How easy is it to go from HF to PE?

Wondering regarding the possibility of leaving ($10bn+) HF for (MF) PE... assuming someone joined the HF as an analyst, is this possible and if so, what needs to happen for this to occur? I.e. staying there for 2yrs, having a PM who is willing to make calls to PE's on your behalf......

 
Best Response

Speaking on behalf of my fund (blue chip US fund) and various friends on similar firms: Very difficult to impossible, simply because HF analysts lack the "transaction knowledge" that is necessary for PE (e.g. SPA negotiation, Financing workstream, tax structuring, closing etc.) beyond the pure due diligence / investment judgement activities (which are somewhat similar between the industries and a HF analyst would definitely be able to pick up those skills in no time on the PE job). I would assume you are referring to a 2 year IBD => 2 year HF => (MBA) => PE route, meaning you would aim to become senior associate or VP at the MF PE fund - there is just literally no point for the PE fund to hire a "senior" guy that never saw a SPA before.

Banking => MF PE => HF is much more feasible.

 

Let me first say that everyone you've said makes sense. However, to your last point, I see why someone would take this path if they didn't know they wanted to do HF right off the bat, but honestly I can't see the point of some people first doing MF PE for the direct purpose of eventually moving to HF. After you've done IB, if you know you want to do HF, might as well go for it instead of taking the long way around, as I've heard is becoming a quite a bit more common these days. Thoughts?

 

I think it has to do with a couple things.

1) Top HF interviews are much more difficult than top PE interviews and there aren't nearly as many institutional resources available for analysts 2) HF recruiting is much more random and less structured than PE recruiting. Considering how many more PE jobs there are than HF jobs most analysts recruit for both and if you end up with an offer at KKR or Blackstone you probably won't turn it down for a small chance of getting a HF job 3) A lot of top HFs will use PE as yet another screening process. Smaller pool of supposedly more qualified candidates to sift through

 

It's very difficult post-MBA because PE funds rely on VPs to drive deal execution and don't have time / resources to train you to do it. I think it's possible pre-MBA if you network, have a good story, rapport with headhunters etc. but be prepared to start as a first year associate. All this assumes you did two years in IBD first.

 

Hi CADMonkey, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:

If we're lucky, the following pros may have something to say: Josep-Duran i Priu CaliBankerSF saconsult3

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I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Just move to a similar strategy fund with a longer view.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

I'd say be grateful for what you have - most LevFin bankers would die to get your position!

Plus LevFin (like anything else) gets repetitive after a while (poring through DD reports, writing up credit memo, running models, negotiating term sheets & loan docs....) and the hours would definitely suck compared to your current gig.... and it would be a long shot to get to PE

 

Never known anyone to do this - other way around is far more common. Given your BB IBD background I would recommend trying for PE now, especially if you've been on the hedge fund side IB/pre-MBA associate).

I would just reach out to the typical headhunters to help you set up interviews.

 

I've seen that move happen at both junior and senior level (all the way up to MD). Make up your mind what kind of MM PE funds you want to target and then start reaching out to people in your network and some Headhunters.

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing. See my Blog & AMA
 

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