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In the spirit of thanksgiving, I have decided to host a thread where you can ask all you ever wanted about banking or PE. Please feel free to ask away.

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Comments (250)

  • Kanon's picture

    Are you familiar with MS's Firm Strategy & Execution group? Any idea on the exit ops for this group (or similar internal Corp Dev/Strategy at other large IBs) into PE? There doesn't seem to be a lot of info on such groups - quite curious.

  • 10xleverage's picture

    I'm going to give it to you straight, if you want to maximize your shot at PE, you're going to want to stick to the traditional IBD groups where you get more of the analytical exposure that PE firms will want you to have. The firm strategy & execution group (or most internal corp dev groups at banks for that matter) will not provide you that background, even if you are gaining the MS brand. That said, I would pick an "inferior" bank where you can get better skills, perhaps M&A at a boutique. Of course, to the extent you can move into one of the more classic banking groups at MS (or a similar bank), that should be your first choice.

  • ixjunitxi's picture

    What is the compensation structure/salary like for 1st year PE Associates at mega funds particularly at KKR. There seems to be more transparency for IBD/S&T but not so much for PE? Additionally, did you have to do a case study or take a modeling test for your interview with KKR?

  • greenapple's picture

    in your opinion, what are the major differentiators of candidates that are able to gain entry into and succeed in the upper echelon shops? obviously there are hundreds/thousands of junior bankers every year, but only a handful get top buyside gigs, and even fewer are able to keep progressing. similarly, what made you so successful?

    also, could you share your general thoughts on the rat race? if you were to go back, would you change anything? and now that you're in a pretty enviable spot, do you see yourself working just as hard to keep climbing the ladder? Whether you plan on continuing or not, if you were to leave finance, what would you do?

  • In reply to ixjunitxi
    10xleverage's picture

    ixjunitxi:
    What is the compensation structure/salary like for 1st year PE Associates at mega funds particularly at KKR. There seems to be more transparency for IBD/S&T but not so much for PE? Additionally, did you have to do a case study or take a modeling test for your interview with KKR?

    Basically compensation is comparable to that of a 1st year associate at an investment bank, maybe a little higher. KKR base is 100k which is along the same lines of some of the other comparable mega funds (BX, Carlyle, Bain, TPG). THL pays 125k, Apollo is known to pay 140k. Some other shops are all over the place (not confirmed but heard Crestview pays 150k). On the bonus side of things, it is fairly volatile, 400k a year may have happened once upon a time, but is certainly not realistic anymore. All-in comp is probably targeted somewhere in the 250kish range for the major shops. Regarding the case study, KKR does do a case study but it is not as rigorous as everyone makes out to be. It is basically a test where you will analyze a business using the information they provide you and you will be asked to put some materials together using excel, but then you will have a conversation with an associate or principal about what you put together. The modeling exam should really be the least of your worries because if the finance is not intuitive to you at that point, you will have an even more difficult time in the interview when you are expected to think on your feet.

  • In reply to greenapple
    10xleverage's picture

    greenapple:
    in your opinion, what are the major differentiators of candidates that are able to gain entry into and succeed in the upper echelon shops? obviously there are hundreds/thousands of junior bankers every year, but only a handful get top buyside gigs, and even fewer are able to keep progressing. similarly, what made you so successful?

    also, could you share your general thoughts on the rat race? if you were to go back, would you change anything? and now that you're in a pretty enviable spot, do you see yourself working just as hard to keep climbing the ladder? Whether you plan on continuing or not, if you were to leave finance, what would you do?

    I think personality is typically key, there are more than enough number crunching asian monkeys from wharton (pardon my language) that could fill the ranks of all the major mega funds. They key is to not only have those same number crunching skills, but also the other skills necessary to be the full package. I think as with anything else luck plays a large role in anything, but it is important to stay focused. Although you may not land your top choice whether that be in banking or PE, if you work very hard and have your stuff in order, you will likely be able to land a pretty good banking job, and a pretty good pe job (even if that means citi and madison dearborn, instead of gs/ms, kkr/bx etc.) At the end of the day, all this shit is more or less the same and the incremental difference between shops isn't as monumental as some people on this forum make it out to be. That said, for the most part brighter people will tend to be at better shops.

    Regarding my thoughts on the rat race, it is what it is. I don't think I would change anything as I recognize that I am in a fortunate spot. That said, any kid who is 3-4 years out of school and thinks he has it made just because he works in PE is a bit delusional. A career in finance really starts in the junior MD role, everyone else is a glorified slave. As far as staying in PE, I don't think it is what it once was now that many of the premier PE funds have started to go public (KKR included). They aren't the nimble organizations (with the same upside potential) that might have existed a generation ago. To be fair though, there may not be as much upside in finance in this generation as in generations past.

