Equity Research better then IB?
So i just had a little side discussion with a partner here and he was babbling on and on about how an equity research gig serves better purpose for private equity enrollment i laughed it off and went about my business.
He's actually right, depending on the type of fund.
It depends on the fund. I mean...why do PE shops like bankers anyway? It's for the modelling experience, right?
People in ER do at least as much modelling as bankers do. Instead of spending the rest of their time doing pitch books, though, the guys in ER spend their time writing research, speaking with executives in the industry they cover, and liasing with the S&T and ECM teams.
If you are looking to go into growth PE, VC, or a l/s hedge fund, ER gives you better exit ops. If you're looking to move into a buyout fund, banking is the clear way forward, as deal experience makes a difference. If you're looking to go into special situations or distressed debt funds, you're better off starting in restructuring for Houlihan Lokey (easily the largest restructuring practice) or the High Yield Credit Trading team at one of the major BBs.
I'm not saying you can't go into equity L/S funds or early-stage PE shops from I-banking. I am saying, though, that ER has (at least) as strong of a skillset.
I like what I'm hearing--but some people on this board will disagree (i.e. they say banking is the ONLY way to l/s funds or growth equity/VC). Can you elaborate a bit more? What's the best way to get positioned for growth equity or a large l/s fund coming out of ER? I feel like headhunters are going to ignore ER people.
Great post brother. Also, a long-biased hedge fund, or mutual fund love ER guys, for the above reasons. Also, most ER guys have their CFA's which is also a huge preference of the hedge-fund world (not so much PE).
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