposure to the small details that set companies apart.

If you do move into direct private equity or growth equity, you will likely have to target small-to-middle-market firms to maximize your chances.

The more likely exit options are deal/investment roles at PE secondaries firms, funds of funds, co-investment firms, or LPs.

Corporate development is theoretically possible, but might be difficult because CD teams tend to favor industry specialists who have worked mostly on traditional M&A deals.

Is the Private Capital Advisory Group Right for You?

The best parts of working in the PCA group are that it’s one of the highest-growth areas in investment banking and that certain GP-led secondaries might give you more interesting and challenging deals to work on.

The worst parts are that your exit options are more limited than in other groups, and you might not get much traditional modeling/deal experience (depending on your group’s focus).

I would “rank” Private Funds Groups and teams that do mostly primary deals on par with groups like ECM or DCM: Better hours/lifestyle, but not ideal in terms of skills, exit opportunities, or long-term compensation.

A PCA group focused on LP-led secondary deals is better, but it’s still not a huge improvement because it’s mostly process work.

So, I would not recommend these groups over solid industry or M&A teams at the large banks.

If it’s a PCA group that focuses on GP-led secondaries, it’s a much closer call because it’s more similar to the standard M&A experience.

I still wouldn’t accept a PCA offer over one from GS TMT or MS M&A, but it would be competitive with offers from other proven teams at the large banks.

It might not win based on the ease of exits into direct private equity, but it would still be a bright spot in an industry that’s not exactly known for optimism.

The post Private Capital Advisory: “M&A Lite” or the Highest-Growth Area in Investment Banking? appeared first on Mergers & Inquisitions.

If you’re not familiar with it, Industry follows several university graduates who start working in sales & trading and investment banking at JP Morgan “Pierpoint & Co.” in London.

Over the seasons, they get promoted, switch firms, change careers, and struggle with challenges ranging from office politics to porn and cocaine addictions.

I’ve written reviews of the previous seasons, but the show has changed significantly between Season 1 (2020) and Season 4 (2026).

On the positive side, it has become a more exciting, dramatic series that’s closer to shows like Succession or Breaking Bad.

On the negative side, it’s now quite far removed from reality, so you won’t necessarily learn much about finance careers by watching.

This will be a “spoiler light” review in which I’ll describe story elements without attributing them to specific characters or revealing anything major.

But if you want to go in completely blind, you should probably not read this:

The Short Version: Watch Industry, But Don’t Take It Too Literally

Here is my TL;DR version:

• I recommend the show, and I agree with the IMDB consensus that the later seasons become a lot more entertaining.
• The best parts are the character development, the acting, and the “vibe realism” (it gives you a good flavor of the finance work environment, even if the details are off).
• The worst parts are some illogical/rushed writing and drama winning out over realism, especially in later seasons. Also, Season 1 did not quite grab me right away.
• If you want to learn about the finance industry (mostly sales & trading and hedge funds), Seasons 1 and 2 are the best; if you want more of an exciting, prestige drama, Seasons 3 and 4 are better.
• Seasons 3 and 4 do not necessarily “jump the shark,” but they do get into territory far outside the original premise.

Industry’s Journey from Season 1 to Season 4

In Season 1, the show follows several entry-level recruits at Pierpoint: Yasmin Kara-Hanani (wealthy nepotism hire), Harper Stern (aggressive non-target hire), Robert Spearing (working-class Oxbridge graduate), and Gus Sackey (polished/wealthy Oxbridge graduate).

The senior staff at the bank play supporting roles; examples are Eric Tao (sales MD), Bill Adler (Head of FICC), and Rishi Ramdani (head execution trader).

The initial drama is about which recruits will receive full-time return offers based on their performance, networking, and macro factors.

Season 2 follows these characters as they move up the ladder and deal with a possible consolidation of Pierpoint’s NY and London offices.

To survive, the London-based staffers need to bring in serious new business, which means catering to the whims of a hedge-fund titan (Jesse Bloom) and getting more involved in U.K. politics.

Season 3 is mostly about Pierpoint executing an IPO for a renewable energy company (Lumi) and how different characters play that.

Some are “along for the ride” (they do the deal to earn the fees), some bet for or against it, and some use it to reveal troubling information about Pierpoint itself.

Finally, Season 4 moves far beyond Pierpoint, as new characters join and existing ones have switched firms or careers.

The main story is about a shady/fraudulent fintech, Tender, and how the characters navigate the situation as it goes on an acquisition spree.

Some join the company in executive roles, while others bet against it and try to make money by shorting the stock.

Wait, So Does Industry “Jump the Shark”?

The early seasons of Industry are somewhat grounded.

Yes, there are too many sex-and-drugs scenes, and characters get away with things that would get them fired in real life (mis-booking trades and lying about them, consistent insider trading, etc.), but it’s mostly in “It’s a TV show, so I can accept it” territory.

But in later seasons, the show progresses to events such as:

• People getting shot in their homes by organized criminals.
• Entire firms collapsing and being bailed out or acquired in fire sales.
• Foreign spies infiltrating companies and setting up money-laundering schemes.
• Jeffrey Epstein/Ghislaine Maxwell-style stories emerging and characters turning to their “services” for extortion purposes.

Some will say, “Well, these things happened in real life! They’re not that crazy.”

However, fiction must be consistent with the world it establishes for itself, not with real life.

Yes, sex trafficking happens in our world, but should it really be part of a show that was originally about workplace conflicts on the trading floor?

These issues didn’t ruin the show for me, but they may detract from it if you’re watching to learn more about finance.

The Best Parts of Industry: Characters, Acting, and “Vibe Realism”

Industry has excellent production values, but my favorite parts are the characters and the acting.

You can’t take the stories too literally (see above), but the show does a great job illustrating the types of people you meet in finance.

Initially, characters like the two leads (Harper and Yasmin) come across as unlikable and not especially interesting.

But as the seasons progress, they develop and become far more interesting, even though no one on the show is “likable.”

For example, Harper starts out seeming like a huge cheater who faked her academics to get into the industry.

She also makes many mistakes on the job and is rescued several times.

But she also comes up with some “creative” ways to win clients and make profitable trades, and she uncovers serious fraud through her short-selling activities in later seasons.

You also learn more about her past and family background, which informs a lot of this.

Much of what she does is unethical or outright illegal, but it’s in the service of a greater purpose, which makes her character a lot more interesting.

Most of the acting is also excellent, and I was especially impressed by Kit Harington as Sir Henry Muck in Seasons 3 and 4.

He plays a fatally-flawed-but-still-idealistic aristocrat who gets pulled into several “shady corporation” schemes, and he delivers an outstanding performance that far exceeds anything he did on Game of Thrones.

Finally, Industry does a great job with “vibe realism.”

The specific details of trades and deals are not accurate, but you still get a great sense of the work environment at a bank.

In the early seasons, there’s a lot of banter and “side talk” on the trading floor, and you can pick up on key jargon by turning on the subtitles.

The Worst Parts of Industry: Drama vs. Realism and Illogical/Rushed Writing

It’s easiest to explain this issue with a high-level example.

In Season 4, some of the characters are at a short-only hedge fund that is betting heavily against Tender, the shady/fraudulent fintech firm.

They raise capital for their fund based on this idea and then establish the position.

Then, they do a ton of investigative research, including a physical trip to Ghana in one episode and some on-site visits in the U.K.

As they’re doing this, the company’s fortunes and share price fluctuate in response to announcements and interactions with the government.

This story is dramatic but also highly unrealistic because the order of operations is wrong.

No hedge fund would raise capital based on a single idea and then start trading before they have done serious research; it would be like starting construction for a new building and then drafting a blueprint for it.

They also fail to consider other critical elements in a stock pitch, such as proper catalysts, position sizing, and risk relative to the portfolio as a whole.

In another episode, a fraudulent-and-under-siege company makes an acquisition offer for another firm to “hide” its illicit activities.

Yes, these things have happened in real life, but in the show, this offer comes right after the news breaks publicly about all the acquirer’s issues.

No legitimate company would even entertain this offer when the entire market is debating the acquirer’s solvency.

In short: The show is so technical that you will probably not understand everything unless you have a finance background…

…but if you do have that finance background, you’ll also be scratching your head at some of the story choices.

Illogical/Rushed Writing

On this second point, the main issue is that there’s a “consequence mismatch” with many characters.

For example, with one of the troubled/fraudulent companies in Seasons 3 and 4, the government needs a “fall guy,” so they blame everything on the newly installed CEO.

OK, fine.

But then his wife, who also worked at the company in an executive role, and several other people close to the scandal, get away with everything and just reinvent themselves a few months later.

In another case, the writers bring back a character who had been forced out of his job and taken a huge payout, only to be… forced out again due to another scandal, without adding much to the story.

Much of this feels contrived; it’s like the writers decide who’s in the show and who needs to exit, and then they write story consequences around real-life logistics.

Also, I think the later seasons needed more time to breathe.

They try to fit in so many exciting twists and turns that there’s not enough time to watch for logical conclusions and reflections.

My Final Thoughts on Industry

I’ll wrap up this review with two final thoughts.

First, I can nitpick the finance details and the plot holes all day, but I was still highly engaged with the show, looked forward to it each week, and thought about it afterward.

So, in today’s bleak landscape of AI slop and assembly-line “content,” Industry stands head and shoulders above 90% of other shows.

Second, I am looking forward to Season 5, but I’m also glad it will be the final one.

You can use the phrase “up or out” to describe the finance industry, but it also applies to the characters in this show.

The journey up or out is interesting, but there’s only so much the writers can do once the characters arrive at their destination.

And if this show went to Season 10, we might be getting plots about bankers defusing nuclear bombs or riding ICBMs by the end.

The post Industry (HBO): Review of Season 4 and the Entire Series So Far appeared first on Mergers & Inquisitions.

Yes, recruiting is competitive and hyper-accelerated, and most students are lucky to get even one offer.

But some students do get multiple offers and need a way to decide.

Most of the advice in the original article stands, but the desirability of different banks has changed over time.

