2 Years IBD -> 2 Years PE/VC -> ???
What is the typical path after a stint at a PE/VC shop besides business schools? Thanks.
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Hedge fune or dev/strategy at co
Some people will move to other PE firms (typically going "down market" in that it's a smaller shop with lower AUM). Some will receive a direct promote without the MBA being necessary. Some will be told the MBA is necessary but that their seat is theirs for when they come back. Some of the hardcore kids who did two years of banking at a top group followed by two years of PE at a megafund will have lined up a HF role at a quality shop. Others will move to an industry role (corp dev at a F500 in a vertical they specialized in). Others will go to a family office. I have seen a few move to less demanding positions with better quality of life, like a public pension or a fund-of-funds that will require nothing more than 50 hours a week. I've seen some unlucky few move back to banking (and ironically be behind the fast-track A2A promotes from their own analyst class).
There is no set path. Everyone's just trying to find their own way.
whatever happened to just continuing to do whatever interested you..
2 Years IBD --> 2 Years Pe --> ?? (Originally Posted: 02/01/2014)
I'm about to wrap up my first year as an associate in a top middle market private equity fund, and am starting to think about next steps. I imagine that a number of you have already been through this "fork in the road" or are about to face it, so was hoping to start a discussion around it.
Here are a few paths I could take: - Business school: This is a de facto option, but it is very expensive (direct cost + opportunity cost) and does not seem to open up so many career opportunities (at least in the near term; not sure about longer term) - Internal promotion: My fund rarely promotes from within (maybe one person every two years) so I can't really count on this one - Hedge funds: Headhunters are starting to email me constantly about hedge fund opportunities. I think that working in a hedge fund would be interesting and lucrative, but I also suspect that it is too "volatile" of a career (i.e., no job stability) for my taste - Corporate development: Often provides good job stability & lifestyle but also lower pay. I've worked closely with the corp dev teams of my portfolio firms so have a good sense of what this option offers - Investment management: Not sure what kinds of opportunities are available to people with my sort of career track / skill set, whether they are long term jobs vs. 2-3 year stints, and what is their near-term and long-term comp trajectories. However, I have heard good things about IM lifestyle & quality of work - Start a business. I don't have any brilliant ideas at the moment, but if I get one, then maybe
Curious to hear your thoughts on these options or others.
I should say that I would like to stay in private equity for the long haul (I enjoy my work and really love my current firm). But, The majority of very qualified pre-MBAs I know who tried to pursue the post-MBA PE route have not succeeded in doing so (including ones who went to HBS / GSB / Wharton, which is almost a pre-requisite in the industry), so I'm trying to keep a realistic lens around my next move,
Have you tried reaching out to headhunters for lateral opportunities within PE?
If you love your current firm and work, then why try to change industries? Is there someone higher up that you're comfortable with speaking with to express your concerns/convey your goals?
wait, you're telling me that people you know who graduated from H/S/W AND PE experience haven't had any luck with recruiting at other PE firms? or am i missing something
If you're coming out of HBS/GSB without an offer to return to your prior PE firm, its generally an uphill battle because of the limited # of post-MBA PE seats out there.
i was always of the opinion that most people got into PE through 2 yr IBD --> 1 yr MM PE--> MBA --> megafund
perhaps i was mistaken all along
Almost every pre-MBA PE program is 2 years. There is no 1 year program I've ever heard of.
While it is possible, generally speaking your pre-MBA experience will limit the the opportunities you have available to you post-MBA. That being said... havign access to an opportunity is not equal to converting to a job.
Most common track for people go do PE pre and post MBA are: 2 Yr IBD --> 2 years pre-MBA MM PE --> Top B-School --> MM PE Post-MBA partner track 2 Yr IBD --> 2 years pre-MBA MF PE --> Top B-School --> MF PE Post-MBA partner track
You see people going from MM to MF and vice versa between b-school, but its less common. Most of the post-MBA hires at MFs come from pre-MBA MF shops. Same goes for MM, although its easier to go from MF to MM than MM to MF.
This may be true, but this differs from what I've heard. I am preparing to transition from MM PE to MBA and spoke with a lot of students from the schools I was targeting - the consensus I found was that if you had good deal experience in your pre-MBA gig, you should be able to find a post-MBA role, given: you are willing to wait til the second half of your second year to lock something in, you are relatively flexible from a geographical standpoint and industry focus standpoint, and you are willing to put in the legwork to find your own opportunities. Note: I did most of my diligence at the non-HSW MBA business schools">M7 schools, as those were the most realistic for me, given my background.