  • In reply to Mzz
    10xleverage's picture

    Mezz:
    What are your hours like?

    Contrary to popular belief, even for the so-called "New York sweatshops," the lifestyle is significantly better than in i-banking. There is a greater degree of dignity afforded to your time and quality of life in PE that certainly does not exist as a junior banker at a large investment bank. Yes, when you are on a deal, you are a slave again, but it is usually for a much better reason than a client-service pitch book. On average, you will probably get in a bit earlier (8:45 AM or so) than banking, but you will probably also leave around 9pm or so on average. The perks are also better, expensing policy is more lax, and you eat lunch in a dining hall. That said, when times are tough, they are tough, and that is finance afterall. Net net, definitely better than banking.

  • jtbbdxbnycmad's picture

    Hi, I like the spirit of your thread.

    Is it still possible to transition into PE if you're a post-MBA IBD Associate, or is one perceived as more expensive than an analyst but also less open to being a grunt? Or is the post-MBA track a long-term career move that only gives you options once you reach MD level (where, as you say, you stop being a glorified slave and then your value is in your decision-making skills, network, etc)?

    I believe I have the chance to get perhaps 6 months of pre-MBA PE experience at a small-ish fund, through networking. Would that make a significant difference during MBA recruitment, or would IBD still be the only option in the world of M&A?

    Thanks! Enjoy the turkey and pumpkin pie.

  • chiphifrat's picture

    Does KKR (and most mega-funds nowadays) have a 2-year and out program, or do they encourage you to stay for a while? If they do encourage you to stay for a while, do most people still go to B-school after two years?

  • PennJamin's picture

    Thanks for the thread -- it's refreshing to see something relevant on this forum. How well are the elite boutiques (GHL/EVR/LAZ/BX) represented in the top megafunds? Do you think they are overhyped on this forum?

  • Stringer Bell's picture

    Any advantage of M&A over Sponsors?

  • In reply to jtbbdxbnycmad
    10xleverage's picture

    jtbbdxbnycmad:
    Hi, I like the spirit of your thread.

    Is it still possible to transition into PE if you're a post-MBA IBD Associate, or is one perceived as more expensive than an analyst but also less open to being a grunt? Or is the post-MBA track a long-term career move that only gives you options once you reach MD level (where, as you say, you stop being a glorified slave and then your value is in your decision-making skills, network, etc)?

    I believe I have the chance to get perhaps 6 months of pre-MBA PE experience at a small-ish fund, through networking. Would that make a significant difference during MBA recruitment, or would IBD still be the only option in the world of M&A?

    Thanks! Enjoy the turkey and pumpkin pie.

    Appreciate the support. Regarding the transition into PE at the post-MBA IBD level, it is incredibly difficult to get into a megafund (especially in this market) if you are not from a traditional background. KKR will typically only really look at you if you did 2 years at a top bank, 2 years at top PE and then HBS. Are the only people in the world qualified enough to work in PE made of this mold? Absolutely not. Is life tough? Yeah, it can be. That said, absolutely do not make post-MBA decisions with an eye towards exit opps, this typically turns out badly. Associates in IBD do have exit opps, but they are not as clear and regimented as their analyst counterparts. In middle market shops it is probably not as regimented, but you will still absolutely need meaningful pre-mba experience that is hopefully related to finance. Exceptions to the rule always exist, but I am just generalizing here because generalizations are the easiest things to discuss.

    Regarding the value of the MBA, it absolutely helps, but nobody is making promotion decisions based upon where somebody (or if) went to business school. However, a person may have a significantly better network because of their MBA contacts. That said, there are partners at KKR who skipped the MBA and are doing just fine. To each their own, and you really have to weigh the costs and benefits when you are faced with it. It is unlikely though that somebody will be a superior dealmaker solely because of the fact they have an MBA. Lately the trend seems to be that b-school for non career switchers is coming out of vogue, but that said, an MBA will still provide more career versatility down the road.

    Regarding your plight, I would suggest you try and get that pre-mba PE experience as it will significantly boost your profile (and relevance) when you apply for those jobs post-MBA. You should not take a cut in pay or responsibility to get this position though as it will look weird on your resume or as you speak about it.

  • In reply to chiphifrat
    10xleverage's picture

    chiphifrat:
    Does KKR (and most mega-funds nowadays) have a 2-year and out program, or do they encourage you to stay for a while? If they do encourage you to stay for a while, do most people still go to B-school after two years?