Also, the even earlier recruiting process means you have less time to decide, with a longer time lag between your decision and the start of your internship:

The Key Points When Deciding on Investment Banking Summer Internships

These factors are always important, regardless of the macro environment and overall hiring:

• People – Did you like everyone you met? Do you have a strong connection with a senior banker there? Are there alumni, friends, or family pulling for your success?
• Location – It’s better to start in a major financial center (NY or London, and, for some candidates, Hong Kong) because they have more jobs and networking opportunities.
• Bank Reputation Inside Finance – Is it a bulge bracket, elite boutique, middle market, or regional boutique? Within each group, is it in the upper or lower tier? For example, a GS or JPM offer is quite different from a UBS offer, even though they’re all, technically, “bulge brackets.”
• Bank Reputation Outside Finance – If you want to work at a Fortune 100 company or do something outside of finance in the future, you’ll have a better chance with a brand-name bank on your resume.
• Group Reputation and Deal Flow – You have the best chance of winning private equity offers in the future if you work in a strong industry team, M&A group, or Leveraged Finance group. ECM and DCM limit your eventual exit options, and deals tend to be less interesting.
• Generalist vs. Specialist – If you work in a group like healthcare, consumer retail, or TMT, you’ll be able to apply for a wider variety of roles than you would from a specialized team, like FIG, Oil & Gas, or Real Estate.

There are a few other points worth considering, but they’re more difficult to evaluate:

• Full-Time Offer Conversion Rates – It’s better to work in a group in which 90% of the interns receive full-time offers vs. one where the conversion rate is only 50%. However, this is difficult to evaluate reliably, especially 1 – 2 years in advance (group dynamics often change significantly in short periods).
• Long-Term Compensation Potential – Traditionally, elite boutiques paid the most, bulge brackets paid the next most, middle markets paid less, and regional boutiques paid the least. This is still kind of true, but with more nuance. For example, specific EBs, such as PWP and Centerview, now pay substantially more than the others, but mostly at the Associate level and beyond.

The long-term compensation potential of the firm matters a lot more if you plan to stay in banking for at least 5 – 10 years.

If not, earning different amounts as an Analyst or Associate won’t make a huge long-term difference.

Investment Banking Summer Internship Offers: What’s New in the 2020s

You should think about these points as “Factors that are subject to change over time”:

• Bank Rankings and Overall Appeal – In many cases, individual banks matter more than their overall categories. For example, most people still consider Jefferies a “middle-market bank,” but it advises on larger deals than any other MM bank and now earns higher fees than firms like UBS and DB.
• Optionality is More Important – Midway through the 2020s, we’ve already seen massive disruptions from COVID, Ukraine, AI, interest rates, and more. Traditional “exit opportunities,” such as direct private equity, have become less appealing, while others, like private credit and secondaries, have moved up the ladder. Therefore, it’s not a great idea to commit to a specific career path or industry at an early stage.
• Not All “Financial Centers” Are Equal – Since Brexit and the full Chinese takeover of Hong Kong, London and HK have become less appealing relative to New York, assuming you have the option of working in either place. HK is much less accessible to non-Chinese candidates, while London-based roles pay less, offer unclear exit opportunities, and have less deal flow than NY.

Investment Banking Summer Internship Offer Decisions, Round 1: Civil War

To illustrate the process, I will cover a few examples of what to do when you receive multiple offers.

The decisions in this first section are mostly about offers from banks within the same tier.

For example, does Bulge Bracket 1 beat Bulge Bracket 2?

How much do location and group factor into that decision?

If you have multiple offers for the same industry group in the same location, which one is best?

Goldman Sachs Industrials (Chicago) vs. UBS Leveraged Finance (NY)

Leveraged Finance is arguably the strongest group at UBS, and NY is a better location than Chicago in terms of recruiting, networking, and exit opportunities.

But I would still pick GS without hesitation because it has always been substantially better than UBS across all metrics, and a slightly better location cannot make up for this difference.

Jefferies Healthcare (SF) vs. Deutsche Bank ECM (NY)

Deutsche Bank is still, technically, a bulge bracket, but it consistently earns lower IB fees than Jefferies and often advises on deals in the same size range (or smaller).

Plus, ECM is not an ideal group for skill development and exits, while Healthcare is one of the top groups at Jefferies, making Jefferies the clear winner here.

And yes, it’s better to start in NY than SF, but it doesn’t make up for the other factors here.

Wells Fargo Industrials (Charlotte) vs. BMO M&A (NY)

Wells Fargo is much stronger if you go by the league tables and fees, and Industrials is a solid group there.

However, I think NY vs. Charlotte is a much bigger difference than NY vs. Chicago or NY vs. SF, so I would recommend BMO in this case.

Also, many recruiters might still view WF and BMO as being “on par” with each other, based on older information/sentiment that hasn’t quite caught up to the current landscape.

Rothschild Restructuring (London) vs. Evercore M&A (NY)

This one depends on where you want to be in the long term.

Rothschild is viewed as an elite boutique in Europe, while Evercore is an EB in both North America and Europe.

So, if you want to be in Europe long-term or prefer credit/restructuring deals, pick Rothschild; otherwise, pick Evercore.

Nomura Generalist (London) vs. Jefferies Generalist (London)

I would give Jefferies the edge here because it advises on far more IB deals globally and has a much stronger presence in both Europe and the U.S.

If the Nomura offer were in Asia, and certainly if it were in Japan, this would be a much closer call.

JP Morgan Off-Cycle Generalist IB Internship (London) vs. HSBC Full-Time DCM Analyst (London)

Clearly, JPM has a much better reputation and exit opportunities, but I would pick HSBC in this case because it’s a real full-time offer.

EMEA off-cycle internship conversion rates are often quite low, so you’re taking quite a chance by turning down a full-time offer to accept an internship.

I am not a fan of DCM, but in my view, having a true full-time offer beats almost everything.

Guggenheim Generalist (NY) vs. Solomon Generalist (NY)

I’m listing this because people seem confused about these firms’ categories.

There is some debate over whether Guggenheim qualifies as an “elite boutique,” but it tends to advise on larger deals than Solomon Partners (formerly PJ Solomon).

Solomon Partners is a good firm, but it is more of a middle-market bank and not an elite boutique.

Guggenheim is a step down from Lazard, Evercore, etc., but all else being equal, I would still pick the Guggenheim offer here.

Deutsche Bank Generalist (NY) vs. Rothschild Tech (Boston)

I would pick Deutsche Bank because of the location (U.S. vs. Europe and NY vs. Boston) and because, as a generalist, you can keep your options open and aim for one of its top groups.

RBC Tech (SF) vs. William Blair Tech (SF) vs. FT Partners (SF)

None of these firms is a bulge bracket or elite boutique. RBC is more of an “In-Between-a-Bank,” William Blair is a middle-market firm, and FT Partners is an industry-specific boutique.

So, based on that alone, I would pick RBC for its name, size, and reputation.

Also, both WB and FTP are quite specialized in specific deal types or industries, which would concern me vs. a more “generalist” bank.

RBC Public Finance (NY) vs TPH Energy (Houston)

Tudor, Pickering, Holt & Co. (TPH) is an energy-focused investment bank based in Houston, and it’s now owned by Perella Weinberg Partners (PWP).

In this case, I would pick TPH because public finance is really not ideal for transferable skills, lateral moves, or exits.

Also, TPH’s ownership by PWP gives it a huge leg up and means you may be able to move to other regions and groups more easily.

Investment Banking Summer Internship Offer Decisions, Round 2: Bulge Brackets vs. Elite Boutiques

These decisions are tricky because there isn’t necessarily a “better” firm, as the top BB and EB banks are on par with each other.

Goldman Sachs FIG (NY) vs. Bank of America M&A (NY) vs. Lazard Generalist (NY)

Even though FIG is quite specialized (and therefore limits your skills and exits), I would still recommend GS in this case because the GS FIG team is viewed differently and has a stronger track record for Analysts moving into generalist teams/firms.

You can still get pigeonholed, but it’s quite different from FIG at most other firms.

That said, you could still make a case for Lazard if your long-term goal is to stay in IB.

Citi M&A (NY) vs. PJT Restructuring (NY)

I would pick PJT here because it’s the top group at an elite boutique in an ideal location.

You could argue for Citi if you want to consider non-finance careers in the future.

Morgan Stanley Healthcare (SF) vs. Evercore Life Science (Menlo Park) vs. Perella Weinberg Partners Generalist (NY)

I would lean toward PWP here because of the location and the generalist nature.

If you’re interested specifically in healthcare PE or biotech VC roles, one of the others might win (MS vs. EVR is “coin flip” territory).

Perella Weinberg Partners Tech (SF) vs. Barclays Generalist (NY)

Most people would say PWP “outranks” Barclays, but I would pick the Barclays offer because of its location and generalist nature.

True, tech is not very specialized, but you’d still orient yourself more to tech and TMT roles.

But the location is the main issue: NY easily beats SF in terms of recruiting/networking/exits.

Evercore Tech (Menlo Park) vs. Morgan Stanley Tech (Menlo) vs. Goldman Sachs TMT (NY) vs. PJT M&A (NY)

GS TMT is commonly known as one of the top groups in IB, so it’s the obvious choice. The NY location also helps with recruiting and networking.

The more interesting question is the #2 pick in this case.

I would probably lean toward PJT mostly because of the location, but if you’re certain you want to stay in tech/TMT or on the West Coast, EVR vs. MS is a coin flip here.

MBA Summer Associate Offer: JP Morgan Tech (NY) vs Evercore Tech (NY)

This one is tricky because at the MBA level, you are unlikely to win traditional exit opportunities.

So… it depends on your long-term goals.

If you want to stay in banking, Evercore wins because of all the benefits the EBs offer these days.

If you want to exit to a corporate role or something else outside of pure finance, JPM wins because of its brand name and reputation in the wider world.

