I am a first year analyst at a BB bank, starting to go through the PE recruitment process. I wanted to get anyone's thoughts on going into PE after 2 years in banking versus 3. I have heard that it is better to go after 2 years because more firms seek first year analysts (meaning you leave after your second year) and obviously the banking lifestyle/work itself isn't very exciting so people want to leave ASAP, but others have told me that is beneficial to have an extra year under your belt for interviews.
Sorry if this has been covered before (if it has, it would be great if someone could post the link to the forum, wasn't able to find anything relevant)
Also very interested in this. To add, would it be any different coming from a respected MM outside of NY?
How did you start the recruiting cycle? Have you been contacted or are you reaching out? I have not gotten any calls e-mails, granted I'm at a MM shop.
Headhunters have reached out and been doing initial meetings with candidates (started around late October), real interview process will apparently start mid February/ early March
I was once told by a PE analyst that the best way is to actually leave after your first year in IB, as you will be a first year analyst at the PE anyhow. The difference, according to him, is though that the pay for first year PE and 2nd year IB Analyst are essentially the same and thus you would get paid the same amount twice instead of having a raise (as in 2nd to 3rd year IB for example). I guess this is a luxury problem to have or to think about, but it gave me something to seriously consider and think about. Especially if you are planning to go to business school, as you then would have 1 year IBD and 2 yrs PE experience and would still be in the rather young side for applicants which, according to HBS guru for example, would put you in an advantageous position for HWS.
So then essentially I'm screwed since I've not been contacted?
I assume most of these early interviews are for Megafunds/Top HFs. At least that's what I'm hoping... I was under the assumption MM/Lower MM PE shops recruit closer to a start date.
why 2yr or 3yr analyst role (Originally Posted: 03/17/2007)
Has anyone ever wonder why ibanks keep retiring experienced analysts and injecting new analysts with little ibanking experience? One reason I can think of is that new analysts are more willing to take shits from higher up while the experienced one are not as easily manipulable. Any insight?
very few analysts are willing to stay past year 2
so most of the time it's actually because most analysts don't want to stay in the industry or is it because these IBanks just don't want to keep these analysts after 2-3 years?
for all the analysts that leave, did htey just use the analyst role as a stepping stone into other careers or did they just say it's not the type of career for them?
2 year vs. 3 year analyst stint (Originally Posted: 06/03/2015)
I know that some analysts work for 2 years before B-school while others do 3-year stints, but what's the advantage of each? If IB is hellish on the lower levels, why don't people bail sooner? Direct promote opportunities? Contract issues?
I'm gonna try bumping because it's been a month and a half
There are many reasons. Some banks "require" a three-year stint. Senior bankers will not help you out if you try moving before finishing three. I put "require" in quotations since you are obviously not legally required to stay for three years. Other times, candidates strike out with PE recruiting and want another shot. PE recruiting is tough, and not everyone makes it the first time around, or at all. Others want to be career bankers.
I would also note most people do not go to business school 2 years after undergrad. The "standard" route for many analysts is 2 years IB, 2 years PE/HF, then b school, but of course there are numerous other paths.
I did 2 years but was perfectly willing to stay on for a third.
To me, it was about finding the right opportunity for my next job. I didn't want to rush and find out that I chose the wrong firm or path.
Yeah, PE recruiting starts very quickly after starting your analyst stint. There's really no reason to keep grinding out another year if you already know where you're going to end up.
I know that for some banks, bonuses for 2nd year are not paid out unless you stay the 3rd year.
Source? I've literally never heard of that.
He probably means that some places have the bonus paid out in say mid-late August. Most PE stints start late July or right at the beginning of August, thus the 2nd year would forfeit the bonus.
I've never heard of 2nd year analysts giving up / forced to give up their bonus.
Our bank's bonuses are paid out mid August now. Analysts headed to other jobs after doing 2 years don't get the bonus unless they stay past the cut off date.
3 years of IB vs. 2 years of IB for buyside (Originally Posted: 12/12/2014)
Is it popular (or at least acceptable) to work in IB for 3 years (rather than 2), and then try to hop to the buyside (whether PE or HF)? I know this would throw off interview timing so I'm curious.
Also, for PE at least, it would seem logical to spend time in both Leveraged Finance and Mergers & Acquisitions if possible over a course of 3 years, thus gaining exposure to LBOs from both financing and advisory perspectives.
Thoughts?
Definitely interested in hearing more about this.
Interested as well.
think you're overestimating how much you actually 'learn' in banking.
You are overthinking this - 2nd and 3rd year analysts have basically the same shot at PE assuming the same knowledge level. In practice 3rd years may have learned more by the time recruiting starts (back half of 2nd year vs back half of 1st year) and are more flexible to take immediate start positions but there is no advantage / disadvantage to doing 2 vs 3 years. You will also obviously have more money if you are a 3rd year which could be meaningful if you plan to do an MBA.
Do not start your career in one group while planning from the beginning to lateral to another. That is a waste of time, you would not actually learn that much more and you would have weaker relationships with your senior people a.k.a. your references for PE. Just pick a group (lev fin or M&A are both great, would also recommend sponsors at the right bank), do well and recruit when you want to leave... simple as that.
Completely agree on both points. Funds don't really make a decision due to the simple fact that you're a 2nd or 3rd year analyst. The better prepared analyst gets the job.
On the second point, I was in this situation a year ago -- lateral to a better group vs. staying in current group with good MD references. Ended up going with the latter and it benefited hugely. It's on you though to make it known to the seniors that you'd like to move to the buyside.
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