Best Path to Megafund?

I would go for option 1. Whenever I have looked at the backgrounds of associates at those types of places they tend to have graduated with some sort of distinction from a top university and worked at MS or GS in a top group

option 1 is the more "traditional" route.

i would have to think that working in private equity straight out of undergrad would be far more attractive than spending 2 years doing pitchbooks, company profiles and simple models. You get a much more hands on, in depth experience working in pe even during the down times since you are working on existing portfolio companies rather than acquisitions. Nonetheless i am sure working in a well respected firm in a top group is a great stepping stone. The developments in the markets over the past several years have opened the opportunity for undergrads to go straight into private equity. For those who want to go into the industry, i would think that many would rather bypass two years of ib and go straight in.

I think the typical path is top banking analyst to pre mba associate in MM PE to MBA to Megafund.

Thanks guys, I know what the "typical" and "traditional" path is. Obviously, going from undergrad straight to a top MM PE shop is very rare and difficult to do. That's why when you look at associates at megafunds most of them came from GS TMT or MS M&A. Very few go from undergrad to MM PE to megafund simply because it's so hard to do in the first place.

With that said, if you were a recruiter from BX PE, would you take the Ivy grad who did the "traditional" thing at an investment bank or would you take the Ivy grad who jumped straight into a relevant PE shop? I'm with Barbara and I'm inclined to say the latter.

what is "top MM PE"? any examples?

looking at the entire incoming classes at 3 megafunds, all were at top-tier banks/MBB/or in the private equity groups at these banks...

if it's a "top" MM PE shop, what's the point in shifting over to a megafund... difference in comp and experience will be negligible

LOL... keep telling yourself that if it makes you feel better. Why the f did you even bother posting this question if all that you were looking for was affirmation that your sh*tty job will someday get you into KKR/BX/Carlyle/TPG. Instead of feigning a question, you should've just posted a command, "Tell me that I will eventually get a job at a mega-fund". Then the responses might be more to your liking.

To answer your inane question however, many idiots unqualified for BB banking (I'm sure you know some not-so-typical bankers who might fall into this category) end up settling for also-ran jobs at MM PEs... yes, I know many 3.2's from my school who are now working at "top MM PE shops" making a whopping 35k a year!

FCF -top as in Audax, New Mountain, Golden Gate Capital, etc.

No b2 I am still in school. Have internships at a top BB and top MM fund under my belt. Thanks for your concern though.

Seems that all those "idiots unqualified for BB banking" who settled for jobs at MM PEs fared better than those "qualifed BB stars" that I saw on the cover of the NY Times carrying boxes out of Lehman/Bear/Merrill (I even saw a couple of Wharton shirts, and yes, I feel bad for them).

My point is that everyone who does have a job right now should be happy. Also, I know that everyone on this board will have their own opinion and I can respect that; it's when you start putting down other people that the whole purpose of this board goes out the door.

Granted, the OP's question was inane, but here's my answer: Transactional experience + a built-in network will make the biggest difference in an interview vs. whether or not you worked for a BB or MM PE.

WestCoastChimp - Obviously it's a rough time for the industry, and I thank my lucky stars everyday that I'm employed. Last year, I went through the sh*t that the current college seniors are going through right now, and I know what a bloody awful situation it is to be in.

Regardless, my complaint wasn't about the merits of MM PE versus BB IB; my complaint was that this thread was created SOLELY to satiate the insecurity of the OP. He wants someone to pat him on the back, tell him how awesome his job is, maybe provide a little heavy petting... what a waste of peoples' time to read this sh*t. His insecurity completely seeps through in his post and he gets immediately defensive when the answers don't cater to his liking. As I stated before, he's not seeking advice; he's seeking affirmation.

Notyourtypicalbanker - it's great that your still in school... so it's not your sh*tty job that you're insecure about, it's your sh*tty prospective job, (which you don't even have yet). You got no-offered at JPM -- and not even in NY -- you had to settle for HK where the bar is set lower, and now you're wondering whether your lack of offers/opportunities in IB will be detrimental long-term. I read you like an open book.

"Is it me or does it feel really good over here in the buy side, specifically in the mid market sphere?"

