Former PE Associates - How Hard is it Actually to land a post-MBA PE position?

All,

For all the present / former PE MBA associates who can speak to this - based on empirical observation (or conversations with people that have actually gone through the process), assuming an MBA from HSW, how hard is it actually for a pre-MBA associate to land a post-MBA senior associate or VP position? (different firms will assign different titles to the post-MBA role).

We've all heard the statistic something along the lines of "1 position for every 3-4 pre-mba associates" but anecdotally, how true is that? From conversations I've had with post-MBA PE associates, I've heard generally that assuming (1) you came from a reputable MM+ firm (call it $1bn+) and (2) you attended HSW and (3) have some networking ability, everyone eventually "finds something they wanted". How true is that statement?

Obviously the best path here is to lock up a post-MBA role before even matriculating to business school (or avoiding business-school altogether) - but for the vast majority of pre-MBA associates out there, that's not really an option. The separate debate of whether an MBA is worth it at all has been debated ad nauseum so won't touch upon that here.

Appreciate any insights

 
Best Response

From my experience, it's true that everyone who had pre-MBA experience did fine, but I am not sure I would go as far as to say that everyone got what they wanted. If you look at the facts, it's clear that there are fewer post-MBA positions than there are pre-MBA (a bschool classmate had done some benchmarking around 3 years ago and on average, there was 1 post-MBA positions for every 3 pre-MBA associates). Similarly, If you look at at HSW employment reports, you see a drop in the % of the class that goes to PE/VC vs. the % going in.

Obviously, lots of people decide that PE isn't for them and go on to do other things (HF, AM, startup, corp dev, etc) which account for a significant % of "lost" positions. Then a lot of people get "sponsored" by their firm so they know they have a job waiting for them once they're done with the MBA. For those 2 groups of people, I think most will get "what they wanted".

Then you are left with people who haven't been invited to come back at their previous firm (or didn't want to) and I think the results for those are a little more mixed. Most will place at good firms (although it's very common to take a step down in terms of fund size). However, I know quite a few people who didn't succeed in placing at at a "reputable" fund and had to settle for a lesser position (ie. corp dev, family offices, SWF / Pension Funds, banking, etc). Objectively speaking, that group still got very good jobs that a lot of their peers would have taken without question, but I'd say that most in that group would at best be somewhat disappointed with where they landed. For example, a dude I know worked at a MF, went to GSB and ended up doing corp. dev. at a very "cool" firm (think Google, Disney, Apple, FB type). Obviously my buddy did very well, but his #1 priority was going to back to PE so you can't really say he got what he wanted.

 

Thanks - very insightful. How prevalent are firm sponsorships? Anecdotally, I know a few firms do it (typically the MFs - Bain comes to mind) and I know some are switching to a direct-promote model. However, for the majority of the solid MM / upper-MM, I know it's much more sparse and done "unofficially" (in some cases only telling the associate of the opportunity after the completion of the 1st year of B-school). I can't imagine that there is a significant number of MBAs who have sponsored slots...

Also mtn - sounds like you went to MBA - taking a step back, would you say that experience has been additive to your overall personal / professional experience? Do you think it matters down the line? There are more and more lateral opportunities and I think that's a viable path - but I'm not sure I'm ready to forgo the "unknown" benefits of getting an MBA in exchange for what basically amounts to a 2-year acceleration in compensation.

 

Very few firms will outright sponsor people in the sense that they'll pay your tuition and guarantee you a job, but it make sense to retain your best performing associates rather than hire a completely new person. On the other hand, PE firms know that no one is getting a full time offer before fall their 2nd year at the earliest so they have time and don't have to tell people right away. There are some funds (primarily in the upper MM) that prefer to kick out their associates and hire MBA grads with "better experience (ie. people who worked at MF) though.

Regarding the value of an MBA, there's a ton of discussion on the site so not sure I can add that much, but I'm not sure it make sense anymore for someone with a 2+2 background to do an MBA if they can get a direct promote or lateral.

 

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