BB Equity Research VP or B-School to pursue M&A Associate Role?
Dear WSO,
I need some advice as I've been pondering and losing sleep day and night on this topic.
I'm 30, in ER in a MM for 4.5 years prior to which I was an auditor for 2 years (gained amazing accounting skills, work bored me to death, made the switch through massive networking/hustling at the time). The industry I cover has seen an exodus for some reason from some tier-1 BB sell-side ER desks this year and now I've interviewed and been offered a VP position at one of these desks (top-tier BB).
As fate would have it, I've also gotten into a top b-school (think H/S/W) where my initial aim was to step back and try to convert b-school and my prior experience covering my industry into an M&A Associate position, with a long-term goal of working in PE/investing role in this specific industry (I'm passionate about my industry and can spit game on it all night and day).
I'm stuck wondering what road I should take. 2 years into B-school I'd be 32, starting as a first year (or if lucky with lateralling though like most ER guys I have little deal experience but can build operating/dcf/valuation models and perform valuations easily) second year associate I guess, and of course I'll need to prove myself and look for exit opps 4-5 years down.
If I take the ER role, its tempting as, although I have to prove myself, its already 2-3 years of b-school, hustling, and opportunity cost gone; money would be good, the team is small, I know the industry I cover inside out, in particular the names I would be given; and I could potentially make a name for myself through the platform.
However, I feel that if I take the ER offer, I'll be pretty much stuck in ER and my chances of working in anything strategic post ER (PE, corporate strategy, investing) are zero/zilch whereas exit opps after M&A i everyone on this forum knows.. At best I get the feeling I would rise up through ER (cushy of course but plateaus after a while and nothing strategic) or move to Asset Management.
I can't sleep at night, someone please give me your candid views. Please no haters/bashers, just asking for advice from mature people.
These are good problems to have. Plenty of people go to business school to get into ER to move over to public markets investing. It's obviously not the common path to go from SS ER to PE, but if you really know your sector that well then it's probably possible. Are you absolutely certain you prefer PE to Asset Management / Hedge funds? If so, B school is a nice though expensive way to reset towards that trajectory. Keep in mind that B School --> M&A --> PE is not a cakewalk. It's what every bank uses to sell candidates but I wonder what fraction of people actually do it, given the quantity of MBAs that show up at investment banks each year. If I were in your shoes, I'd take the BB ER job and get my name out there, then start interviewing for HF/MF gigs. But then again I prefer public markets and would hate how slow stuff moves on the private side. Another interesting option if you think you might like the public side would be to go to B school and interview at all the top hedge funds and long-onlys. People with ER experience before B school tend to do really well in recruiting since there aren't many of them. That way you would get all the intangible benefits of B school (mostly the network) and end up at a highly coveted role in only 2 years, not 4+.
Also interested in this
Dont think you can go wrong. One thing I will say is that if you are 30, you will finish B-school at 32, and 32 is a bit old for an Associate...
Just wanted to also chime in on how these are good problems to have.
I'd honestly go for the HSW b-school, then try ER or HF. Having that name on your resume would pay dividends for the rest of your career.
Thanks for the input guys
Great problem to have like other people have said, but I would probably go to B-school. It's a lot of fun and a resume booster forever. I would honestly shoot for PE right out of B-school. If you try hard enough you might land something vs leaving school at 32 to start a job to maybe transfer into another job. Crazier things have happened and you are not guaranteed PE after M&A either. I definitely feel like just shooting for M&A is not high enough given your experience and a top B school brand behind you, you should shoot for more.
As for ER, the longer you stay the harder it will be to leave. You get promoted one more time past VP and you are probably not going to leave ER. The life gets better once you are an analyst, specially at a BB where you will get a lot of visibility and a great platform. Plus now that you are so close to the finish line, do you really want to start over? That is hard, believe me. I definitely think leaving VP at a BB in ER at 30 to be an associate in M&A at 32 after two years in B-school is a step sideways at best, if not a step down considering how far you would have been had you stayed in ER instead (prob close to analyst).
If you really want to end up in PE you need to go to business school. I think you'll need to go the IB route first after earning your MBA before moving to PE.
For what it's worth, one of my former colleagues (we worked in research at a large long-only shop) went to Wharton with the goal of moving to PE. He basically got shot down cold by PE firms because he had no IB / private markets experience. There are many, many qualified people at top MBA programs competing for PE positions. Just having a MBA from a top school alone is not enough.
If you're happy to stay in ER or possibly move to the buy side I would take the VP position. Not worth it to get a MBA in that scenario.
A little offtopic but all those kids who think they are "stuck in audit" out of undergrad should read about OP's journey and options. Sky is the limit if you work hard and hustle, no matter where you start.
I think you could very well change your mind about wanting to go into M&A after b-school. A top ER gig opens lots of doors to the buyside and in HF and PE (if you want it). People here may say otherwise, I did just that and brought my jr along eventually as well into a top HF so it's quite doable.
I think you will be too advanced and honestly at your age (I'm there now) I wouldn't even think of going into M&A as an associate. A BB ER VP to me is much better and more interesting role with better lifestyle.
any way to defer the MBA for a year and see how you like the ER gig?
My advice, if you are good enough to get into those programs you can go in a year or two as well, go get that BB tag and then go.
Congrats either way!
Agree with the first, not the second. The skillset built in either buy or sell side equity research is completely different from that in IB or PE. One deals with public markets and the other in private markets. Very unlikely that a VP in equity research would be able to successfully move to a reputable PE shop.
Not THAT rare to go from ER to PE to be honest. And I definitely wouldn't go anywhere near saying the "skillset is COMPLETELY different". Have seen quite a few people transition from ER to PE (but I agree with the "if you want it" note - you have to work extra hard to make the move, but it's by no means unheard of, especially if it's for a sector-specialist team role).
I know it happens, but I wouldn't think it's that easy. In my mind, the only similarities between a buy/sell side equity analyst and a IB or PE associate are 1) knowledge of financial statements and valuation and 2) knowledge of "X" industry.
A good public market analyst, particularly on the buy side, has to know how to create screens and deal with the limitations of public vs. nonpublic information. A good IB or PE associate knows how to execute transactions, build and manage relationships, and work directly with management teams. Contrast that to a public market analyst who literally presses a button to execute a transaction and has only high-level interaction with management teams. I think the skill sets are quite different.
I recruited mostly for long only. I didn't find long-only recruiting exceptionally difficult since I had buy-side experience already. I think it would still be relatively straightforward even with only sell side experience. However, the people I knew that had no IB, ER, or IM experience found it very, very difficult.
Really interested in this as well...I always hear that MBA HF recruiting is really, really hard (even from H/S/W), but that never comes from the perspective of someone who was in ER prior to B-school. ER->Top MBA->HF is the path I would like to take over the next few years.
If you are still around Momofuku20, I would love to know which path you took, and more importantly how things look from your vantage point past this decision. I am in the same boat (or rather, the boat you would be in if you had followed some of the posters' advice here and postponed the MBA for the BB ER VP), and can confirm that postponing doesn't a decision make...
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