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11/26/10

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.

Comments (252)

11/27/10

yes to blog

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11/27/10

yes to blog

11/27/10

+1 blog

11/27/10

BLOG PLEASE

11/27/10

blog for sure

11/27/10

+1 to the blog.

You talked about people who go to a HF straight out of IBD vs doing so after two years of PE possibly being further along than those who waited. If a HF is where you'd ultimately like to be (for whatever reason), what utility is there in going to PE first? Is it strictly a risk/reward equation, a question of available opportunities, a matter of peer pressure, etc?

11/27/10
drexelalum11:

+1 to the blog.

You talked about people who go to a HF straight out of IBD vs doing so after two years of PE possibly being further along than those who waited. If a HF is where you'd ultimately like to be (for whatever reason), what utility is there in going to PE first? Is it strictly a risk/reward equation, a question of available opportunities, a matter of peer pressure, etc?

The utility of going to PE first is that you will have buyside experience. Different hedge funds want different things, some hedge funds like to take kids as fresh as possible (straight from undergrad in certain instances) and mold them. Others want kids who have already been somewhat vetted (after 4 years of banking/PE you are starting to become more of a professional with some semblance of a skillset). Others are in between. My advice is if you truly want to work at a hedge fund, do it as soon as possible. If you do 2+2, you will probably get some credit for having 4 years of experience, but you will most certainly not be functioning at the same level as the kid who quit bakning a year in and is now 3 years into his HF job. With any job, there is always a 6 months to a year adjustment process, even if you are coming in with a perfect resume, people still need to work around you enough to understand your work style and develop trust in you. A PM is going to be more comfortable with the 26 year old he has seen perform for 3 years, rather than the kid who has a nifty resume. Again, you will probably get credit for your experience above and beyond a kid who has 2 years of ibd experience, but hedge funds are fairly unstructured (some more than others), so it's not as clear cut about where you stack up on the seniority ladder. One thing a lot of people need to understand is that the HF world is not as structured as the IBD/PE world.

From what I've seen, people generally do the IBD/PE route for a few reasons: 1) everybody else is doing it 2) they don't know what else to do and they like succeeding and doing prestigious things 3) they want to go to b-school 4) it buys some more time before you have to really decide what you want to do 5) you might actually want to do PE. My advice is that in life, if you know you want to do something, it generally makes sense to just go ahead and do it, nobody is impressed if you took the longer path.

11/27/10

I haven't recruited first hand in London, but I would imagine they have their own set of recruiters over there. Look, with headhunters of any kind, there is nothing to stop you from reaching out to them. There is no social decorum that says you have to sit desperately by your phone waiting for them to call you. My feeling is that the PE recruitment process is less structured than it is in the U.S., but from what I've seen, it is fairly similar to the extent that a lot of those guys worked at bulge bracket banks before doing PE, albeit in the london office.

11/27/10

delete.
Sorry, did a search.

11/27/10

I love the blog idea!

What UG colleges were most represented at KKR besides Harvard and Wharton?

11/27/10

Great thread, I doubt Ill ever find my way into PE, but I absolutely appreciate the time and effort you put into this!

Blog: +1

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

11/27/10

a blog would be awesome!

quick question:

Have you seen people who started in PE after just 1 year (add 2-3 months) of IBD? If recruiting takes place in spring/summer and you get an offer, whats the point in doing bitch work an extra year when you could start right away (assuming there's an open position). And assuming there's no position right away, what stops people travelling for a year (or anything really) and then start work - does your PE contract say anything about 2 years in IBD are mandatory

11/27/10

Thanks again for being so helpful.
I don't know if you'll have time to answer but:
How do headhunters find you?
In your opinion, what's the best way to make yourself available to them?
Should you have a linked-in?
I mean, it's not like MS M&A has a list of first-years that they forward along to headhunters right.

11/28/10

Thanks for taking the time to give detailed responses.
Look forward to reading your blog.

1- Do certain headhunters/firms focus on BB and others focus on MM? Or is it the same firms doing both?

2- Since headhunters contact the BB analysts they're interested in, how do headhunters find you if you're not at a BB, but a MM IBD, instead?

11/28/10

All this is accurate. I'd add a few things:

a) KKR and BX are better for hedge fund recruiting, the other places push you into B-school. Seems like a silly consideration now, but it's important. It creates optionality.

b) 250K all-in sounds pretty low. Pretty sure standard is 300k+ all-in (the + due to whatever phantom equity, associate carry etc program the fund has, 300k cash)

c) PE and Megafund PE are getting commoditized at an accelerating rate. Think about the long-term before you make that plunge. Still good places to start, but good places to stay? Hmm.

11/28/10

Thanks for all of your helpful answers so far.

I'm currently an IB analyst at a bb firm, and looking go transition into PE. I missed the first wave of recruiting and am now getting one-off interviews for off-cycle firms. I want to stay in NYC, but several people in PE have told me to be open to any location if I really want to do PE. If I were to go to a PE firm in a non-traditional PE city like Philadelphia or Baltimore, then go to bschool, I assume I'd still be able to come back to NYC if i want to do PE there. Would be great to get your thoughts on the pros/cons of doing a pre-MBA post outside of NYC.