    Generally 2 year and out although this is becoming less so. You will see some superstars these days getting promoted to the post MBA level although there is still a preference for the MBA. Many kids also will leave to go to hedge funds (tiger cubs and the like) as the large PE funds are becoming more bureaucratic (it comes with the territory when you are publicly traded) and as such, harder to advance in. There isn't that much encouragement to stay, it's still a dog eat dog work place, so it's not like you're in a fund of 10 people where people are begging you to stay. You can still be replaced.

  • In reply to PennJamin
    10xleverage's picture

    PennFranklin:
    Thanks for the thread -- it's refreshing to see something relevant on this forum. How well are the elite boutiques (GHL/EVR/LAZ/BX) represented in the top megafunds? Do you think they are overhyped on this forum?

    Appreciate it, god only knows how much filth is spewed in this forum. I've been a reader for quite some time and can't begin to explain how much misinformation is shared on this website. The elite boutiques are good for megafunds but the top groups are as follows:

    GS TMT far and away #1
    GS FIG / BX Restructuring
    MS M&A

    After that, it's good to be in any of the major M&A groups (or other industry groups at GS/MS), merrill's legacy m&a group which is now in BAML is pretty good, citi M&A is pretty good, the boutiques are also good (Lazard and BX M&A are terrific although Greenhill and evercore are a step behind in recruiting, moelis also does well since UBS LA had a strong track record of placement on the west coast at tpg and kkr west coast). The fact of the matter is, if you are not in one of these groups, it is an uphill battle. If you are in one of these main groups that I've mentioned, recruiters contact you, and all you do is submit your resume, and the rest is history. I never cold called a fund once, nor do they particularly want you to call them. They know what groups they generally want to reach out to, and they go back to them year after year. Again, is this fair? No. However, it is generally a good way to fill up a class if 8-10 people because on average the kids at GS are smarter than the kids at CS and so on. It's just a fact of life. Kids from non targets absolutely do occur, but they will need to do more networking through their own senior people, or through winning the ear of headhunters. Like anything else though, once you get an interview, the playing field is fairly flat. KKR's not going to take some bumbling fool from GS tmt over some stud in UBS just because he's from a better group.

  • In reply to Stringer Bell
    10xleverage's picture

    Stringer Bell:
    Any advantage of M&A over Sponsors?

    Yes, M&A is better, you do real analysis there. Sponsors is more of a relationship manager for PE funds. Although you are exposed to PE funds, it doesn't matter much at the junior level since you aren't the real relationship manager. Be in M&A if you can. If you're in sponsors (especially at one of the better banks), it's not game over, but M&A is superior.

  • ss1000's picture

    How is JPMorgan? Any specific groups that have good exit opps?

  • mitchmcdeere's picture

    Hey 10xleverage, thanks a lot for your answers. Really appreciate them!

    Do you know how things work in Europe? Is PE Megafund Recruiting significantly different compared to the US?

    Thanks a lot in advance.

  • eating926's picture

    I guess I want to know is what you're up to now? You said you're a former MS/KKR, so I'm interested in why you left and do you see a lot of PE guys leaving like you did?

  • ametista's picture

    Thank you for the post, finally something I can dig my teeth deep into.

    What I wanted to ask is: can you still get into a top PE shop if you work in a top IBD but in continental europe instead of london/US?

    To make things clear: if one had an offer from Lazard or MS for a M&A place in Milan, would it erase completely every hope of making it to the buy-side? If not, what would be the steps to follow?

  • In reply to ss1000
    10xleverage's picture

    ss1000:
    How is JPMorgan? Any specific groups that have good exit opps?

    Forgot about JPM, great firm. M&A is clearly the top group, but they are fairly strong across the board. JPM's rep has certainly improved post-crisis and has come closer to GS/MS in IBD than it was in years past. Amongst the bulge brackets they are probably in 3rd place, but would still choose some of the boutiques over them (Lazard, BX, maybe a few others).

  • In reply to mitchmcdeere
    10xleverage's picture

    mitchmcdeere:
    Hey 10xleverage, thanks a lot for your answers. Really appreciate them!

    Do you know how things work in Europe? Is PE Megafund Recruiting significantly different compared to the US?

    Thanks a lot in advance.

    Don't know much about Europe so don't want to say anything with too much authority. That said, all the big shops have London offices so that is a start. However, the finance world is a bit different in Europe since there isn't as much focus on the MBA and it isn't as regimented as it is in the US (e.g. 2 years analyst, 2 years pre-mba assoc, mba, etc.). I imagine if you are in the U.S., you should recruit into a U.S. office, and then try to push for mobility to Europe.

