Pathways to PE
I will be at the industrial group at GS/MS/JPM NYC next year as first year. At this point imnt sure as if I would like pursue PE as I haven’t had full exposure to it. To give context I go to a complete non target, 3.3 gpa, finance major and computer engineering minor, with 1280 SAT. Given the stats, the general consensus here on wso is that I won’t be able to get looks from MF/UMM because of my shitty stats even though I am at a solid group. I would like to end up at MF/UMM well because of comp, I wouldn’t like to take a major pay cut as well as have a pathway to top 10 mba program. I plan to not recruit my first year ( I want to get used to banking and actually prep for PE interviews), if I am able to not land a into MF/UMM my 2nd year would my chances increases in as sense would I get more looks if I were to recruit as a first year associate or 2nd year associate. The reason I say is because I have seen people on LinkedIn go into Apollo and Onex as a first or second year associate(in banking), lastly if I were to land MM PE, would it be easier to lateral to UMM/MF PE after a year or two..just trying to figure this the recruitment landscape and what are my best chances at landing MF/UMM. To give further context I never thought I would land BB IB with the stats but i networked and worked hard so I guess is there hope
Appreciate it. Can I skip recruiting my first year, or would it be smart to not recruit first year and make sure I am prepped
Study now and recruit first year if you're already set on PE. You'll be surprised at how many first years can barely run through a basic LBO modeling test when they first hit the desk and start interviewing. Find a few friends to split the Peak Frameworks PE course with and start prepping for interviews now. The comp eng double major can explain your poor GPA and if you walk into those interviews when on-cycle starts and you're way more prepped than your peers I think you'll have a solid shot. Coming from a fellow non-target, the school name still matters, but the banking group you get in (which you've indicated you're in a solid group) will matter so much more than your school name for PE recruiting.
Congrats on everything so far, that alone is a huge achievement and you shouldn't discount that based on 'PE stats' alone.
And I didn't know not recruiting in first year is your option to make, we all know on-cycle is pushed forward earlier and earlier every year, recruiting comes to you and not you to them (HHs approach you, not you them). HHs approach 1st years and idek if they look so much at 2nd years, let alone associates. That's why the best time to prep for PE interviews is senior year
Appreciate it, I was told to interview when prepared, and I’m sure I won’t be prepped let alone be competitive with no deal experience couple months in
Fair enough, brother
Skipping on cycle is very common as a lot of people don't know what they want - banks will absolutely recruit 2nd years through oncycle, but you have to do a third year in banking.
No offense but you shouldn't be commenting with advice if you don't know
UMM/MF basically out with your stats and non target - engineering is understandable but GPA is still the #1 most important
Definitely don't wait until associate to recruit, those people are the exception and not the rule. if you are not ready for oncycle in your first year that is fine, you can recruit for MM off cycle or try oncycle in your second year but your chances for a larger seat aren't going to get much better. It is possible to lateral up to UMM/MF but probably not in such a short time frame
Appreciate all the help! Couple more questions, some questions may be dumb but i legit want to learn about the PE landscape. I will ask away. 1) if I were to take let’s say the Gmat and get around 730, will it boost my chances. 2) will a solid MM shop increase my chances to get into top 10 mba programs 3) if a career in PE doesn’t work out, is going back to banking a option. 4) if I were to do MM PE for 2 - 3 years, than mba at top 10-15, what position would I recruit for afterwards in PE UMM/MF ( e.g VP, senior associate). 5 ) In regards to compensation at senior level how would it be different at MM PE vs banking vs MF/UMM PE in general. 6) And personally imnt 100% set on PE/GE however I don’t want “miss out” on recruiting since it is early, what is your best advice on that
Can't answer all of these but I'll take a stab. Also, given you have BB IB and will likely land something in PE, I'd argue anything outside of M7 is a big waste of time and opportunity cost for you. Top 15 is fine for someone with a meh profile trying to climb into banking, but plenty of PE firms are career path / don't require MBA, so I would really think carefully about even doing an MBA when you don't need one to move up in this world.
1) I'm sure you're familiar with this from SAT/ACT - obviously higher is better, 730 is squarely average for M7 programs and the average is even higher for people coming from finance/PE. You'd be making up for your GPA a bit so I'd say 760 would be a goal score to be competitive at the really top schools. Obviously much easier said than done.
2) MM PE to M7 is absolutely doable. MM PE to HBS/GSB, doable but likely an outlier with an amazing profile - that is an uphill battle, their number of seats for PE guys is limited and they tend to pull from a small group of funds
3) Yes you can basically always go back to banking once you've done it. Most people don't want to though
4) Likely senior associate, sometimes VP at a MM
5) MF PE > MM PE >> banking. Carry really makes the difference here. That said it is much easier said than done to make it to the top in any of these, and you could argue MM PE might have better chances of making it to partner than MF PE. You will make plenty in any of these careers so I really encourage you to focus on what you like and want to do ahead of comp.