More About Investment Banking Summer Internship Offers

For more about this topic, including how to recruit for and succeed in IB internships, we recommend these articles:

• Investment Banking Internships: The Ultimate Guide
• How to Get an Investment Banking Internship
• The Off-Cycle Investment Banking Internship: The Best Side Door into the Industry?
• How to Prepare for Your Investment Banking Summer Internship in Less Than 8 Hours

Investment Banking Summer Internship Offers: More Questions?

And if you have questions about your own IB offer decisions, feel free to ask away in the comments.

No, I can’t tell you which bank has an 81.5% conversion rate and which one has a 72.3% conversion rate, but I will attempt to answer reasonable questions.

The post Investment Banking Summer Internship Offers: How to Decide appeared first on Mergers & Inquisitions.

The 2020s have been a bit of a rollercoaster ride for investment banker salaries and bonuses.

In 2021, booming SPAC activity, 0% interest rates, and COVID-inspired deals boosted fees and hiring to absurd levels…

…but then compensation fell back down to earth as interest rates rose and the world normalized in 2022 and 2023.

Then, 2024 and 2025 seemed like a return to form, with M&A deal volume up 20%, 30%, or even 50% in some regions; investment banking fees rose 10 – 30% in each year.

Unfortunately, that didn’t translate into significantly higher compensation for Analysts and Associates; most of the benefits went to senior bankers.

Based on end-of-year 2025 bonuses, total compensation rose ~5% for Analysts and Associates, 10 – 15% for VPs and Directors, and ~25%+ for MDs:

NOTE: All numbers are pre-tax for New York-based front-office roles and include base salaries and year-end bonuses but not signing/relocation bonuses, stub bonuses, benefits, etc.

These are roughly the 25th to 75th percentile ranges across the “large banks” (i.e., excluding 5-person regional boutiques).

And yes, some elite boutiques paid above these ranges (more on that below):

What Happened to Deal Activity and Investment Banker Salaries and Bonuses Last Year?

I always start by looking at the total investment banking fees by region and M&A deal volume by region:

Investment Banking Fees by Region and Annual Growth Rates:

M&A Deal Volume by Region and Annual Growth Rates:

M&A deal volume in dollars was up by almost 50% worldwide (some estimates say it’s more like 35 – 40%), but investment banking fees rose by only 10 – 20% in most regions.

I can’t say exactly why this happened, but it’s likely because:

1. Capital markets activity increased by much less than M&A deal volumes in most regions (5 – 10%).
2. Much of this M&A activity was for speculative mega-deals that may not close. And if the deal doesn’t close, banks do not get paid (much).
3. In some regions, there is fee compression due to competition and more deal work being done internally at companies.

Interestingly, tariffs – which everyone freaked out about in the middle of the year – did not end up mattering that much, though they may have killed a few deals.

The uncertainty around them, the constant policy flip-flops, and the general incompetence around their execution also factored in.

The Fed reduced short-term interest rates slightly, and CPI inflation fell very slightly, but I don’t think these played a big role.

I would argue that the increased deal activity had more to do with lax antitrust enforcement by the Trump administration and continued AI hype than anything else.

But if investment banking fees rose by 10 – 20%, and global M&A deal volumes were up by 40 – 50%, why did average Analyst and Associate compensation rise by only 5%?

The simplest answer is that it’s still an employers’ market, so firms can pay junior bankers almost anything they want.

Banks are willing to pay up for rainmaking MDs who can generate significant fees, but it’s no longer 2021, when banks needed a lot of junior employees to grind through deals.

The increase in M&A deal volume was heavily weighted toward a small number of mega-deals, which tend to be more efficient from a Revenue / Employee perspective.

Also, hiring in peer industries (Big Tech, management consulting, law, etc.) is terrible, so banks do not feel much pressure to increase compensation.

Specific Trends in Investment Banker Salaries and Bonuses

Looking at ~200 data points on salaries and bonuses for this year, a few trends stood out.

First, yes, some of the elite boutiques pay higher bonuses, but this is mostly visible at the Associate and VP levels and above.

For example, Perella Weinberg Partners (PWP) and Centerview (CVP) are well-known for paying Associates $50 – $100K+ more than the ranges quoted above.

Unlike the bulge brackets, they also pay these bonuses in 100% cash.

But at the Analyst level, total compensation was much closer to normal at these firms and other elite boutiques:

• From what I could tell, firms like Lazard, Evercore, and Moelis paid top-ranked Year 1 Analysts nearly the same total compensation as the bulge brackets (e.g., $180 – $195K range). PWP also appeared to be in this range.
• Top-ranked Year 2 Analysts at the EBs earned above the $225K top-end of the Analyst range above, but these were mostly 10 – 15% differences (e.g., $250K total compensation).

Some banks also pay very different amounts depending on your “bucket” (e.g., top-ranked vs. upper vs. middle vs. bottom), but this varies widely by firm and level.

Another notable trend is that bonuses do not necessarily have much to do with the deal flow, reputation, or “ranking” of the bank.

For example, Bank of America is normally viewed as a “mid-tier bulge bracket,” but for some reason, it seems to pay awful bonuses to mid-level bankers while treating Analysts and MDs well.

For example, BofA apparently paid some Year 3 Associates bonuses in the $110 – $150K range, while most other banks paid in the $200K – $300K+ range.

Meanwhile, a few seemingly “random” banks, like Santander, paid quite well for New York-based roles.

—

I’ll comment more on these trends below, but here’s a quick reminder of the main compensation components if you haven’t read these reports before:

Investment Banker Salary and Bonus Levels: The Main Components

For most bankers, there are five main components to “compensation”:

• Base Salary: This is what you earn via paycheck or direct deposit every two weeks. These numbers tend to stay the same for years and then move up periodically at the Analyst and Associate levels. At most banks, these were last adjusted in 2022.
• Stub Bonus: Since Associates graduate from MBA programs and start working in the middle of the calendar year, they receive “stub bonuses” for their first ~6 months on the job. These are similar across banks and might be ~$35 – $50K, depending on the region.
• End-of-Year Bonus: You earn this after your first full year of work. Analyst bonuses are 100% cash, but a percentage shifts to stock and deferred compensation as you move up. For example, Associate and VP bonuses might be 20 – 30% deferred, while MD bonuses could be 30 – 50% deferred.
• Signing/Relocation Bonus: This applies to Analysts and Associates who graduate and accept full-time offers; like the stub bonus, it’s usually a small percentage of your base salary.
• Benefits: Finally, you’ll get health insurance, vacation days, and participation in the firm’s profit-sharing or 401(k) retirement plans. In Europe, this one mostly takes the form of “more vacation days” since healthcare is government-funded via higher taxes.

Investment Banker Salary and Bonus Levels: Analysts

Since most Analysts start working in the middle of the calendar year after graduation, the numbers here are based on mid-2025 payouts.

We estimate the top end of the range at $225K, but some Year 2 Analysts at elite boutiques earned above that, with a few at bulge brackets joining them.

Year 3 Analysts are a rare species these days because most banks now promote Analysts after two years, but compensation at that level seemed to be in the $200 – $270K range.

If we say the midpoint of Analyst total compensation is $195K, it’s a ~5% increase over the midpoint of last year’s range.

That’s not terrible, but it is disappointing given the 10–20% increase in IB revenue.

Investment Banker Salary and Bonus Levels: Associates

I gave a few sample numbers for Associates to illustrate the massive spread, with bankers at firms like PWP and CVP potentially earning $100K+ more than those at the bulge brackets.

Bonuses at this level are normally 60 – 70% of base salaries for Year 1 Associates, but this rises to ~100% (or more!) at many firms by Year 3.

The elite boutiques pay even more than this, and some even pay 100% cash bonuses.

For firms that do not pay 100% cash bonuses to Year 2 and 3 Associates, the split tends to be 70 – 80% cash, with the rest deferred or paid in stock.

You should expect more variable bonuses as you move up, starting at the Associate level.

Investment Banker Salary and Bonus Levels: Vice Presidents

I found a decent amount of VP-level compensation data this year, so I am more confident of the ranges here.

At this level, bonuses tend to be ~100% of base salaries initially, rising to 200% or 250% of base salaries for Year 3 VPs.

Again, the EB banks will pay at the top end or even above it, while firms like BofA seem to pay well below this (maybe with exceptions for top performers).

Investment Banker Salary and Bonus Levels: Directors

It’s almost impossible to find accurate data on bankers at this level, but I found a few examples pointing to a ~15% increase, which explains my $700K – $900K range above.

But I would not be surprised if some Directors at elite boutiques earned above that, perhaps into the $1M range.

Investment Banker Salary and Bonus Levels: Managing Directors

Managing Director compensation tends to correlate most closely with investment banking fees and deal activity.

Their bonuses are literally percentages of the fees they generate, so the sky’s the limit in a great year, while $0 bonuses are possible in a terrible year.

The $1M – $2M compensation range above is for “Junior MDs” who are still getting up to speed on execution and clients.

More experienced MDs could earn above that, and Group Heads who do well could earn even more, perhaps into the $5M+ range.

That said, the “average MD” does not earn in that range; sources like the WSJ have studied this and found median annual compensation in the $1 – 2 million range over multiple decades.

(And yes, that means that inflation-adjusted pay hasn’t increased much.)

Expect 30 – 50% of bonuses to be deferred or paid in stock at this level.

Regional Differences and London Numbers

Unfortunately, no one seems to publish solid compensation reports for London anymore.

But from what I can gather, you should expect a 15 – 30% discount to NY compensation numbers there.

If base salaries progress from £70K to £90K, a reasonable total compensation range for Analysts might be £100K to £150K, or roughly $135K to $200K USD (assuming a 1.35x GBP/USD).

It seems like Associate base salaries go from £115K to £135K as you advance, with bonuses at 80 – 100% of base salaries.

This would equate to a total compensation range of around $280K to $365K USD at the same 1.35x FX rate.

I do not have numbers for Asia, Australia, or other regions, but feel free to chime in if you do or know of good sources for them.

What Does This Mean for Future Investment Banker Salary and Bonus Levels?