  • In reply to eating926
    10xleverage's picture

    eating926:
    I guess I want to know is what you're up to now? You said you're a former MS/KKR, so I'm interested in why you left and do you see a lot of PE guys leaving like you did?

    Don't want to out myself so will not tell you my whereabouts at the moment. That said, KKR and BX from what I've seen are a bit more open to promoting directly past the post-MBA level, although a decent amount will go to hedge funds and b-school too. Carlyle/TPG/Bain are extremely pro-business school and rarely if ever will directly promote. In fact, TPG and Bain try a lot to sell how great they are at sending people to HBS (although from what I've seen, placement amongst all the top funds is fairly excellent). The lure of the hedge fund scene is if you can get into a Greenlight or Pershing or the like, you will be making more and potentially have a more interesting job than continuing on the well trodden path of PE (which can feel crowded at times, despite how well-promising it is). Once you do the 2 and 2 thing, it is very important that you have an idea of what you truly want to do because you have more or less reached the end of the traditional path. Can't follow your peers forever.

  • blastoise's picture

    What was the most fun you had working at both firms? (throwing footballs, volleyballs etc)

  • In reply to ametista
    10xleverage's picture

    ametista:
    Thank you for the post, finally something I can dig my teeth deep into.

    What I wanted to ask is: can you still get into a top PE shop if you work in a top IBD but in continental europe instead of london/US?

    To make things clear: if one had an offer from Lazard or MS for a M&A place in Milan, would it erase completely every hope of making it to the buy-side? If not, what would be the steps to follow?

    Again, don't have much experience with the European scene but this sounds like it would be tough. The headhunters will traditionally look for candidates in their typical hunting grounds, and Europe (especially non-London europe) is not the first place to look on their list. If you were in Europe, I would look at some of the funds out there, I would imagine Permira (the best fund in Europe arguably) would probably be open to you. That said, when KKR is looking to pick up 10 kids, it just doesn't make sense to go looking for a diamond in the rough in the middle of Europe. Doors will still be open to you, but it will be on you to reach out pro-actively to headhunters to raise your hand ahead of time and make sure you are on their list when they start deciding who they want to put in front of the mega-funds.

  • In reply to 10xleverage
    BonsaiBanker's picture

    10xleverage:
    PennFranklin:
    Thanks for the thread -- it's refreshing to see something relevant on this forum. How well are the elite boutiques (GHL/EVR/LAZ/BX) represented in the top megafunds? Do you think they are overhyped on this forum?

    Appreciate it, god only knows how much filth is spewed in this forum. I've been a reader for quite some time and can't begin to explain how much misinformation is shared on this website. The elite boutiques are good for megafunds but the top groups are as follows:

    GS TMT far and away #1
    GS FIG / BX Restructuring
    MS M&A

    After that, it's good to be in any of the major M&A groups (or other industry groups at GS/MS), merrill's legacy m&a group which is now in BAML is pretty good, citi M&A is pretty good, the boutiques are also good (Lazard and BX M&A are terrific although Greenhill and evercore are a step behind in recruiting, moelis also does well since UBS LA had a strong track record of placement on the west coast at tpg and kkr west coast). The fact of the matter is, if you are not in one of these groups, it is an uphill battle. If you are in one of these main groups that I've mentioned, recruiters contact you, and all you do is submit your resume, and the rest is history. I never cold called a fund once, nor do they particularly want you to call them. They know what groups they generally want to reach out to, and they go back to them year after year. Again, is this fair? No. However, it is generally a good way to fill up a class if 8-10 people because on average the kids at GS are smarter than the kids at CS and so on. It's just a fact of life. Kids from non targets absolutely do occur, but they will need to do more networking through their own senior people, or through winning the ear of headhunters. Like anything else though, once you get an interview, the playing field is fairly flat. KKR's not going to take some bumbling fool from GS tmt over some stud in UBS just because he's from a better group.

    Just curious why GS FIG is ranked so highly...in terms of modelling skills FIG seems to be so different and less transferable than TMT or Healthcare...or it is just due to the increase deal flow in FIG?

  • Olympus123's picture

    Can you explain what the culture is like among the different companies in the sell-side and buy-side (out of the ones you know)? I hear a lot of rhetoric about this but it'd be great to hear a more straight-forward interpretation.

  • monty09's picture

    can we drop the pm's and ask questions on board..very good chance someone else would like to know the same thing.