6) If you don't know what you want to do, hold off on oncycle. You will get plenty of off cycle opportunities throughout your first year and can do oncycle year 2 if you want. But oncycle is a huge shit show to begin with, you have very little time to make decisions, and HHs generally won't like uncertainty so I think skipping oncycle that first year is not a bad call at all
Here’s my take -
First, if your goals are comp and b-school, you don’t need UMM/MF. There are MMs that pay in line with MFs and there are certain MMs that place as well (if not better) than certain MFs into H/S/W. If the goal is an M7 business school, that should be doable from most reputable MM funds.
On the recruiting front, this is a controversial take but my personal opinion / experience is that on-cycle is your best chance to “punch above your weight” in recruiting. It’s so hectic and happens so fast that if you are a remotely qualified candidate (which you are) you can end up in a process and convert by crushing the interviews. Like if KKR has one off-cycle spot, they’re more likely to play things slow and wait for the perfect candidate, but if they’re trying to fill 10 seats on cycle and need to interview 50 kids to do that, there’s a better shot that there is one random interview slot left and the HH can get you in.
I was kind of the opposite of you (target with good stats but a non-EB/BB bank) and landed somewhere that seemed out of reach from my bank on cycle. I got an interview invite later in the night (I assume someone canceled or something) but was able to convert this interview and land the offer. I had friends from my bank try to interview at this firm off-cycle and no one had any luck.
Which MMs fit this profile B-school wise? I know Berkshire is lauded for placement but would classify it as a UMM.
Can you name the MM that fit those profile if you can, thanks
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Lol that's crazy you just assumed that about me, imnt diversity (south Asian male). I can go into details about why or how I got a 1280, went to high school in the hood, grew up in the hood, didn't have resources or knew how to study, first generation student, parents made and are making 40k yearly income after, sure these looks like excuses and it may be excuses but if I had some sort of guidance I could have gotten a solid 1500. Let me say this, I have seen things you haven't and I have experienced things I wish no one to experience. And to note I made it to BB IB without diversity recruiting as stated above
how is it crazy to assume that? that's a pretty low score for this kind of job. not discounting anything else you said but most people in this industry with a score like that are diversity
Agree with all of the above except the "I would / could have gotten / done..." no point in conjecture. You've already made it in
At a BB and got a 1250. It is what it is.
Just curious - if you are planning to recruit for PE , how you are approaching it
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The fact that you write "imnt" instead of "I'm not" (you've done it three times in this thread), tells me everything I need to know.
You, most likely, will not be successful in P/E because if you feel like you need to make this asinine abbreviation, you probably take all sorts of other short cuts in career/academics/life, which in my view would not make you a valuable P/E analyst/associate.
I mean that is crazy that you just assumed that based off grammar. I do not care about my grammar while posting on a forum, the goal is to get my point across. I do understand where you are coming from but I simply just don’t care about my grammatical error as long as people understand me. Now if this were IB or PE ( I wouldn’t have gotten return offer if I took shortcuts like you mentioned) it would be different story…I understand where you are coming from , however it is stupid to assume that just because I did xyz here I will do xyz there.
Why is it 'stupid to assume'? Think of it this way. I have very limited information to judge a candidate by when I meet them in an interview.
Just like in this case, all I have to judge you by, is what you give me in this thread (I guess I could have seen what else you posted, but I didn't, only used this specific thread). So something as trivial as this abbreviation is something that jumps out at me, and based on previous interactions with other people throughout my career/life, my brain automatically infers certain things, like the conclusion I made about you in my post (even if that conclusion is wrong and you happen to be the greatest potential P/E associate known to mankind).
So while you say "I don't care about my grammatical error", which, by the way, is the wrong way to look at it, you didn't do anything wrong grammatically, its just abbreviating something that shouldn't be abbreviated, perhaps you should think about it a bit more and realize that writing out full words, even in a silly WSO post, is good practice.
Got it thanks!
I can't believe this guy Crypto Jones had the audacity not to use the WSO 'reply' function. Such gross neglect of tools intended to keep forum threads organized surely implies inefficient work and corner-cutting in his hedge fund work.
If your main goal is to make a decent comp then stick with IB. Based on the information you've provided, your parents make 40k. You'll be making multiples of that even in your IB analyst years.
I always warn people asking IB v. PE about the fact that these are two very different jobs. I would not recommend PE if you have limited to no interest in investing and are strictly just trying to do it for pay.
Thank you! In regards to investing I know that I don't like the markets. However, PE investing is different, I do find acquisitions and closing deals interesting. Furthermore, I haven't gotten exposed to PE or investing at all until I recruited for IB. My goal is to try PE to see what I would like to do for the rest of my life and because of that I am not 100% set on PE.
