Associate and VP Exit Options

do many go to PE/HF?

.

Anyone have any thoughts on this?

Associate exit options are similar to analysts -- except they actually have a harder time than analysts.

Analysts have the most options, simply because the opportunity cost is the lowest -- they have comparable skills as associates, they are younger (and presumably family planning is years away) and willing to work for less, and so forth.

With PE and hedge funds, they do tend to prefer ex-analysts to fill their junior spots also because of expectations - they have the same skills as associates with half the entitlement (i.e. more willing to take pre-MBA positions that are fixed in duration - you work for 2 years at the fund before your "contract" expires). The funds can then cycle through teams of junior folk every few years to bring in "fresh blood" to do all the grunt work for the partners.

With corp dev positions in industry, it's probably more an even playing field -- associates would be entering at comparable levels as analysts (mostly manager or director-level positions within industry in bus dev or corp dev).

The longer you stay on beyond the analyst stint, the harder it is to switch. When you get to the VP level, it's no-man's land -- you don't have the managerial/operating experience to transition into a senior role, but you are in some ways overqualified for the more junior roles that ex-analysts and ex-junior associates would take. It's not until you become a seasoned MD where your operating/managerial experience AND contacts/relationships can help land you senior positions in industry and/or in the executive suites within the financial institutions themselves.

When it comes to exit options, the folks with the broadest opportunities are analysts and experienced MDs. Anything else in between is not impossible, but certainly a lot harder (i.e. if you want to get out of banking, the best time is either after a few years an analyst, or after you've become a rainmaking MD).

What is also not uncommon is for ex-bankers (at any level) to switch into a completely unrelated career path where they have to start over (their banking experience has no real relevance) -- whether it's starting a business, going back to school on the road to becoming an academic/professor, working in nonprofit, going into public service, joining the ministry, becoming a real estate developer, and so forth.

Alex Chu
alex@mbaapply.com
www.mbaapply.com
http://mbaapply.blogspot.com

on the associate level; see plenty of 1st/2nd year associates go to hedge funds, and enough to private equity / venture capital

But that doesn't negate mbaapply's point.

I've seen plenty of associates make the transition as well, but intuitively it makes sense that an analyst will have an easier time making the buy-side switch than would a more seasoned and specialized associate.

For the record, analysts and associates don't have the same responsibilities in corp dev. Analysts will usually come on as a "senior analyst" or the equivalent and associates will get anything from "senior associate" to "manager" or even "director" depending on the size of the company and your experience level.

General rule of thumb is 1 year of banking/consulting = 2 to 2.5 years of industry experience. (a little less at the analyst level)

Which is that exit opportunities actually decrease as you become more senior, until you are an experienced MD.

So if you're not certain about banking and are just doing it to explore your options, best idea is to get in as an Analyst when it's easier to switch afterwards. If you stay on through the VP level, it's hard to switch unless you're going to another bank (maybe... even then it's harder).

In general similar options (PE, HF, VC, Corp Dev) are available but again as Alex pointed out, it's harder to make the switch when you have more experience.

If you do get extremely burned out at that level, I almost think the best option is to go in a completely different direction. It's unlikely that another finance job will help you much if you really want a change. And they would be quite difficult to get if you've been in banking for a long time.

http://www.mergersandinquisitions.com/
Mergers & Inquisitions

I guess the buy side is quite difficult to get in as well.

What is the job security like for a post MBA associate starting out? How many make it to VP or MD? Do most leave because they want to or because they are let go?

I'm interested in this too. It sounds like moving from a VP position at a bank to a PE firm is pretty tricky. Given how hard it is to land a PE gig right out of an MBA, what's an alternative way to get in, besides the analyst move?

I've been told that exiting at associate/VP level is harder because you may be expected to bring some of your old clients with you if you are switching banks? Is this accurate?

Obviously this would not be the case for analysts.

Job security or not, a lot of associates leave after their 1st or 2nd year -- some go to the buyside, others go into industry, some do a completely unrelated career switch (go back to law school, get a PhD, teach, work in nonprofit, etc.) and so forth. In bad times, they are part of the layoff cycle (regardless of how miserable they are, most will still try to cling onto a bad job than the prospect of facing a tough job market -- we all gotta pay our bills somehow). In good times, they leave by choice.

In banking, you really shouldn't be worried about job security anymore than any other private sector career - in bad times, you will face the threat of layoffs whether you work at a bank, or work in industry.

Alex Chu
alex@mbaapply.com
www.mbaapply.com
http://mbaapply.blogspot.com

Any special reasons why exit opp considerations would be different for boutique associates than for those coming from a BB?

I will be leaving my VP position shortly to accept a Corp Dev position at a multi billion $ company. Pay will be equal or better than my current position. Biggest perk - using the company plane, a G4.

Why do you contribute this horse shit...

Gotta get those banana points

Instead of simple banana points they should implement those reputation points that some other forums use. Basically people can vote on the quality (or lack thereof) of a user's posts and this adds up over time.

That's not a bad idea. The negative and positive feedback per posts, I'm assuming you mean.

I think this thread really ignores a major factor for An/As/VP getting jobs.

Transactions

When you work on a large transaction in a lead role, you get to know a company as well or better than even the C-level people in the company. If you are doing a transaction with a PE shop at any level and shine, they tend to notice that sort of thing. In my transactions with both corps and PE, I have seen them come back and try to interview/make offers to people across the board.

I also know for a fact that everyone's phone from 6 months out as an analyst all the way up to senior MD pretty much rings off the hook with HHs, friends looking to staff roles etc. The jobs may not jump into your lap the way they did over the past few years as a top tier first year analyst once you are a VP, but from what I have seen it really isn't that difficult for talent to get a new job.

very much specific to this thread, but Ill be back to comment at some point...

in the meantime, AWESOME picture art!