Thanks

11/28/10

+1 on the blog

11/29/10

As many people have said, thanks a lot for the thread. What would KKR (or BX/TPG/Bain/Carlyle for that matter) think of an analyst from a tier 1b (pardon the tiering, but think CS, BarCap, BAML) in an industry group (think TMT, C&R, Consumer Retail)? Very strong technical skills and modeling experience, and very strong drive to succeed in finance with a passion for working at a mega fund. Are they super-aristocratic during interviews where your chances are strongly discounted if you did not graduate summa from an ivy and come from a pure M&A group? How do you suggest to angle the industry group experience (I have some thoughts but wanted to hear your ideas) to convey "I know the modeling/math just as well as any product guy, but I also know how to analyze an industry and understand a wide array of products"? Thanks.

11/29/10

Got a question for you... whats the relationship between quality of references versus brand name of bank? So what if you're at BNP Paribas with someone making calls on your behalf that is super hooked up? If you're at a less than stellar PE-sourcing bank, can you have access to the same top PE funds on account of an extremely hooked up senior banker making calls on your behalf?

11/29/10

Thanks for all the great advice.

11/29/10

+1 for blog.

11/29/10

+1 for blog. Thanks again for your help!

11/29/10

+1 for blog

11/29/10

MS M&A 2005-2008 holla.

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11/29/10

Slaying -- what has been harder, getting into MS M&A from college, getting into PE from banking, or getting into hedge funds from PE

11/29/10

Guys, I don't think he's gonna answer anymore questions, that's why he asked us if we want him to start a blog.

12/1/10

PM'd.
Thanks

12/5/10

The blog would be amazing. Let me know if I can help. Thank you again 10xleverage, best ever thread I have read on this or any related forum!

-ibanking101

12/11/10

any thoughts the pros and cons of staying at your bank as an associate vs. going the megafund route?

thanks a lot

6/16/11

thank you

1/1/12

Nominate: This was hands-down one of if not the best thread on this site in 2011.

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

1/2/12
A Posse Ad Esse:

Nominate: This was hands-down one of if not the best thread on this site in 2011.

Definitely.

1/2/12

^^^ true true

I want a lady on the street, but a freak in the bed,

Go Bucks!!

1/2/12

expect it was 2010

1/2/12

Correct, but I would argue most people found it in 2011 since everyone would always say "search for 10xleverage's thread!" It really became the seminal thread for megafund PE.

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

1/3/12

No doubt my favorite thread on WSO.

1/4/12
10xleverage:

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.

Just found this, I'm late to the party. Thought I'd ask a question in case you'll still see this.

I'm interested in getting into PE at one of the megafunds, and am from a non-trad background. Curious as to your thoughts on 1) worth trying? and 2) positioning experience Here's my deal:

Penn undergrad
GS TMT for 2 years
left to start a software company, which I've been doing for 4 years.

Interested in Tech PE.

Raised money for company from top investors, built strong network of senior folks who were mentors as I built co. Introduced successful products to market and innovated in a strong niche area. Company is still going forward, but I'm ready to move on w my stock and remain chairman. Interested in buying co's now:)

Would love your thoughts on your sense of my ability to position this to KKRs / BXs / etc etc. Thanks man!

1/4/12
starterup:
10xleverage:

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.

Just found this, I'm late to the party. Thought I'd ask a question in case you'll still see this.

I'm interested in getting into PE at one of the megafunds, and am from a non-trad background. Curious as to your thoughts on 1) worth trying? and 2) positioning experience Here's my deal:

Penn undergrad
GS TMT for 2 years
left to start a software company, which I've been doing for 4 years.

Interested in Tech PE.

Raised money for company from top investors, built strong network of senior folks who were mentors as I built co. Introduced successful products to market and innovated in a strong niche area. Company is still going forward, but I'm ready to move on w my stock and remain chairman. Interested in buying co's now:)

Would love your thoughts on your sense of my ability to position this to KKRs / BXs / etc etc. Thanks man!

Were you College or Wharton at Penn?

And you're far from 'non-traditional' actually.

1/5/12
seedy underbelly:
starterup:
10xleverage:

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.

Just found this, I'm late to the party. Thought I'd ask a question in case you'll still see this.

I'm interested in getting into PE at one of the megafunds, and am from a non-trad background. Curious as to your thoughts on 1) worth trying? and 2) positioning experience Here's my deal:

Penn undergrad
GS TMT for 2 years
left to start a software company, which I've been doing for 4 years.

Interested in Tech PE.

Raised money for company from top investors, built strong network of senior folks who were mentors as I built co. Introduced successful products to market and innovated in a strong niche area. Company is still going forward, but I'm ready to move on w my stock and remain chairman. Interested in buying co's now:)

Would love your thoughts on your sense of my ability to position this to KKRs / BXs / etc etc. Thanks man!

Were you College or Wharton at Penn?

And you're far from 'non-traditional' actually.

I was a political science major at Penn, so College, not Wharton. But one of about 3 lib. arts guys to go to GS my year, out of 37 total in my class (to all parts of GS).

And thank you for your point on not being as non-traditional as I was concerned about:) My worry was that I'd need to explain doing something other than investing right out of the analyst program.

3/24/12

Rich enough to have your own jet. ... A player. Or nothing

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There is a WILL, there is a WAY.

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