    10xleverage...thanks for taking some time to provide some advice

  • In reply to blastoise
    10xleverage's picture

    blastoise:
    What was the most fun you had working at both firms? (throwing footballs, volleyballs etc)

    I had a great time in banking, made some of my best friends in banking and will be in touch with them for many years to come as we all develop in our careers. In banking (especially as an analyst) there is this "us" vs. "them" (meaning everybody else, clients, associates, everybody), that makes for a truly fun experience. That said, I got worked very hard. We all had multiple experiences of pulling all-nighters on weekends, getting called back to the office, being miserably tired all the time, etc. In the end though, I would probably do it all over again (it's easy for me to say though because things worked out okay in the end, I'm sure it would be a tougher pill to swallow if things hadn't worked out as well). In PE, it is a more professional / less fun environment. We are business formal everyday, people are much older (even the really senior people like Kravis sit on the floor, albeit very far from the slaves), and there is less joking around. You don't really build the same friendships like you do in banking. Your relationships are more professional and are more business contacts. Overall though I had good times at both, and while neither experience was perfect, no job really is. Like any job, you get what you pay for, you might get worked, but usually you do it knowing you will be compensated (both financially and in terms of opportunities). No such thing as a free lunch.

  • monkeyspells's picture

    Really appreciate that you're doing this!

    I'm currently at a semi-target in Canada and trying to grab something for my last internship next summer.

    My school offers a wide variety of positions in Toronto, but for the U.S. positions we're pretty much on our own. I'm finding it hard to network very much aside from a few contacts at my current internship who came from the U.S. Would you have any advice on what I should be doing to increase my chances? Even on places like linkedin most of my alum seem to work for unrelated groups at these firms (i.e. tech) or have restricted contact information.

    Thanks again!

  • 2x2Matrix's picture

    This is great, thanks for doing this (though of course we all still love CompBanker and the other PE guys here). Did KKR hire consultants when you were there? Obviously Bain is the most consultant-friendly megafund, but do the other ones ever go that route? And if so, is there anything particular that they're looking for in an MBB consultant?

    One of those lights, slightly brighter than the rest, will be my wingtip passing over.

  • In reply to Olympus123
    10xleverage's picture

    Olympus123:
    Can you explain what the culture is like among the different companies in the sell-side and buy-side (out of the ones you know)? I hear a lot of rhetoric about this but it'd be great to hear a more straight-forward interpretation.

    Like I said in my earlier post, banking was just more fun for a host of reasons. The shenanigans you can pull in banking just are unacceptable in PE. I would not be caught dead dozing off in PE but as an analyst in banking, there's nothing more comical than a banking analyst passed out in his seat. I will always look back at my banking experience fondly and still keep in touch with both junior and senior people that I have worked with there. The buy-side is a mixed bag, if you are working at sequoia it will be much different than KKR. Some buy-side joints are more laid back, KKR is the other extreme. The culture is more discernible when you have a group of 120 people instead of 12000 people like at a large investment bank. Although MS has a culture, it is not as cogent as KKR's. While there is a lot of cool factor with the KKR culture, it wears off fast when you realize the shit sandwich tastes the same on the buyside as the sellside. Overall though, would work at both places again in a heartbeat, the people I worked with at my times in both firms were top notch.

  • In reply to monty09
    10xleverage's picture

    monty09:
    can we drop the pm's and ask questions on board..very good chance someone else would like to know the same thing.

    10xleverage...thanks for taking some time to provide some advice

    Yes, please post in the forum as I'd prefer answering here. Thanks.

  • Kenny_Powers_CFA's picture

    Sounds like basically all post-MBA hires have previous PE experience, what's the breakdown of previous megafund vs midmarket etc?

    Do megafunds ever hire pre-MBA analysts from other buyside shops?

    You mentioned people going to HFs and smaller shops after their two years-do you feel like it's a natural transition from PE to liquid markets?

    Thanks for the insight.

    There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

  • International Pymp's picture

    Excellent forum. It's nice to see people getting such sound, realistic advice. I'd certainly award a SB if I had one.

    I particularly enjoyed reading this:

    "KKR will typically only really look at you if you did 2 years at a top bank, 2 years at top PE and then HBS. Are the only people in the world qualified enough to work in PE made of this mold? Absolutely not. Is life tough? Yeah, it can be."

    Fucking comedy... and also very true.

  • blastoise's picture

    do people at either firm check wall street oasis other than you?

  • In reply to monkeyspells
    10xleverage's picture

    monkeyspells:
    Really appreciate that you're doing this!

    I'm currently at a semi-target in Canada and trying to grab something for my last internship next summer.