*rolls eyes*

B2, dont make comments you are not qualified to make. I have freinds who went straight into PE in small funds >400 million, and who earn almost what bankers earn (55k base and 50k bonus this year) and who work around 50 hours a week (Sure its not the 60-65k base and the bigger bonus, but not bad). Clearing 6-figures and leaving the office by 7 is pretty good for a 22 year old. 35K a year?? Yea maybe one of the associates assistants earns 35k a year.

westcoastchimp, thanks for your answer.

LOL giocatoredoro - judging from your past posts, and this most recent one, I am easily 1000x smarter than you are and I definitely know infinitely more about the subjects on which I speak than you do.

to giocatoredoro's point, if OP is going to any of the firms he mentioned (Audax, GGC, NMC), he will not be working 50 hours a week... analyst position at audax is only slightly better than banking in terms of lifestyle.

lot of other factors to consider in this decision (including comp., the economy, location, etc), but historically, i would have said GS TMT/MS M&A > Audax. probably not the case with GGC/NMC, but i haven't heard of them recruiting from undergrad. if you have an offer at the "top MM PE firm", just ask the first years/second years where they've placed for their next job... if it sounds like they haven't interviewed or haven't considered leaving, it's probably a sign that they haven't secured interviews or the firm isn't supportive of analysts interviewing with other funds.

fyi: top MM pe firms are firms like Golden Gate, H&F (if you consider them MM), Berkshire Partners, MDP, GTCR, Providence Equity Partners... Audax should not be considered in the same tier.

Why do u say that about audax? Hours aside, they have a great rep, strong returns, and are really active in the market. I know undergrads at my school who chose them over McK and GS.

the idea that everyone at MM shops is waiting to jump to a megafund is silly. A lot of people have no interest in being at a big firm doing huge deals...

FreeCashFool,

What is MDP? Is it Madison Dearborn Partners?

Thanks.

Yes

FCF, no disrespect intended, but I don't consider PEP, GTCR, and H&F true mid-market players. Providence is sector specific meaning they invest in media and telecomm with equity investments of $250M to $2.5B - a bit too large to be considered mid-market. GTCR, while they are based in the midwest, I also wouldn't consider them a mid-market fund among the likes of Audax, GGC, Berkshire, and New Mountain. And H&F is nowhere near a mid-market private equity firm.

What is it about Audax that makes you feel like the opportunity to jump to a megafund is not as readily available as it is coming from GS/MS? Maybe it's like ad12 said and junior guys at MM PE firms simply don't feel the need to make the transition, so there is a huge unknown factor there. GS/MS has a track record and proven history of sending analysts to top buyout shops, but firms like New Mountain don't simply because they don't have "analysts" in the traditional sense of the word.

curiousG: yes - madison dearborn

ad12: i'm not badmouthing audax, i'm just saying if OP is going to quote "top-tier MM PE", he shouldn't be comparing it to Golden Gate. audax is a great place to work in private equity, but most people would take any of those shops i listed over audax purely based on prestige (which is sadly based on the fact that those other firms are tougher to get into). people glorify audax on this board because they're undergrads and they recruit on-campus... at the end of the day, it's a reputable mid-market firm with solid returns where you'll get a good experience.

as far as me being "silly" -- you're reiterating what i initially posted -- i asked why he would want to switch to a megafund if he's already in top MM PE when difference in comp/experience are negligible.

notyourtypical: fair -- you might not consider those MM's, i'm not interested in discussing whether audax is top-tier or not -- you can form your own opinion on that, seems like you already have. i also didn't say that it's difficult to move from audax to a megafund... i'm telling you that if you want a real perspective on this and if you indeed have an offer from them, you should talk to 1st and 2nd years and see where they've placed. GS/MS/MBB are just the more traditional routes to megafund PE... unless you have proof from Audax that there have been analysts who have made the move, why gamble

Thanks model21 & FreeCashFool for clarifying.

I am curious as to how do you define "MM" PE firms? I know some firms specifically call themselves "MM" firms, but what if it's not clear?

Is it based on their AUM? If so, what is the borderline btwn mega-funds and MM shops?

Thanks in advance.

another option is consulting.

megafunds also like to choose associate/analysts from top consulting firms because they have more experience of general strategy.

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