For years, private equity was the obvious next step for ambitious bankers. The hours were meant to be lighter, the pay higher, and the prestige greater. But in 2025, the appeal is not what it once was. While private equity remains lucrative, it no longer holds the same unchallenged allure.

1. The Lifestyle Gap Has Shrunk

Bankers once believed that moving into private equity meant fewer late nights. In reality, the workload has caught up. Competitive deal environments, portfolio management, and fundraising have made hours in many firms resemble those in investment banking. For junior talent especially, the lifestyle trade-off feels marginal.

Market data / context:

• In the first half of 2025, global PE and venture capital deal value rose ~19% to US$ 386.4 billion (versus ~US$ 325.6 billion in the same period in 2024). Ropes & Gray+3S&P Global+3Ropes & Gray+3
• At the same time, deal count fell ~6% year-on-year in that period. S&P Global+1
• Also, a report notes that secondaries deal volumes in Q1 2025 were about US$ 45 billion (up ~45% year-on-year) and GP-led activity in the first quarter of 2025 was ~US$ 25 billion. Northleaf Capital+1

What this means: While deal value is high (implying large, complex deals), the work remains intense and requires active management—so the notion of “lighter hours” is less true than before.

2. Pay Is Strong, But Not Untouchable

Private equity still offers some of the most attractive packages in finance, particularly through carried interest at senior levels. Yet rising rates and tougher exit conditions are compressing returns. At the same time, banks have adjusted their compensation to retain star performers. The once-clear pay premium has narrowed.

Market data / context:

• On the banking side: In the U.S. investment banking sector in 2025, total compensation for analysts is around US$ 160k-210k, associates US$ 275k-475k. Bonuses rose ~25% year-on-year for many. M&A Community Portal+1
• On the PE side: For first-year PE analysts, total compensation (base + bonus) is around US$ 100k-150k; for associates US$ 250k-400k; for vice-presidents US$ 500k-1 million (excluding carried interest) at larger firms. Corporate Finance Institute+1
• Institutional investors forecast that private equity will deliver ~13.5% annualized returns from 2025 to 2035, compared with ~5.6% for public equities. Adams Street Partners
• That said, a June 2025 survey by PwC reported that PE firms are sitting on about US$ 1 trillion of unsold assets (i.e., assets held longer than expected) amid slower exits. Reuters

What this means: While PE pay remains high (especially for senior roles with carried interest), the relative difference versus banking is reducing. Banking compensation is increasing, and some of the upside in PE is challenged by slower liquidity and tougher market conditions.

3. The Work Itself Doesn’t Suit Everyone

Bankers thrive in a fast-paced, transactional environment. Private equity demands patience, operational oversight, and longer horizons. Not everyone enjoys the slower rhythm or the breadth of skills required. For some, corporate development, venture capital, or hedge funds feel like a better fit.

Market data / context:

• In H1 2025, add-on transactions made up a very large share (≈ 75.9%) of all U.S. PE buyout activity, up from prior periods. CBH
• Growth-equity deals are increasing: in the U.S. in 2025 YTD, growth equity deal count was up ~57% and value up ~63%. Ropes & Gray
• Meanwhile, exit activity remains under pressure in some markets. Ropes & Gray+1

What this means: The skill set required in PE increasingly leans toward operational value-creation, strategic add-ons, portfolio company management, and longer holding periods—not just the “banking-style” deal execution. That reinforces your point: it’s not a fit for everyone.

4. Competition Has Intensified

Private equity roles are more coveted than ever, but that also means the field is crowded. Entry is harder, progression is less certain, and the path to partner less predictable. Some bankers find themselves in an environment just as competitive as banking, but with less clarity on advancement.

Market data / context:

• According to the 2025 outlook, fundraising in the private-markets sector is slowing: in Q3 2025, PE firms had raised ~US$ 340 billion and were on track for a ~25% decline versus the prior year. EY
• Also, global PE deal-value growth is being driven by fewer transactions and larger ones, signalling that entry-level deals may be fewer and that competition for spots is fierce. Ropes & Gray+1

What this means: With fewer “mid-tier” opportunities and more capital chasing the top deals, the ladder is steeper and less predictable—reinforcing your point about the narrowing of “easy” transitions into PE.

5. Alternatives Are More Attractive Than Before

Private equity is no longer the only appealing destination. Growth equity, venture capital, hedge funds, and even corporate roles now offer strong pay, prestige, and often better balance. Younger professionals also value culture, purpose, and flexibility—qualities they may find outside traditional buy-out firms.

Market data / context:

• Growth equity deal activity is showing strong growth (see above).
• Also, industry commentary notes that the private-markets sector (including PE) is expected to grow from ~US$ 13 trillion today to over US$ 20 trillion by 2030. BlackRock+1
• Yet, the “crowded” nature of PE, longer holding periods, slower exits (US$ 1 trillion of assets unsold) indicate that the trade-offs are more visible. Reuters

What this means: The alternatives are not just “second-best” anymore—they are legitimate, competitive destinations. That supports your point that candidates have more options, and they are weighing fit more carefully.

Conclusion

Private equity remains prestigious and financially rewarding, but its shine as the inevitable “promised land” for bankers has faded. With the lifestyle gap narrowed, compensation less differentiated, and alternatives multiplying, today’s bankers are more thoughtful about where to go next.
From a market data standpoint: the deal-valuations remain high, pay remains competitive, but the structural pressures (slower exits, higher competition, need for operational skill sets) are more evident than in prior years.
For firms, the challenge is to sharpen their pitch and offer more than outdated assumptions (e.g., “lighter hours,” “instant success”). For candidates, the opportunity is to choose a path aligned with both ambition and fit—and to evaluate the market dynamics, not just the brand prestige.

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