    My school offers a wide variety of positions in Toronto, but for the U.S. positions we're pretty much on our own. I'm finding it hard to network very much aside from a few contacts at my current internship who came from the U.S. Would you have any advice on what I should be doing to increase my chances? Even on places like linkedin most of my alum seem to work for unrelated groups at these firms (i.e. tech) or have restricted contact information.

    Thanks again!

    The main targets in Canada from what I've seen are Ivey (I believe this is at Queen's) and McGill, outside of those schools I am less familiar. I would continue doing what you're doing as far as networking with your American colleagues and be open to potentially interning for a summer in Canada and then using that as a spring board into a U.S. position. It will be an uphill battle, but you will have to be aggressive about utilizing whatever network you do have (and if you are at a semi-target, you should be able to find someone who can help you) into finding a lead. If you are only a sophomore, you will have plenty of time to get this process going, if you are a senior, time is not on your side. You should start now though as it will not be as easy as coming from a U.S. target.

  • In reply to 10xleverage
    ametista's picture

    10xleverage:
    ametista:
    Thank you for the post, finally something I can dig my teeth deep into.

    What I wanted to ask is: can you still get into a top PE shop if you work in a top IBD but in continental europe instead of london/US?

    To make things clear: if one had an offer from Lazard or MS for a M&A place in Milan, would it erase completely every hope of making it to the buy-side? If not, what would be the steps to follow?

    Again, don't have much experience with the European scene but this sounds like it would be tough. The headhunters will traditionally look for candidates in their typical hunting grounds, and Europe (especially non-London europe) is not the first place to look on their list. If you were in Europe, I would look at some of the funds out there, I would imagine Permira (the best fund in Europe arguably) would probably be open to you. That said, when KKR is looking to pick up 10 kids, it just doesn't make sense to go looking for a diamond in the rough in the middle of Europe. Doors will still be open to you, but it will be on you to reach out pro-actively to headhunters to raise your hand ahead of time and make sure you are on their list when they start deciding who they want to put in front of the mega-funds.

    Thanks for the great answer.

    One last thing: can you tell me some PE shops active in europe, aside from Permira? Even not top ones.

  • need_your_thoughts's picture

    For a first year analyst at good bank in Chicago (one that you mentioned in your list...with execution in Chicago), but a low GPA (3.5) from a solid regional school (Illinois/Indiana type), am I going to be at a severe disadvantage for PE recruiting? Do PE shops have a GPA cut-off and does that vary by school? I obviously don't expect to get into a megafund given my stats, but was wondering if you knew how solid MM PE shops may view someone with my background.

    Also, do you think making a lateral switch to a NY office after my first year will help my cause? Thanks a lot for this thread.

  • In reply to 2x2Matrix
    10xleverage's picture

    2x2Matrix:
    This is great, thanks for doing this (though of course we all still love CompBanker and the other PE guys here). Did KKR hire consultants when you were there? Obviously Bain is the most consultant-friendly megafund, but do the other ones ever go that route? And if so, is there anything particular that they're looking for in an MBB consultant?

    Yeah KKR will hire consultants from time to time, really only McKinsey, not familiar with any BCG or Bain guys, and even the McKinsey guys will need to have a finance bent to them (think Wharton UG, or they were in McKinsey's corporate finance group which is a glorofied IBD group within Mck). If you want to do PE, do not go into consulting (even if it's McKinsey), you will have a much more linear path going to one of the main target banks. Bain is far and away the most consultant friendly, they hire about 10-12 people each year, with 6-8 having been consultants (they primarily only look at mckinsey and bain and maybe a little bcg). the other funds may take 1 consultant if that each in any given year. If you're a consultant, there's no question you will be able to do porter's 5 forces nonsense in your sleep, the main question is if you can do finance (which is why if you are some history major coming out of bcg, the odds will be heavily stacked against you since you will not know your finance as in depth as some wharton/gs nerd). If you are coming from consulting, your best bet is to sharpen your finance skill set independently or get assigned on projects with a corporate finance bent where you can get up to speed on these things. KKR will not have any patience though for some mckinsey kid who needs a year to get taught the basics, at this point in your career the time for handholding has stopped.

  • In reply to blastoise
    10xleverage's picture

    blastoise:
    do people at either firm check wall street oasis other than you?

    Yes, everyone does, but a lot of people don't participate for fear of being exposed or because this place is filled with so much shitty information it is not even worthwhile trying to participate in a constructive manner.

  • panther2k's picture

    Thanks for coming on here...

    Do you have any advice for managing the PE recruiting process? Headhunters are starting to reach out to people now and I'd be interested to hear how you handled everything. Should we work with every search firm that contacts us? Only the "best" ones? Is there anything you can do to make sure you're at the top of their list when they're deciding who to put in front of clients?

