How to move from MBB to PE

Can anyone comment on the best way to transition from MBB (analyst level) to PE? I'm joining an MBB office in the fall and understand that PE recruiting generally happens very quickly after that (April/May). Would it be useful to learn/practice some financial modeling before I start work so I can even be considered for interviews? Anything I should be doing well in advance to prepare?

Any advice or experience is helpful, thanks.

 
Best Response

It depends on which MBB you're at. In terms of PE recruiting, Mck>Bain>BCG. BCG guys can (and do) make it, but for the sake of our sanity, let's assume that you're at McK/Bain. Your best bet among Mega-Funds is obviously Bain Capital. For technicals, pretend that you're an M&A Banker, and learn accordingly. But don't fall into rote memorization, make sure to understand exactly why something happens in a model. Get into the nitty gritty of it all. But from my experience, if you're doing it right, technicals should be the least of your worries. Behavioral/fit is by far, the most important part.

Read CompBanker and 10xleverage's threads for more info.

Calling Ron Paul an isolationist is like calling your neighbor a hermit because he doesn't come over to your property and break your windows.
 
  1. Best way to transition: use headhunters. All the top PE funds use headhunting firms for their pre-MBA associate positions. Top headhunting firms include CPI, McKibben, Oxbridge, SG Partners, Amity Search Partners, Henkel Search Partners, and Stephen James Associates.

  2. Timing: send the headhunters your resume 6 months after beginning work (so Dec/Jan timeframe). Recruiting seems to be getting earlier and earlier each year (although this year the big funds have agreed to wait until late summer / early fall ... we'll see if that really happens). Recruiting will likely take place in April/May (so like 9 months after you started working).

  3. Preparation: depends on the funds to which you plan to apply. If you plan to focus on funds that have a history of hiring MBB consultants (Bain Cap, Berkshire, Advent, Charlesbank, American, etc.), you probably won't need to have as much financial modeling expertise as with some other firms better known for hiring bankers (KKR, TPG, Apax, Carlyle, etc.). The key is to earn excellent ratings at your MBB. The PE firms use MBB as a screening tool for their candidates - if you can perform at a high level at MBB, they assume you must be intelligent and capable of being a PE associate. Also, make sure to do a few engagements where you own the model (in consulting, models are typically operating models, versus LBO models in PE, but that should be fine for interviews). Caveat: if you do plan to apply to KKR, TPG, etc., you'll need to know how to pass the LBO modeling test you're likely to get in the interview process.

  4. Before you start, think about the type of PE firm you want to join. There are pros/cons to megafunds versus mid-market, generalist versus industry-focused structures, NYC versus Boston versus San Fran, etc. Unlike consulting, where there are a very small number of top firms, there are literally dozens of great PE firms. So you'll need to triage in advance based on your preferences.

Btw, ledger123 is right. Getting in post-MBA w/o prior experience is essentially impossible. Maybe doable at a tiny fund where you've networked your way in, but that's about it.

 

Thanks. I did know about those two but I was wondering more generally if most firms are open to hiring consultants or if they simply cannot because they do not want to train them modeling skills, and also specifically which of the mega funds other than Bain Cap would do so (e.g. TPG, Blackstone, THLee, Warburg Pincus, etc.).

 
  1. yes, but very difficult. you should be looking to apply at all points given how difficult it is. aka always be networking, interviewing, etc.

  2. yes, banking will greatly increase your chances. so will starting your own co. leave as soon as you find a job that will teach you move and put you in a better position for growth equity. i.e. technology banking, established start up companies, or smaller companies.

look up every firm in private equity and look at their associates. if they have hired an associate with consulting backgound, it means they will consider you. example: golden gate and huntsman gay

 

How about coming out of 1 or 2 years at Bain or somewhere else doing PE consulting? This should obviously make your chances better, but realistic actually is it?

 

It's very difficult--there are a limited number of funds that hire consultants, and they pretty much all can draw just from MBB.

But for general tips off the top of my head: --Network, and in particular be proactive in reaching out to headhunters --Try to get on relevant cases where possible (e.g. DD work) --Honestly, target smaller/less regarded funds to some extent. It's kind of harsh, but you have almost no chance of ending up at a Bain Cap or Berkshire-type place. Those guys can already skim off the top 10% of MBB analysts (and do). Consider focusing on someplace else (something like Lee Equity or maybe Charlesbank comes to mind as examples, but I'm not as familiar with that chunk of the market)

Lastly, undergrad pedigree/etc can help to some degree. Recruiters do sort for things like undergrad, GPA, SAT scores, so you'll be better off if those are strong.

 

agreed, it will be very difficult to make this move. I can imagine that for some smaller funds they may consider you but most large cap PE and respected MM PE funds will solely look at MBB if outside of banking. Nothing is impossible so a solid network will give you a good head start and can open doors. Contact headhutners in the MM space and yes def get PE experience before an MBA

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A: wrong forum B: very hard to do so unless you are MBB and even then its harder than coming from the lower boutique banks unless its a bain friendly pe shop like that one PE firm around here. Same stuff as everyone else, you network and talk to headhunters and pray. If you aren't MBB just don't bother.

 

Hey bark,

   I'm only a sophomore and don't have an incredible amount of knowledge in the finance industry but I networked with alumni from my institution (non-target) and he went from Arthur Anderson Consulting to Bain <abbr title="private equity"><abbr title="private equity">PE</abbr></abbr>. Obviously this is an outlier but its doable if you have the right connections. After Bain Private Equity he moved on to an MD role at a mid market <abbr title="private equity"><abbr title="private equity">PE</abbr></abbr> where i will be fortunate enough to do a coop this semester. Good luck and happy new years.
 

Depends on your consulting firm, your region and the PE house.

  1. Region: Much easier in Asia, more challenging in US. Not sure about Europe.

  2. Consulting Firm: MBB will very much preferred. Any other consulting firm will have a much tougher time. Mgmt consulting is almost a must. Forget about tech consulting firms such as Accenture.

  3. PE House: PEHs such as Bain Capital and Audax like consultants a lot. Majority of the well-known PEHs will prefer bankers though.

 

In Europe it's actually easy coming from McKinsey and Bain and ok if from BCG or a good non-MBB firm. This is for consultant friendly firms though, and the mega funds seem to prefer bankers indeed. It's definitely impossible coming from IT or process consulting, and while I personally don't know of any Accenture people in PE for example, I could imagine consultants from their strategy practice making the move.

 

I see, thanks guys.

I was actually just wondering about the application process in general. After having done a very centralized job application process through University Career Services, I want to know how it works once you are actually in the workforce. I know I may sound like a retard, I just don't really know how the whole thing works

 

Thanks - any others? I'm under the impression that Bain Cap's NY office is small and doesn't usually hire associates.

If I'm looking to stay in New York, what other possibilities are there? How much would I be limiting myself if I made geography a primary criterion in the search?

 

You should go for a mixture really. Getting due diligence experience is obviously great but also try to add some 'portfolio' work i.e. restructuring, normal growth strategy projects, etc. You should ensure to cover many different industries also, avoid getting pigeonholed early (which isn't always easy given the staffing dynamics in consulting if you're not careful).

 
m2:
You should go for a mixture really. Getting due diligence experience is obviously great but also try to add some 'portfolio' work i.e. restructuring, normal growth strategy projects, etc. You should ensure to cover many different industries also, avoid getting pigeonholed early (which isn't always easy given the staffing dynamics in consulting if you're not careful).

That definitely makes sense. Any other opinions?

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