In IB, the lifecycle of the deal process you generally see is: pitch + mandate + initial analysis + CIM creation + acquirer outreach + mgmt of process + subsequent diligence calls + legal docs + closing. And then you generally do that again. And again. And again. As you move up the ranks, your time shifts around the different parts of the deal lifecycle and its responsibilities. And this is if you get mostly M&A experience. If you're in an industry group, expect to create a lot of "client" materials around comps, market news, rumblings, potential future trends, etc.
In PE at a more junior level, there generally a few main things you focus on: 1) deal screening, 2) deal evaluation, 3) deal due diligence, 4) internal reporting, 5) portfolio management.
1) Deal Screening - this is a combination of reading through CIMs, creating preliminary models, short investment committee memos, and iterations with your investment team / partner. If the firm you work at sources a lot of proprietary deals, then expect your deal screening experience to be way more ad hoc (which I find more fun). You're typically dealing with founder/owner/operators or fragmented non-auction process where there are bilateral discussions. I find these processes way more work but also more interesting.
2) / 3) Deal Evaluation / Diligence - Let's say your investment team successfully screened a deal and it made it past initial round of IC and you submitted a first round bid / non-binding term sheet. Now you have to create a more fulsome model, run more financial cases, start engaging 3rd party advisors, create a diligence plan, create a transaction budget, and begin the actual diligence process. Although you will be involved with this responsibility on both the IB and PE side, attention to detail, critical thinking, and "getting it right" is MUCH more important when on the PE side than on the IB side. On the IB side you're just a facilitator. On the PE side you have a fiduciary duty to your investors that your firm is making the right investments and have turned over all stones when conducting diligence.
4) Internal Reporting - the unsexy stuff of PE. This can be anything from quarterly valuations, to fundraising docs, to fund-specific mandates on financial reporting, etc.
5) Portfolio Management - you will be responsible for "managing" multiple portfolio companies. Closing the investment is just the first part of your job. Actually managing the company is generally where the "in the weeds" work begins (depending on your fund). I work closely with all of my Portco's CEOs and CFOs on everything around growth, strategy, capex plans, budgets, hiring / retention plans, tuck-in acquisitions, monthly reporting, etc. Portfolio management is a shit ton of work, especially if you work at a fund that is more hands-on.
This was a long-winded way of trying to help paint the picture that IB and PE are two separate jobs with different types of work and responsibilities and stress and commitments. If your main purpose of working in finance is to make good money and support your family and a lifestyle, IB is a pretty straightforward job to achieve that. It's not a super hard job and once you reach a certain level, you're able to better predict how certain things will unfold and you can plan accordingly. As you get to the higher ranks in IB, you just need to make sure you can step back from the model monkey type work and can understand the bigger picture of the industry you cover, the main players, current market environment, and can develop softer skills to start developing your own network.
With PE, to move up the ranks, I think you truly have to care about the job and have a genuine interest. I actually got MORE stressed moving from associate to VP. The level of ownership you truly have to take in PE is pretty substantial, and if you're only doing this job for money you won't have the underlying motivations to care enough and you'll eventually be funneled out / burn out.
You definitely don't have to be dead set on PE now since you're still young. I would recommend to start talking to PE folks and hearing about their experiences, reading up more on the industry, and start planning your 3-5 year goals.
i mean isnt PE pay much better when you adjust for hours?
Im pretty sure the hours aren’t much different if you are at a UMM/MF and some MM
Really appreciate all the help! I’m pretty sure if I am real with myself my short term motivator is money as I know how hard life is without it lol. But I definitely need to do “ soul/career” search to figure out what do I really want to do and plan it accordingly. Thank you again for all the info!
How the fuck did you land GS with non target 3.3?
Family ties?
I think once you have GS on your resume once you have good recommendations from hustling your ass off you can still get into MF. It’s not the black box people say it is.
An old friend of mine is in Carlyle’s illiquid credit group and he got sub 3.0 GPA from queens (semi-target for Wall Street/MFPE?)
Bruh lmaoo, I don't have family ties I legit come from poor family. Imnt saying which bank but I made it purely through networking and knowing my technicals in and out, it was a grind legit a grind to the point I gained weight and stopped working out. But thanks for you insights on the exit opps!
More and more junior analysts are skipping recruiting in the first year. If you're getting a lot of reps, no need to skip. If you aren't; I think it makes sense to get some more experience and recruiting with another year of experience under your belt.
It was mentioned earlier, but it is true that you get less looks if you're already an Associate in IB and are trying to move to PE. I personally target Analysts that just finished their second year.
-PE Headhunter Mike
My goal is to be ready and ensure that I understand the space and my interviewing skills are well established. So as a result, I wanted to take a year to develop those aspects.
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