In the 2025 report, I predicted that bonuses would change by +10% to –10%, which is close to what happened.

I’ll be more specific this year and predict that bonuses will be flat at most levels.

Why?

First, I think at least a few of the mega-deals signed in 2025 will fall apart due to regulatory, antitrust, or geopolitical factors.

IPO activity for 2026 will be stronger, driven by companies like SpaceX and OpenAI, but that won’t be enough to offset lower M&A advisory fees.

Also, there’s a moderate chance the AI bubble will start to deflate as more investors ask questions about massively higher CapEx spending by Big Tech.

Lower stock prices and more “questions asked” tend to make companies more cautious and less likely to execute large deals.

In last year’s report, I also mentioned that it was tough to make a strong case for the bulge bracket banks over the elite boutiques, at least based on long-term compensation and promotion opportunities.

That is still true, but I’ll be even more specific: Bank-specific differences within each category matter a lot more now.

Specific EBs, such as PWP and CVP, now seem to pay significantly more than the others.

Meanwhile, some of the “weaker/borderline” bulge brackets, such as UBS, appear to pay mid-level bankers more than “stronger” ones, such as BofA.

The decision-making process becomes a giant branching tree when you account for all these factors.

And the more twists and turns bonuses take on their rollercoaster ride, the more branches get added to that tree.

The post 2026 Investment Banker Salary and Bonus Report: To the Senior Bankers Go the Spoils appeared first on Mergers & Inquisitions.

“Reneging is generally not a great idea and has the potential to cause serious problems in the future, but it can work in specific cases.”

But it’s no longer 2010, the entire recruiting landscape has changed, and so have my views.

If you get a substantially better job offer, reneging on an existing/worse offer is probably in your best interest.

There are risks, including the possibility of losing both job offers, but most people tend to overstate them by relying on anecdotal horror stories.

This article will focus on reneging on a job offer at a bank or financial services firm. I can’t speak to how it differs in tech, healthcare, or other industries.

My views have changed over the past ~15 years because:

• It’s clear that banks and other large employers do not care about you. They never really cared, but they did a better job of maintaining the façade a long time ago. Banks will rescind offers, award exploring offers, ghost you, and lay off entire teams without warning, so why should you be loyal to them?
• The undergrad recruiting process has accelerated so much that it is very difficult to judge the first offer you get and your chances of receiving a better one. You can blame banks for this comically early process (see above).
• I have never seen any evidence that a “Blacklist” exists for candidates who renege on job offers. But perhaps it’s out there in a vault somewhere, along with the aliens, UFOs, and 9/11 conspiracy theories.

What Does “Reneging on a Job Offer” Mean?

Reneging on a Job Offer Definition: “Reneging” means that you interview at a company, formally accept a job offer with a signed written contract, and then win a better job offer elsewhere and revoke your original offer.

This definition is specific because I’ve seen some confusion about what “reneging” means.

None of the following counts as reneging:

• Getting an informal or verbal offer, not accepting it, and then ghosting the company or telling them you changed your mind.
• Receiving a written offer, not signing it, and then telling the company you changed your mind.
• Advancing far into an interview process and then dropping out before you receive an offer.
• Interviewing, receiving a job offer, and then losing it because the company withdraws or revokes the offer. This is known as a bank “rescinding a job offer” and happens for different reasons.
• Accepting an offer, starting a new job, and then quitting early in your term to start a different job (this is called “quitting your job”).

If you think about the logistics of reneging on a job offer, you’ll realize it makes sense in only a few situations.

First, the start date should be far away, such as several months or 1 – 2 years into the future.

If you accept an offer for a job starting next week, you cannot possibly win a “better” offer in that time frame.

Second, it makes sense mostly if you’re in a competitive, high-tension situation, in which firms interview many similar candidates in roughly but not exactly the same time frame.

The best example is the undergraduate-level process for investment banking summer internships, which takes place over a few months and is conducted for roles that start well in advance (e.g., interviews in Winter 20X6 for Summer 20X7 roles).

Reneging makes less sense in off-cycle processes that drag on for months because it’s difficult to win multiple job offers quickly.

Finally, reneging makes sense mostly if the new job offer is substantially better in terms of firm name/reputation, compensation, team, or location.

There are still risks associated with reneging, and they’re not worth taking for a ~5% better offer.

Why Renege on a Job Offer?

The most obvious reason to renege is that you receive a much better job offer, but you’ve already signed a weaker offer due to timing or terms (e.g., it was an exploding offer).

For example:

• Your original offer was at a middle-market bank, but you keep interviewing and win an offer at Goldman Sachs, Morgan Stanley, or Evercore.
• Your original offer was for the satellite office in Houston, but you have no interest in oil & gas investment banking, and you win a better offer from a generalist group in New York.
• Your original offer had a base salary with no guaranteed bonus, but your new offer has a 50% higher base salary and a guaranteed bonus.
• You won a back or middle-office offer, but your new offer is for a front-office role working with clients or doing investment research.

There are also “borderline” and weak cases for reneging:

• Borderline: Reneging on an offer from a firm like UBS or Barclays to go to a stronger bulge-bracket bank (GS, JPM, MS) makes some sense, but may not always be worth the risk.
• Weak: Reneging on an offer from one middle-market bank to go to another one with a better reputation or in a better location is questionable. I would not recommend it in most cases.

The Consequences: How Bad Is It to Renege on a Job Offer?

So, what could happen if you renege on a job offer to accept a new, better one?

The worst-case scenario is that you lose your new offer because the original firm gets annoyed, someone calls your new firm, and they don’t approve.

This is possible but not that likely, especially if you follow the correct protocol when continuing to interview and eventually reneging (see below).

Another consequence is that you could potentially get in trouble with your university or business school. Many career centers say they “do not allow” reneging or “frown upon it.”

So, in theory, they could ban you from using the career and on-campus recruiting services.

But this risk is overstated because if you win an IB internship at a top bank and perform well, you won’t have to go through on-campus recruiting again.

And if you change your mind and pursue a completely different career, you can still win job offers via networking.

Remember that career centers are most concerned about their relationships with employers.

They want major employers to be happy, and they want at least X students to win solid offers each year.

However, they do not care about your specific, individual results or what is best for you as a person.

Also, many career centers do not understand that recruiting has become a cutthroat process, like The Hunger Games in cubicles.

One final consequence is that if you renege, you could damage your relationships with the alumni and academic/family/professional connections that helped you win the original job offer.

This is the most serious potential long-term problem, but I can’t say how severe it is because it depends on how you won the offer.

Industry-wide or multi-firm “blacklists” do not seem to exist, so don’t worry about them.

Similarly, a firm will not sue you or take other legal actions for reneging on a job offer; it would be a ridiculous waste of time and money.

How to Renege on a Job Offer

Let’s say that you’ve won an internship or full-time job offer, but you’re not completely satisfied.

You had to accept and sign the offer because it was exploding or because you weren’t sure of your other prospects, but you continue to interview around.

If you want to do this and potentially renege on this first job offer when you win a better one, I recommend the following:

1) Disclose to the interviewers that you’ve already accepted and signed an offer elsewhere. The goal is to make sure they are OK with you potentially reneging on this first offer before continuing with their process. Your existing offer will only make you more attractive since you have been validated by others (similar to dating).

2) If you win a better offer and renege, CALL the first firm to deliver the news ASAP and keep it vague (e.g., “I’ve received an offer at another firm that I could not turn down”). Do not mention the specific firm name, but don’t lie and say you had to drop out for personal reasons. Do not put anything in writing because emails can be forwarded.

I realize that no one under 40 uses their phone for voice calls anymore, but this is one case where you really should.

3) Do not tell anyone else you’re reneging. Yes, they will find out eventually, but don’t mention it even if you’ve already said you accepted the original offer.

4) Do not update your LinkedIn or other online presences until you’re literally about to start the job. The “Incoming Summer Analyst” title on LinkedIn is ridiculous and unnecessary if you have already accepted the offer.

What Makes Reneging on a Job Offer More or Less Acceptable?

I cannot tell you the exact percentage chance that “something bad” will happen if you renege.

But you should think about the overall risks, timing, and context:

If you renege quickly after getting your offer, and it’s a year or more before the start date, that presents less risk than waiting and doing it a month before your internship begins.

There’s also less risk of personal/career blowback if you won the original offer mostly via online applications without much networking or many personal connections involved.

Finally, there’s less risk if you renege when you’re going through a structured/on-cycle process with exploding offers and deadlines because there’s a clear rationale for reneging there.

Special Cases for Reneging on a Job Offer

I will mention a few special cases before wrapping up.

First, we have limited data on reneging on job offers at the MBA level.

However, it’s probably more difficult because recruiting takes place closer to summer internships, and it’s a more personal process with many alumni participating.

You could potentially renege in lateral recruiting, but it would probably be viewed unfavorably because of the protracted process and extensive networking required.

Also, the immediate or “near-term-ish” start dates make the logistics less feasible.

In theory, on-cycle private equity recruiting might be an ideal setting for reneging on job offers because of the process speed and the far-in-advance start dates.

But I think it might be too fast and too demanding.

If you do well, you might get “stuck” at one firm’s office all day during the interviews, so you might not even have a chance to interview at similar PE firms.

The tight clustering of interviews at a small number of firms makes it more difficult than in IB summer internship recruiting.

Reneging on a Job Offer in Investment Banking: Final Thoughts

Going back to the original 2010 article, I used to think of reneging on a job offer as a “niche topic.”

Some people cared about it, and some students did it prolifically, but the average person was just happy to get a single internship or full-time job offer.

But because of the changed environment, including super-early start dates and banks not following any “rules” in recruiting or hiring, reneging has become a broader topic.

My view is that you should always do what is best for you, provided it does not pose a catastrophic risk.

If banks recruit interns almost two full years before internships begin, give exploding offers, and constantly change their hiring plans, they should be prepared to accept the consequences: A higher percentage of candidates will renege on job offers.