agree with more leverage - if you have good pre-MBA PE experience, go to a top bschool, and are NOT invited to return, can usually (not always) get a PE opportunity
May not be the post-MBA you wanted / expected, as post-MBA PE roles are tough to come by
Caveat, you could always land one of the few open seats at a top firm, but # available is low + competition is very high
obviously, people land great PE post-MBA gigs without having worked there previously, but would be realistic that this is not a given
Andres: Not proactively. I've always thought that firms only hire post-MBA level associates if they, well, have an MBA (from personal experience, this seems to be the case at least with top MM / MF shops except for internal direct promotes)
HFer: If I can't stay in PE, then I need to consider what other relevant industries I might want to explore
Tufts: Yes - that is definitely the case. I don't have the stats on this, but I know of a handful of people who got post-MBA jobs from b-school (and usually they are "brand" downgrades from their pre-MBA jobs, e.g. TPG to small MM) but I know of literally dozens who ended up moving industries because there just wasn't enough post-MBA hiring need in PE (they moved to banking, consulting, corp dev, etc)
... :(
.
I agree with Marcus in all of his responses here. Most of my friends are also in the top MM / MF --> S/H camp and they had a hellluva time finding PE jobs (most did not). I don't know why people from smaller PE funds and worse schools would fare better. Maybe I'm missing something
This is in line with what I've seen as well.
i figure if you do 2years IB, 2years top PE, and 2 years of B-school your options are as follows:
is this accurate?
What is scary though is look at any decent MM PE firm's website and note where recent b-school hires come from. you'll see mostly megafunds and top MM PEs (MDP, etc.) from HSW. so even outside the megafunds, you're facing very steep odds of getting a good post-MBA job.
Wow this sounds rough. Btw I find it funny how we talk about pre-MBA MF jobs as if most people have access to them when that's hardly the case.
Agreed. What I find even more comical is the notion that its "too hard" to get a 2 year megafund opportunity out of banking so you go to a lesser fund then b-school and get there in a partner track position.
That would be quite sad/depressing to be a rockstar analyst in banking, get a job in a MF, go to HBS just to go back into banking as a first year associate, while your less impressive banking counterparts make VP. Apparently, this happens more often that you think.
Precisely why you should go into PE because you're interested in the industry and role rather than a pipe dream of bringing home the biggest paycheck.
HBS/GSB if you can get in, otherwise, hedge fund.
Very, very few people go back into banking after PE. In my entire career in the middle-market, I only know one person who did it and she subsequently left a few years later. It's not that the option isn't available to you (getting a banking job after doing banking --> PE is a matter of just picking up the phone and making a call). The problem is that the prospect of going back to working long hours for less pay and a generally less or equally exciting job is miserable, and most people would rather keep searching for a PE job or get out of the industry altogether.
Also, just an FYI -- it is far more common to see people doing three years of banking these days. I've been shocked at the number of my peers who did three years IB --> two years PE --> MBA. Probably has to due with the limited PE jobs available during the recession.
http://tinyurl.com/pfk7qsj
I think an alternative topic of discussion is that there are pros and cons to both MF and MM pre-MBA. I just went through the job search ringer and accepted an offer for $2B MM fund. I'm extremely happy with my choice.
A lot of MF shops are so big that you can be screwed over. I'm going to a firm with only 4-6 first and second year associates combined and because of the lean teams they essentially ensure broad generalist exposure and experience. Also, if you're interested in the partner track wouldn't you look for more new MM funds stared by former MF MD's that have room to grow?
Couple this with some studies beginning to suggest the next wave of truly profitable PE firms may be the ones with MM Fund with a lot of potential and than traditional MF where I'll be used for my 2 associate years and spit out to -b-school just like the banks spit out analysts...
Any thoughts?
I'd caution against the after-the-fact thought pattern used in arriving to a decision that was already made for you.
The MM vs. MF discussion has been debated ad noseum.
I would say that incoming MF size is generally 6-8 people (not much different than your class of 4-6) and the studies claim you cite is complete nonsense; there's no way of credibly opining on expected future returns based on fund and size, its pure academic quackery; I'd put a lot more weight in longer term historical quartile rank by vintage and since inception (assuming its a meaningful # of funds/time period).
All that aside: //www.wallstreetoasis.com/blog/why-i-left-a-seemingly-perfect-megafund-pe-gig-for-a-guaranteed-salary-of-000
My takeaway from that guy's experience isn't that banking is so much more soul crushing than MF which is so much more soul crushing than MM... its that where you go should be based on what you're trying to get out of the experience. I personally wouldn't be long-term happy chilling on a beach running a blog. I need to be focused and doing and working towards my end goal, which is obviously very different than this guy's. If my priorities were different maybe I'd never have left banking, maybe I'd have gone to a large PE shop and then to a more moderate lifestyle'd, smaller firm... it depends on what your end goal is. Some people quit to travel and live on a shoe string budget, some people not so much.
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