  • In reply to Kenny_Powers_CFA
    10xleverage's picture

    Kenny_Powers_CFA:
    Sounds like basically all post-MBA hires have previous PE experience, what's the breakdown of previous megafund vs midmarket etc?

    Do megafunds ever hire pre-MBA analysts from other buyside shops?

    You mentioned people going to HFs and smaller shops after their two years-do you feel like it's a natural transition from PE to liquid markets?

    Thanks for the insight.

    First and foremost, nice handle, love eastbound and down, great show. Regarding hiring pre-mba people from other shops, it does happen, but again it is few and far in between. This will happen in more frothy times when the fund realizes they underhired and will need to find someone very quickly, this will not happen in the traditional course of recruiting. That said, KKR will not say "we need a class of pre-mba associates, let's recruit at GS/MS and TPG." In a frothier market though, KKR might in the middle of the year try to pick up a kid from TCV or some mid-market fund or something like that.

    Regarding the transition to smaller shops, I think what happens is that kids just get fed up working in a bigger place and want to work in a smaller environment. One of the frustrations of PE is that it is a fairly slow environment, although the big funds will do large prominent deals, the odds of you working on one of the blockbuster deals are small because KKR might only do 3 deals a year, and there are 10 associates in a class, it's a numbers game. In the public markets, you may be putting on smaller positions, but they are shorter horizons and more frequent which (for some people) is more interesting. That said, it is certainly a lot of fun to have the things you work on be on the front page of every paper and blog (which absolutely happens when you work at a big fund, if you are lucky to be working on one of these deals). Not everyone goes the hedge fund route, I think it is actually a pretty good split between those who go back to b-school and stay in PE (at KKR or another fund), and those who go to hedge funds. A lot also comes down to the market. In worse markets, kids will go to b-school because there are not as many options, in better markets, the hedge fund opportunities are just to good to turn down so oftentimes people will bypass business school altogether. The decision oftentimes really comes down to the market environment you are in and what options you have on your plate.

  • In reply to 10xleverage
    2x2Matrix's picture

    10xleverage:
    2x2Matrix:
    This is great, thanks for doing this (though of course we all still love CompBanker and the other PE guys here). Did KKR hire consultants when you were there? Obviously Bain is the most consultant-friendly megafund, but do the other ones ever go that route? And if so, is there anything particular that they're looking for in an MBB consultant?

    Yeah KKR will hire consultants from time to time, really only McKinsey, not familiar with any BCG or Bain guys, and even the McKinsey guys will need to have a finance bent to them (think Wharton UG, or they were in McKinsey's corporate finance group which is a glorofied IBD group within Mck). If you want to do PE, do not go into consulting (even if it's McKinsey), you will have a much more linear path going to one of the main target banks. Bain is far and away the most consultant friendly, they hire about 10-12 people each year, with 6-8 having been consultants (they primarily only look at mckinsey and bain and maybe a little bcg). the other funds may take 1 consultant if that each in any given year. If you're a consultant, there's no question you will be able to do porter's 5 forces nonsense in your sleep, the main question is if you can do finance (which is why if you are some history major coming out of bcg, the odds will be heavily stacked against you since you will not know your finance as in depth as some wharton/gs nerd). If you are coming from consulting, your best bet is to sharpen your finance skill set independently or get assigned on projects with a corporate finance bent where you can get up to speed on these things. KKR will not have any patience though for some mckinsey kid who needs a year to get taught the basics, at this point in your career the time for handholding has stopped.

    If you are a history major coming out of McKinsey/Bain and you're looking to prove your finance skills, would passing the CPA be helpful? Obviously it's an assload of work, but would the combination of that and McKinsey be enough to convince them that you can do the work?

    One of those lights, slightly brighter than the rest, will be my wingtip passing over.

  • In reply to ametista
    10xleverage's picture

    ametista:
    10xleverage:
    ametista:
    Thank you for the post, finally something I can dig my teeth deep into.

    What I wanted to ask is: can you still get into a top PE shop if you work in a top IBD but in continental europe instead of london/US?

    To make things clear: if one had an offer from Lazard or MS for a M&A place in Milan, would it erase completely every hope of making it to the buy-side? If not, what would be the steps to follow?