So, rather than asking whether it’s “OK” to renege, ask yourself:

1. Which offer is best for your long-term goals? Remember that the bank, school, etc., do not care about you.
2. And can you accept that offer and renege on another one that you’ve accepted without much risk?

If so, go right ahead and renege.

And if you’re still worried, keep in mind that anyone upset about your actions will either forget or be at a different firm by the time you start working.

The post Reneging on a Job Offer in Investment Banking: Power Play or Career Suicide? appeared first on Mergers & Inquisitions.

…or a bubble waiting to burst, like the ones in private credit, AI, and maybe the entire U.S. stock market.

But both can be true at the same time.

Private equity secondaries have done well partially because other areas, such as traditional/direct private equity, have performed poorly in the 2020s.

Secondaries used to be a niche market, but they have exploded in popularity:

(Source: Evercore Private Capital Advisory Report)

So, this article will explain the entire secondaries industry, from what they do to careers, deal types, salaries, recruiting, exit opportunities, and more:

What Are Private Equity Secondaries?

Private Equity Secondaries Definition: PE secondaries firms raise capital from Limited Partners (LPs) and buy stakes in existing PE funds or specific assets owned by those funds, with the goal of eventually selling these stakes to realize a high return.

“Secondary” means “buying in the after-market.”

If you buy new shares that a company issues in an IPO, that is primary investing because you are buying a new ownership stake and directly giving the company your money.

But if you buy existing shares from another investor, that is secondary investing because no new ownership stake is created, and the company does not get any money from you.

Within the buy-side, secondaries firms exist for traditional leveraged buyouts, growth equity, venture capital, infrastructure, and real estate, but they all follow the same plan of raising capital to buy stakes in existing funds and assets.

The differences lie in their returns targets, industries, strategies, and value-creation methods.

Effectively, secondaries firms may act as both General Partners (GPs) and Limited Partners (LPs) because they can invest in both specific assets and entire funds.

Private equity secondaries groups used to sit within funds of funds, but the strategy has grown so much that most sources now recognize them as a standalone asset class.

Why Invest in Private Equity Secondaries?

If you’ve read the previous private equity funds of funds article on this site, you might have a simple question:

“I understand why a sovereign wealth fund, pension, or insurance company might want to invest in new private equity funds, but why would anyone want to invest in existing funds that have already made investments?”

The short answer is that the market exists because of the sellers.

PE funds are structured as closed-end, illiquid vehicles, so a pension fund can’t sell a 5% stake in KKR North America Fund XIV in the same way it can sell shares in an ETF; its capital might be locked up in the KKR fund for 10+ years.

But institutional investors sometimes need to sell their stakes early for different reasons:

The Denominator Effect

When public markets decline, valuations are immediately visible. Stocks fall 10%, 20%, or 30% in real time, but PE fund valuations update only periodically – and sometimes optimistically.

As a result, private equity may become overweight relative to public holdings. If an investor targets 30% private and 70% public exposure, but the mix shifts to 35% / 65%, they may be obligated to sell PE stakes through the secondary market to rebalance.

Strategy or Leadership Changes

A new CIO or Head of Investments may review a firm’s entire portfolio and sell non-core or legacy positions. Investment mandates can shift geographic, sector, or return targets, all of which might trigger secondary sales.

Underperforming or Legacy Assets

LPs may sell fund stakes if they believe performance will lag or if the GP is now focused on a region or strategy that no longer aligns with their allocation view.

Meanwhile, the buyers have their own motivations.

For example, secondaries allow new buyers to gain exposure to a diversified portfolio across strategies, sectors, vintage years, geographies, and GPs, while reducing uncertainty.

After all, they already know what the PE fund’s portfolio contains; it’s not like investing in a brand-new fund, where there’s no information on any of the companies.

Buyers also reduce some of the normal risk because they enter later in the “J-Curve,” after the fund has invested most of its capital and is starting to reap the gains:

Many secondary deals are also done at discounts to Net Asset Value (NAV), which can create “bargain purchase” opportunities for buyers.

Finally, the median IRR and the standard deviation of returns are often stronger in secondaries for these reasons.

Just look at this data from the CAIS Group on the performance of traditional PE vs. secondaries:

Sure, the top buyout and VC funds outperform the top secondaries funds, but most LPs do not have direct access to them.

Why Has Private Equity Secondaries Deal Volume Grown So Rapidly?

In 2025, secondary market transaction volume surpassed $226 billion, up from roughly $26 billion in 2013, representing a CAGR of ~20%.

(Source: Evercore Private Capital Advisory Report)

This happened for a few reasons:

• The Exit Environment Has Been Poor: PE firms have continued to deploy capital, but exit activity has lagged due to inflation, higher interest rates, and weaker IPO and M&A markets. So, distributions relative to NAV are near historic lows, and LPs that rely on them for specific obligations, such as pension payments, increasingly turn to the secondary market to generate liquidity.
• GPs Want to Hold Their Strongest Assets Longer: Before secondaries, GPs often had to sell great assets just to improve their Distributions to Paid-In Capital (DPI) and close funds on a proper timeline. But “continuation funds” changed this dynamic, allowing GPs to retain their best companies for longer while still offering liquidity to LPs.
• Secondaries Firms Have Raised Record Capital: Large secondaries specialists and multi-strategy PE firms have raised significant capital, so transaction volume has grown as they’ve had to deploy this capital.

Types of Secondaries Strategies

The main strategies relate to acquiring stakes in existing funds vs. existing assets/companies, but there’s a bit more to it than that:

LP-Led Transactions (Buying/Selling Stakes in Existing Funds)

A traditional secondaries deal involves purchasing LP interests in full PE funds or baskets of funds.

For example, the Abu Dhabi Investment Authority no longer wants its 5% stake in KKR North America Fund XIV, so it sells it to GIC in Singapore.

These deals are called “LP-led” because the Limited Partners initiate them, often due to liquidity concerns.

For example, an endowment facing operating shortfalls might have to sell its stakes in several PE funds to generate cash proceeds.

In these deals, a single fund interest might represent exposure to dozens of underlying portfolio companies.

GP-Led Transactions (Buying/Selling Stakes in Specific Assets via Continuation Vehicles)

GP-led deals involve purchasing stakes in specific assets held by an existing fund. These transactions typically involve 1 – 10 assets but may include larger clusters.

They are labeled “GP-led” because these deals are usually initiated by the GP, or the Partners at the PE fund, who want to retain specific assets longer.

To do the deal, the GP forms a continuation fund or continuation vehicle (CV), which purchases the selected assets from the original fund.

The LPs roll over their stakes into this new CV or sell them to new LPs that buy into this CV.

Direct Secondaries (Minority Stakes in Assets)

In these deals, institutional investors purchase minority stakes in companies, often in venture-backed startups or growth-stage firms.

The main distinction is that the companies’ ownership does not change significantly; the majority owners remain the majority owners, while some minority shareholders are replaced.

These deals are most common for funding employee liquidity or cashing out early-stage VC investors who want to exit.

Private Equity Secondaries vs. Secondary Buyouts vs. Direct Secondaries

Adding to the confusion is that many other transaction types in finance have the word “secondary” in them.

Private equity secondaries refer to the strategies described in this article (buying/selling stakes in entire existing funds or assets).

Secondary buyouts refer to deals in which one PE fund sells a portfolio company to another PE fund.

This is an exit strategy since it results in a new/different firm paying for the company.

Finally, direct secondaries refer to the sale of minority stakes in companies through tender offers or negotiated transactions, enabling employees and VCs to cash out before an IPO or M&A deal.

While these are technically secondary deals, they are usually viewed in a separate category because VC and growth equity firms tend to execute them.

Why Build and Launch a Private Equity Secondaries Course?

Given the industry growth and the factors above, we thought it made sense to create and launch a new Private Equity Funds of Funds and Secondaries course a few months ago.

It’s a growing market with expanding hiring needs, and companies of all types are staying private longer.

This means financial sponsors need alternative paths to liquidity, which drives even more demand for secondaries.

And while there are dozens (hundreds?) of courses for investment banking, private equity, and real estate, secondaries resources are quite rare.

Students have sent us interview questions and case studies from top firms over the years, but nothing brought together all the points coherently and presented quantitative work and full case presentations.

You can find books and courses that present the qualitative aspects of PE funds and secondaries, but these are not enough to make it through the most rigorous final-round interviews.

Secondaries roles tend to be quite specialized and require different skills than standard PE roles.

It’s a bit like Project Finance, where modeling fundamentals (cash flows, multiples, credit stats, etc.) still matter but are applied quite differently.

The Top Firms in the Secondaries Market

You can divide the market into a few categories based on the size, strategy, and diversification of firms:

Traditional Private Equity Firms

Most private equity mega-funds and many upper-middle-market PE funds have their own dedicated secondaries groups.

The list includes Blackstone, Carlyle, CVC, Apollo, TPG, Ardian, and Warburg Pincus, and some of these focus heavily on GP-led transactions – especially the single-asset deals that closely resemble traditional leveraged buyouts.

Independent Secondaries Specialists

This list includes firms like Coller Capital (acquired by EQT), Lexington Capital, and Pomona Capital.

They tend to do a mix of LP- and GP-led transactions.

Funds of Funds and Multi-Product Platforms

Example firms here include HarbourVest, Neuberger Berman, Pantheon, Adams Street, StepStone, Hamilton Lane, LGT, and Partners Group.

In addition to the LP- and GP-led transactions, these firms also make co-investments and primary investments in new PE funds.

You could also put the asset management groups at some of the top banks, such as Goldman Sachs and JP Morgan, in this category since they operate dedicated secondaries teams.

Pension Funds and Sovereign Wealth Funds

Large pensions and sovereign wealth funds, such as CPPIB, GIC, and the Middle Eastern funds, are also major players in the secondaries market.

Since these funds are large LPs themselves, they often benefit from scale and win deals more easily, as many GPs want to work with them to build relationships.

Private Equity Secondaries: A Day in the Life

So, if you start working in one of these secondaries firms or groups, how does the day-to-day job differ from what you might do in traditional PE?

At a high level, it’s quite similar: You source and execute deals, monitor existing investments, and manage deal flow.

The main difference is that the-supply-and-demand dynamics differ because there’s a constant flow of interest in ownership stakes between LPs and GPs.

You won’t do nearly as much “sourcing” because the capital available to fund deals is still constrained vs. the volume of potential, sellable assets.

In traditional PE, the demand for high-quality deals far exceeds the supply, so Analysts and Associates spend inordinate time looking for the needle in the haystack.

But at secondaries firms, you get a list of all the needles, and you decide which ones are the sharpest.

The other big difference is that the process varies significantly in LP-led vs. GP-led deals:

LP-Led Transactions

In an LP-led transaction, you might underwrite stakes across several funds – for example, 10 funds that collectively hold 200 underlying companies.

You cannot build full LBO models for all 200 companies, so you’ll spend your time evaluating the most important positions that account for the majority of NAV.

A typical pattern for this set of 200 companies might be:

• ~20 companies representing ~80% of NAV ? You’ll do a deep dive on these, including due diligence, models, and valuations (either simple or in-depth).
• ~180 companies ? You’ll set up simplified models that project the Gross MOIC for each investment based on historical trends, simple valuation multiples, and the GPs’ commentary.

It’s almost like a credit role, where you must quickly understand a lot of deals and decide what matters.

For each company, you’ll review the GP’s information, assess the historical growth/margin/cash flow trends, find valuation multiples in the sector, stress-test different cases, and assess the business plan.

It’s a lot, but since you’re evaluating dozens or hundreds of companies, making a mistake with a single asset may not hurt overall performance by much.

GP-Led Transactions

In GP-led deals, the process is much closer to that in traditional private equity because you tend to analyze a single company or a small set of companies in detail.

This means building models using the full financial statements, operational KPIs, market research, and management forecasts.

One added dimension is alignment assessment.

Specifically, the GP initiating the deal must demonstrate that it truly believes in the potential upside of the asset(s); it’s not doing the deal because it “can’t sell” the company.

So, as a secondary investor, you’ll pay special attention to points such as:

• GP Carry Rollover into the new continuation vehicle (are they confident enough to roll over all their accrued investment profits so far?).
• GP cash commitment levels.
• Management rollover of existing equity stakes.

If the GP presents a business case in which the company’s valuation could increase by 2x or 3x, the new LPs expect to see material participation to back these claims.

Private Equity Secondaries: Salaries, Bonuses, and Fees

Secondary funds’ fees are lower than traditional PE fees, so total compensation also tends to be lower.

Fees are lower because investors in secondary deals must still pay management fees and carried interest (typically 2% and 20%) to the GPs they invest in.

This creates a double-fee situation, so the secondary managers reduce their fees to compensate. Typical secondary fund economics are:

• Management Fees: ~1% of committed capital (vs. ~2%+ in traditional PE)
• Carried Interest: ~10 – 15% of investment profits (vs. ~20%+ in traditional PE)

As a result, base salaries tend to be similar, but bonuses are lower.

Estimated compensation ranges for U.S.-based roles as of 2026 are as follows:

• Analyst: $100K – $150K
• Associate: $125K – $250K
• Senior Associate / AVP: $200K – $400K
• Vice President: $300K – $500K
• Principal / SVP: $500K – $800K
• Managing Director: $500K to just above $1M+

The spreads are wide because compensation depends on:

• Size and brand name/reputation of the platform
• Whether the firm sits inside a larger PE firm, such as one of the mega-funds
• Strategy mix (GP-led vs LP-led)
• Geography

For example, in a secondaries team within a large PE fund, a post-IB Associate might earn close to the total compensation of an Associate in direct private equity (e.g., $300K total, or an approximate 10 – 15% discount).

But at a smaller, independent firm, total compensation might be in the $150K – $200K range.

One advantage is that carried interest may be more favorable.

Since secondaries funds often invest in mid-cycle portfolios, many investments are realized in 3 – 5 years rather than 5 – 7+ years.

Therefore, carried interest often arrives earlier and on a more predictable schedule than in buyout or growth equity funds.

Private Equity Secondaries: Hours and Work-Life Balance

The hours follow the compensation patterns:

• Secondaries Team within a Larger Firm or PE Mega-Fund: Expect standard PE hours, such as 70 – 80+ per week, and possibly even more when a deal is closing.
• Secondaries Team at an Independent Firm or Funds-of-Funds Platform: Expect more like 50 – 60 hours per week, with spikes due to live deals. This is closer to the lifestyle in direct lending or diversified credit.

The overall workload intensity is lower than in traditional PE because:

• Due diligence windows are shorter (they need decisions in weeks, not months).
• Processes are more standardized.
• There’s far less “hunting” for deals.
• Portfolio risk is diversified.

Secondaries Recruiting: How to Break In

Secondaries firms strongly prefer candidates with analytical, modeling, and deal experience, so the best backgrounds are:

• Traditional Investment Banking: Especially in strong industry groups, Leveraged Finance, and Restructuring.
• Private Capital Advisory: This is the “sell-side version” of secondaries investing that exists at many banks.
• Private Equity and Funds-of-Funds Roles: These transitions are less common, but it is possible to move from direct PE to secondaries as well. Making a move from a FoF role is trickier and depends on your deal experience with individual companies.

Moving in from Big 4 Transaction Services is also possible if you’ve worked with private equity firms.

Consulting and equity research backgrounds are not ideal because you won’t have the same type of deal experience that bankers and PE professionals do.

You can get in straight out of undergrad, especially at:

• Secondaries arms of mega-funds that run Analyst programs.
• Larger FoF platforms with rotational Analyst roles.

But, as with joining a traditional PE firm right out of undergrad, this may not be the best idea because doing investment banking first gives you more optionality.

The recruiting process and timing depend on the firm’s size.

You’ll see on-cycle recruiting more often at secondaries teams inside of larger PE firms and off-cycle recruiting more often at independent/smaller firms and funds of funds.

Private Equity Secondaries Interview Questions

All the standard PE interview questions about accounting, valuation, LBO mechanics, market/firm knowledge, and paper LBOs could come up in secondaries interviews as well.

So, please refer to the original private equity interview article for example questions in these categories.

A few secondaries-specific questions are as follows:

Q: Why secondaries instead of direct private equity?

A: Because you want to evaluate both individual companies and entire portfolios, and you like the mix of targeted analytical depth and broad exposure.

If you’re interviewing for a GP-led platform, you can also point to similarities with buyouts and the appeal of closing multiple deals across different industries (rather than spending months on a single deal that falls apart, as is often the case in direct PE).

Q: Why do secondary deals happen?

A: This one goes back to the “motivations” section above:

• Sellers: Often motivated to sell by the denominator effect, liquidity needs, and changes in strategy.
• Buyers: Motivated to buy stakes in existing funds and companies for diversification, earlier cash flows, J-Curve mitigation, and reduced uncertainty.

Q: Do you prefer LP-led or GP-led deals?

A: You could make a case for either deal type; it just depends on your experience and career goals.

For example, if you prefer GP-led deals, you could say you want to spend most of your time analyzing individual assets in detail and take an active role in structuring deals rather than being a more passive investor.

If you prefer LP-led deals, emphasize that you want broader exposure across multiple industries and geographies, and that you like the diversification and risk-adjusted returns you can earn by investing in established PE funds.

Q: How do you price ownership stakes in PE funds and specific assets?

A: Everything is based on the Net Asset Value (NAV), which represents the Fair Market Value (FMV) of the relevant assets minus Accrued Carried Interest.

In other words, you ignore what has already been realized (sold and paid out) and focus on just the unrealized portions.

The FMV is based on the Equity Value of the asset(s) and the PE fund’s ownership.

So, if a company’s Enterprise Value is $1 billion, it has Net Debt of $300 million, and the PE fund owns 50%, the FMV is ($1 billion – $300 million) * 50% = $350 million.

The FMV depends on factors such as the company’s performance, leverage, and its current valuation marks, which are determined by the GP and linked to sector valuation multiples.

A Discount or Premium is normally applied to NAV based on the points above, the GP’s track record, and the fund’s vintage year.

Buyers typically expect to pay between 90% and 100% of NAV for assets with solid performance, but a deal could be executed at a premium to NAV as well.

Exit Opportunities

In theory, you could move to a traditional private equity or growth equity fund, but in practice, it’s quite difficult because you’ll be up against current and former bankers aiming for the same roles.

You work on deals at secondaries firms, but you focus on investment execution and do not gain much operational experience at portfolio companies, so your skill set is not fully transferable.

Your chances improve if you have done GP-led work at a well-known platform fund, like Blackstone or Apollo, but even then, you’ll probably have to aim for middle-market or smaller funds to maximize your chances.

In reality, many professionals at large secondaries firms tend to stay there because they would earn less at smaller PE funds, and the overall industry has been performing well.

More common/realistic exit paths include:

1. Pensions and Sovereign Wealth Funds – Secondaries skills translate almost directly into the skill set required for LP underwriting, and these groups value the modeling, portfolio evaluation, and manager selection experience you gain in secondaries.
2. Funds-of-Funds Roles – If you want better work-life balance and solid-but-somewhat-lower pay, private equity funds-of-funds roles could work.
3. Other Private Markets Strategies – There are many other PE fund-adjacent roles that align well with secondaries experience, such as NAV lending, GP stakes investing, and fund-level preferred equity investments.

Should You Work in Private Equity Secondaries? Pros and Cons

In our view, private equity secondaries careers are comparable to those in areas like direct lending, mezzanine, real estate private equity, and infrastructure private equity.

These are all considered “buy-side roles,” but they have lower fees than direct PE firms and hedge funds, are more specialized, evaluate deals differently, and offer improved work-life balance in exchange for reduced compensation.

But if you want a formal pro/con list:

Pros

• Strong compensation, especially at the larger firms.
• Carried interest is smaller but more predictable and faster to realize.
• Exposure to many different deals and industries.
• Hours are often better than in traditional PE.
• The market is projected to grow more quickly than the overall PE industry.