    Again, don't have much experience with the European scene but this sounds like it would be tough. The headhunters will traditionally look for candidates in their typical hunting grounds, and Europe (especially non-London europe) is not the first place to look on their list. If you were in Europe, I would look at some of the funds out there, I would imagine Permira (the best fund in Europe arguably) would probably be open to you. That said, when KKR is looking to pick up 10 kids, it just doesn't make sense to go looking for a diamond in the rough in the middle of Europe. Doors will still be open to you, but it will be on you to reach out pro-actively to headhunters to raise your hand ahead of time and make sure you are on their list when they start deciding who they want to put in front of the mega-funds.

    Thanks for the great answer.

    One last thing: can you tell me some PE shops active in europe, aside from Permira? Even not top ones.

    To be honest, really don't know the scene for PE shops that just do Europe. All the big american funds have large and fairly autonomous operations in Europe, so you should really be looking at those. KKR/BX/Carlyle etc. all have offices abroad and large presences there. These days too with so much opportunity being overseas and with people pushing into emerging markets, the megafunds are still great places to work at since most of the opportunity in NYC has been captured by people higher in the food chain. Big American buyouts done by NYC firms is kind of a thing of the past, these firms aren't stupid though and are making a big push abroad. All in all, I would just look at a lot of the european offices of the firms that are already household names in america.

  • In reply to need_your_thoughts
    10xleverage's picture

    need_your_thoughts:
    For a first year analyst at good bank in Chicago (one that you mentioned in your list...with execution in Chicago), but a low GPA (3.5) from a solid regional school (Illinois/Indiana type), am I going to be at a severe disadvantage for PE recruiting? Do PE shops have a GPA cut-off and does that vary by school? I obviously don't expect to get into a megafund given my stats, but was wondering if you knew how solid MM PE shops may view someone with my background.

    Also, do you think making a lateral switch to a NY office after my first year will help my cause? Thanks a lot for this thread.

    PE shops don't necessarily have a gpa cutoff, but there is no question they like to see academic excellence (when you are only picking up 10 kids, you can have your cake and eat it too ). That said, if you are not focusing on the top tier of megafunds you will be fine, especially if you are coming from a good bank regardless of whether it is the Chicago office. Like anyone else coming from a semi-target bank, you will need to network hard (both with firms, but also with headhunters so that they can get you interviews), and when you are in the interviews, you will have to take care of business like anybody else. The MM PE shops are less of sticklers with focusing kids with a perfect resume. Like any other job, if you can display your intelligence and drive, you have as good of a shot as anybody. You will have to do more leg work though to get the same interviews your bulge bracket NY peers might take for granted though.

    Regarding a switch to NY, yes, I would say to go for it if you could swing it. If it is a serious annoyance to your life, then don't, but everything else being equal, do it. More recruiting is done in NYC, more firms, more headhunters, more everything is in NY, it will just be straight up more helpful and make it easier to network by being in NY.

  • ibanking101's picture

    10xleverage, thank you so much for this thread. You are awesome!

    You mentioned before that at some point you have to stop following the track and just mirroring your peers.

    What are the common things that pre-MBA PE associates do following their two to three year stint? What percentage would you say stay in PE vs. do other things? What are those "other things" typically? And what are the reasons for doing them?

    Thank you!

  • In reply to panther2k
    10xleverage's picture

    panther2k:
    Thanks for coming on here...

    Do you have any advice for managing the PE recruiting process? Headhunters are starting to reach out to people now and I'd be interested to hear how you handled everything. Should we work with every search firm that contacts us? Only the "best" ones? Is there anything you can do to make sure you're at the top of their list when they're deciding who to put in front of clients?

    There is no special strategy, it's like anything else in life, stay on top of your game and just crush ruthlessly. Do not turn down interviews or count your chickens before you hatch. Work with all the search firms and cast a wide net, but also make sure to be straightforward with them about what you want (do not say you are open to working in Chicago if you are not going to do this, it is a waste of everyone's time). That said, you should interview as much as you can as the practice is good for you, especially as you build up to the more difficult interviews at the megafunds. I interviewed at several megafunds an these interviews can be prepped for, but the more preparation the better. You cannot go in to one of these interviews cold and expect to hit it out of the park, that is why it is important to interview as much and as early as you can so that you get a hang of it. Regarding the headhunters, make sure to be likable. If you're an asshole and nobody likes you, that is a big problem and it will hold you down. I mean there is only so much you can do, if you are annoying and not likable, it doesn't matter how quickly you can compute WACC in your head. The headhunters function as gatekeepers, so it is important that they like you, or else they will not put you in front of the best firms. You will have preliminary interviews with the headhunters, and although they will not be as rigorous as the real deal, they are important for making it to the next step, so you should treat them with the same respect you would treat a final round with your top choice fund, because in some ways, it is just as important.

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