Cons

• The skill set is quite specialized, and you will get pigeonholed if you stay too long. So, direct PE exits become more challenging the longer you stay.
• Compensation can be lower, especially at smaller secondaries firm and funds of funds.
• You’re removed from portfolio management and sourcing work, which might be positive… but this also limits your options if you target other buy-side roles or go the corporate route.
• The long-term outlook is unclear, as secondaries became a “hot” field only recently, and no one knows how closely linked they are to direct PE firms and deals.

The last point is probably the most important one.

Yes, secondaries careers are similar to ones in credit investing and specialty PE roles, but the uncertain outlook is the added dimension.

If deal volume keeps accelerating, that could be great for you.

And if not, well, please consult that “exit opportunities” list above.

The post Private Equity Secondaries: The Full Guide to Deals, Careers, Salaries, and Exits appeared first on Mergers & Inquisitions.

But it has been a very “eventful” first year of a new U.S. administration, whether you judge it by laws passed, executive actions, cover-ups, geopolitics, trade, or the kidnapping of foreign leaders.

So, I thought it might be useful to do a quick review of the Trump administration so far.

As some readers pointed out in the 2024 election article, my track record of predicting specific events and policies has not been great.

But that’s an even better reason to write this type of review: What went as expected, what did not, and, based on that, what might happen next?

Ground Rules: I will cover only topics related to jobs, financial markets, and deals, so I’m not going to get into Venezuela, Iran, Israel/Palestine, Ukraine, Greenland, the Epstein files, vaccines, abortion, ICE, etc.

Yes, I know that you may care deeply about these topics, but I don’t know enough to feel comfortable writing about most of them, and I don’t want to turn this into a novella.

My Summary of Year One of the Trump Second Term

My quick, unfiltered thoughts are:

• While Trump went more aggressively on tariffs and immigration than I was expecting, I believe my overall prediction was accurate (“Considering everything above, Trump’s victory is probably a slight positive for deal activity, markets, and finance compensation, but less so than his 2016 win.”). This original article was quite skeptical of his policies and possible big-picture macro changes, and this skepticism was warranted.
• Trump’s policies of looser regulation, looser anti-trust enforcement, and constant tech/AI boosting have increased M&A and capital markets deal activity (see below) and probably helped headcount and compensation at banks. The tariff debacle caused a temporary blip, and stricter immigration policies have also hurt things, but the net effect of everything is slightly positive.
• The “real economy” is weak and, at best, “mixed.” Yes, GDP growth looks good, but wage growth is poor, and blue-collar employment has fallen since Trump took office, despite promises that tariffs would bring back manufacturing jobs (source). Also, while inflation is down, prices have not fallen, and everyone is still outraged about the cost of living.
• Healthcare costs are also a disaster, partially due to expiring subsidies, but you may not experience this directly unless you buy a plan independently outside of employer-provided coverage.
• The “One Big Beautiful Bill” mostly maintained the status quo from the 2017 tax law, with a few modest changes to the treatment of tips and overtime pay and cuts to Medicaid spending. But this was mostly a non-factor in terms of jobs, deals, and markets. However, in the long term, it will make the deficits even worse, leading to more money printing and inflation (whether in asset prices or real life).
• The most surprising development was Trump’s bromance with Jensen Huang and his constant AI pitching. I expected some of this due to Elon Musk’s involvement in the campaign, but not quite to this extent. Effectively, Trump is betting the entire U.S. economy on data center and GPU spending, which is… pretty risky, even if it’s allegedly responsible for the majority of GDP growth. I also expect there will be a backlash due to AI-attributed job losses, the bubble bursting, or both.
• The bottom line is that, based purely on economics, the Trump second term is going poorly so far. Yes, it’s benefiting the tech/finance bros, but that’s not enough to win elections or popular support. Unless normal people start earning and saving more, this administration will go down as a failure.

There are some signs that Trump recognizes these issues, which explains why he’s pivoted in a more populist direction with the proposals to cap credit card interest rates, block institutional ownership of homes, and buy mortgage bonds to lower the cost of homeownership.

But even if he’s serious about these ideas, they will take a long time to implement and make an economic impact.

The Trump Second Term: Deals and Financial Markets

With this topic, we must think about two main points:

1. Was something directly within the administration’s control, or was it more of a broad macro factor?
2. If it was within presidential control, did Trump’s actions affect things in a specific way? Or was it more of a default/status quo situation?

For example, the Fed cut interest rates 3 times in 2025, but Trump had no direct control over these decisions.

Sure, he’s currently trying to bully Jerome Powell into slashing rates even more via a ridiculous “criminal investigation,” but rate decisions are made by the 12-person Federal Open Market Committee (FOMC).

As another example, I would put the “One Big Beautiful Bill” in the “default/status quo” category.

Yes, Trump influenced its passage, but it mostly maintained the rules from the 2017 tax bill.

It did change Medicaid spending and the taxation of tips and overtime pay, but those are unlikely to directly affect deal activity.

It also hurt renewables by eliminating many clean-energy tax credits, but that’s just one sector among dozens.

In my opinion, the four most important areas in which Trump had an outsized influence and resulted in a specific market outcome are:

1) Lighter Anti-Trust Scrutiny – Initially, some people thought the FTC might block or challenge more deals, but that turned out not to be the case (good summary here). There is still more deal scrutiny than under Trump I or Obama, but less than under Biden. This explains much of why M&A deal volume rose to $4.5 trillion, with a record number of mega-deals worth more than $10 billion:

2) DOGE Failure and Continued Massive Deficits – As most predicted, Elon Musk and his team’s efforts to cut government spending did not go well. Yes, they reduced the federal employee headcount by ~9%, but overall spending still rose over 2024 levels. To seriously reduce the deficit, the government would need to cut entitlement spending (Social Security, Medicare, and Medicaid) and defense spending.

They could probably find and cut fraud with more time/effort, but the total amount is likely in the $100 – $300 billion range vs. ~$7 trillion in spending.

3) Tariff Storm – The “Liberation Day” tariffs in April 2025 caused immediate financial and economic panic. You can even see their exact implementation date on a monthly payroll growth graph:

Trump later backtracked and used these wildly random tariffs as a negotiating ploy with various countries, but job growth did not recover.

Tariffs introduced a ton of uncertainty into the financial markets and probably postponed or killed some deals in the process, especially for manufacturing-oriented companies.

But mega-deals seemed to recover after the initial shock, especially since most of them were in other sectors (tech, media, and natural resources).

4) AI Boosterism – This one is harder to quantify, but Trump made a series of decisions that boosted Big Tech and other AI-adjacent companies, from allowing Nvidia to sell its H200 chips in China to attempting to curb state-level AI regulations.

This led to over $425 billion in VC deals, with over 50% going to AI companies.

It also produced some controversial deals, from Meta acquiring Manus (geopolitical issues) to Nvidia acqui-hiring Groq (structured as a “licensing deal” rather than a true acquisition).

Overall, these events and policies produced higher M&A deal volume and solid financial market performance.

But I would also point out that international markets, gold, and silver all greatly outperformed the U.S. in 2025.

So, you could argue that outside of deal activity, most of Trump’s actions have benefited investors in other countries and asset classes.

Immigration and Work Visas

I mentioned in my 2024 election article that I doubted that Trump would do much about legal immigration, such as for H-1B visas and the OPT program for international students at universities in the U.S.

And… that turned out to be wrong.

The administration attached a $100K fee to H-1B visa applications to discourage companies from using this visa for “cheap labor,” but not for anyone applying from within the U.S. (source).

So, this change will affect tech workers from India who want to move to the U.S., but I’m not sure it will directly impact international students currently in the country.

More concerning are potential changes to the OPT program, which allows international students to stay in the U.S. and work for 12 months after graduating (with a 24-month extension for STEM majors).

But it’s not quite clear what the administration wants to do here.

Any attempt to end the program would generate significant pushback from universities, but they could restrict it or limit it to STEM majors (for example).

The bottom line is that the path into finance careers for international students is much more uncertain than it used to be.

Unfortunately, I don’t have answers or advice on what to do, since we don’t yet know exactly what is happening.

The Trump Second Term: Jobs and the Real Economy

Up until literally the past week, Trump has proposed almost nothing to improve jobs, income, or costs for “normal people” outside the tech and finance bubbles.

Sure, you could argue the tax bill helped by allowing for more deductions and tax-free income, but this is tiny compared with the cost-of-living increases and poor wage growth.

So, this section is more about what Trump has failed to do so far but could potentially do in the future.

Three ideas would be:

1. Attack Healthcare Costs – Yes, this is a complex problem because there are insurance companies, government programs, pharma companies, hospitals, nursing homes, doctors, etc., but a few changes could make a big difference. For example, standardize all prices based on Medicare rates and eliminate or restrict the useless middlemen in the system, such as pharmacy benefit managers (PBMs). Ask Mark Cuban for more about this one!
2. Break Up Big Companies – You won’t like this idea if you’re in finance or investment banking, but consolidation in many sectors has driven up prices. It’s not the only cause of inflation, but it is one that the government has more direct control over, at least in certain cases. For more on this topic, see all of Matt Stoller’s work – you may not agree with him, but you will at least see things a bit differently.
3. Build More Homes – Finally, homes are far out of reach for most people in their 20s or 30s today. I realize that real estate is mostly a regional/local issue, but Trump could probably do something at the federal level to incentivize developers to build and sell more homes. For example, increase tax incentives for homebuilders or offer federal funds to states and cities in exchange for local zoning reforms.

Oh, and instead of applying seemingly random tariffs, use them selectively to target industries in which U.S.-based companies can compete.

I’m not universally opposed to tariffs, but they should be more of a “precision weapon” than a machine gun.

Some of these ideas would hurt deal activity and investors… but that’s kind of the point.

There’s always a trade-off, and no administration can succeed in the long-term by catering to a few billionaires over the rest of the population.

But remember that bankers still earn fees for advising on spinoffs and divestitures, so they get paid no matter how the environment shifts.

What’s Next?

I can see how some people might support Trump for cultural reasons, foreign policy, or AI boosterism, but I struggle to understand how anyone in a normal job could be enthusiastic for economic reasons.

A lot of people disliked the constant drama in Trump 1.0, but the general public mostly approved of his handling of the economy (could not find a comprehensive source, but here’s one example of 2019 polling supporting this).

They didn’t like him personally, but many people felt they were earning more and moving up the ladder.

But I don’t see that in the current environment.

Only people in a few specific sectors are doing well, and the entire economy seems lopsided in favor of AI researchers earning $200 million and OnlyFans models.

I expect something will change the current environment, whether it’s the Democrats outperforming in the upcoming elections, the AI bubble bursting, or a crisis/emergency, but I have no idea about the timing.

And if this course correction takes too long, perhaps it will be time for a quick relocation to Greenland.

The post The Trump Second Term: A One-Year Review of Deals, Markets, and Jobs appeared first on Mergers & Inquisitions.

“But if crypto prices crash and international stocks greatly outperform U.S. stocks in 2025, I will look silly (again).”

And, of course, that’s exactly what happened.

OK, crypto prices didn’t exactly “crash,” but Bitcoin and Ethereum were down by ~6% and ~11% for the year, following rapid rises in 2023 and 2024.

Meanwhile, both non-U.S. developed markets and emerging markets significantly outperformed the S&P 500 (~25 – 35% vs. ~16%).

I was up 30% for the year primarily because of substantial positions in silver (+148%!), gold (+65%), and non-U.S. stocks (+35%).

So, what happened?

Are we in an AI bubble, and if so, when will it pop?

And most importantly, have precious metals finally decapitated crypto and eaten its headless corpse?

Market & Investment Updates: My Current Portfolio

Here is my current portfolio as of January 1, 2026, with key differences vs. January 1, 2025, noted below:

• Equities: 53% [Up 1%]
• Gold: 14% [Up 4%]
• Crypto: 12% [Down 1%]
• Silver: 8% [Up 4%]
• Real Estate (Equity Funds + Owned Properties): 5% [Down 4%]
• Cash & Savings: 5% [Down 2%]
• Angel Investments: 3% [Down 1%; recorded at historical cost]
• Miscellaneous (Real Estate Loans, etc.): < 1% [No change]

The easiest way to understand the performance is to look at the main components with silver vs. Bitcoin in the comparison:

Silver resembled a meme stock this past year, while Bitcoin mostly stayed in “meh” territory.

Meanwhile, gold delivered its best performance since 1979, when it increased by 133% (!).

Precious metals had such a strong year that they distorted my auto-rebalancing in Wealthfront.

Normally, the service is supposed to rebalance frequently based on your targeted allocations, but the huge run-up in silver prices caused mine to drift by a good amount:

What I Changed in 2025, and Why

Unfortunately, 2025 was probably the busiest and most traumatic year of my life, so I could not spend much time on my portfolio.

I won’t share the full details here, but I was occupied by fun tasks/events such as:

• A disastrous move to another country that I had to reverse by the end of the year.
• The near-death of an immediate family member.
• Launching 2 new courses, 2 spin-off courses, and a new version of the infamous 400 Questions guide.
• Significant time and money spent on new course and subscription ideas, account security, and experimental promotions.

So, I mostly kept my allocations from the start of 2025, rebalanced a bit, and automated more of my monthly processes.

But I will note a few smaller changes:

• Equities: Throughout 2024, I shifted my allocations to U.S. stocks, which turned out to be a mistake for 2025. But I ended up with lower-than-planned percentages in U.S. stocks due to gold/silver performance (see above).
• Crypto: I increased my cost basis by ~10% over the course of the year via newly set-up recurring monthly purchases, but this ended up hurting me because of poor Bitcoin and Ethereum performance this year.
• Individual Stocks – I had virtually no time to trade merger arbitrage or long/short equity I plan to wind down this activity because I am extremely unlikely to have the time to do it properly anytime soon.
• Real Estate – Finally, I sold most of my investments in private real estate funds. I still hold a few positions in a retirement account, plus my property in Florida, but nothing else for now.

What Helped and Hurt in 2025? And Why?

Precious metals and non-U.S. markets had a spectacular year, rising by far more than anyone expected.

Meanwhile, trades that had worked well in 2023 and 2024, such as crypto and Big Tech stocks, underperformed both of those.

But the more interesting question is why this happened.

I don’t think you can narrow it down to a single cause, but my explanations would be:

1) USD Value Loss and Skepticism Over U.S. Trade / Immigration / Foreign Policy – This one explains a lot about why emerging markets and non-U.S. developed markets outperformed this year. The USD fell ~9%, its largest loss since 2017, largely due to Trump’s policies on tariffs, general instability, and possibly the immigration crackdown.

2) Central Banks and Fiscal Dominance – Almost every country in the top 20 economies worldwide is running a substantial fiscal deficit, which leads to more money printing by central banks. That, along with falling interest rates, incentivizes investors to buy more precious metals to hedge against inflation risk.

But… central banks themselves have also become huge buyers of gold! Visual Capitalist has a great breakdown of the data, which shows that central banks roughly doubled their annual gold purchases in 2022 – 2024 vs. 2014 – 2016.

3) Overvalued U.S. Stocks – Investors finally seemed to wake up to the fact that many large-cap/tech stocks were ridiculously overvalued and quite disconnected from their future growth potential. Of the Big Tech stocks, only Google and Nvidia beat the S&P 500 for 2025.

4) Crypto Got Ahead of Itself – Finally, markets can be “emotional,” and I think crypto investors got too ahead of themselves with the end-of-2024 rally. Yes, the current U.S. administration is very crypto-friendly, but that doesn’t necessarily mean market prices will double each year. If investors used too much leverage to buy crypto (which seems likely), a correction was inevitable.

You’ll notice that “AI” isn’t on this list because I don’t believe it has much to do with budget deficits, central banks’ actions, the USD’s decline, or poor crypto performance.

Some people have argued that AI-adjacent stocks drew investor attention away from crypto, which explains its decline in the final 3 months of the year, but I’m skeptical.

Nvidia and Tesla barely changed in October – December 2025, Facebook and Microsoft fell, and only Google rose significantly.

In fact, I would argue that these trends are related.

Despite their size, the Big Tech firms are effectively “speculative stocks,” in a similar risk / potential return category as crypto.

They’re not the same because one set generates cash flows and the other does not, but they may occupy similar headspace for many investors.

So, as skepticism about AI CapEx grew, there was probably some spillover into crypto as well.

Are We in an AI Bubble? How Does That Affect the Markets?

This could be a whole separate article (maybe I’ll cover it soon), but the short answer is yes, segments of the current AI market seem quite bubbly.

Assuming the bubble eventually pops, most of the damage will be limited to VC-backed startups that fail or get acquired at low prices.

Since credit is heavily involved in data center financing, many private credit firms are also likely to take a hit.

My prediction is that, eventually, many lenders will say “no” to a high-profile deal, which will lead to more deals falling through and a pullback in the sector.

Arguably, this already happened with Blue Owl and a $10 billion data center deal for Oracle.

A similar sequence of events occurred in the summer of 2007, right before the 2008 financial crisis.

The real questions are the timing and how much spillover there will be into the public markets.

I have no idea of the exact timing, but I would be shocked if this continues for, say, 3 – 5 years without a correction.

So any correction or crash will likely happen sooner than that, but I have no strong opinion about whether it’s a 2026, 2027, or 2028 event.

All the Big Tech companies will take a hit, but some, like Apple, will be fine, while others, like Nvidia, could fall significantly.

This matters because the S&P 500 is market-cap-weighted, so these Big Tech companies account for 30 – 40% of the index.

And since many investors are overweight U.S. stocks, they’ll be very exposed to any type of AI crash or correction.

Market & Investment Updates: So, What’s Next for 2026?

So, considering everything above, what is the best approach to investing in 2026?

From my perspective, the two most important points are:

1. The Macro Picture is Almost the Same – Sure, higher tariffs changed things a bit, but nearly all large economies are running ridiculous deficits, expanding the money supply, and heading into a demographic doom loop as birth rates fall and pension systems go bankrupt. So, if anything, volatility will likely increase.
2. Almost Everything is Expensive – We covered Big Tech and U.S. stocks above, but I would argue that gold, silver, and even some non-U.S. stocks have also become quite expensive. You can’t value precious metals via a DCF, but the M2 Money Supply / Gold chart shows that we’re right around the ratio last reached in 2011.

I don’t think it makes sense to move to cash or “short the market” because it’s almost impossible to time it right, and even if you do, you might buy back in at the wrong time.

So, I am thinking about the following options for 2026:

1. Sell Gold / Silver / Crypto and Reallocate to Non-U.S. Stocks – Yes, prices are higher now, but there may still be higher potential upside here. It seems many investors still haven’t caught on to the performance of non-U.S. equities and will take another few years to bid prices up.
2. Switch to an Equal-Weighted U.S. Stock Index – This strategy doesn’t always work, but it can be a useful hedge if the main concern is a Big Tech correction.
3. Buy SPY Put Options – But I’m a bit reluctant to do this because many things need to go right for put options on an entire index to pay off. I’ve also lost money doing this before, such as in 2020, when I was correct about a ~20% market correction but wrong about the timing.

All that said, I’ll be a bit disappointed if things simply continue as they are right now.

DOGE didn’t deliver much in terms of substantial deficit cuts, tariffs didn’t crash the economy (yet), and while there were a few notable bankruptcies in 2025, we didn’t get anything like Silicon Valley Bank or Credit Suisse from 2023.

So, finance just feels a bit boring and “samey” now.

I would like to see at least one bubble pop so everyone can stop speculating about when it will.

The post 2026 Market & Investment Updates: How Far Can the AI Bubble Inflate? appeared first on Mergers & Inquisitions.