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......
Much harder than the other way around.
Why do you want to leave the HF industry? Interested
What is your HF strategy?
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.
HF —> PE (Originally Posted: 01/07/2018)
Hi All,
I’ve seen a couple threads on this but haven’t found a clear cut response. I used to work for a BB bank in an industry group and have moved over to a SWF-type firm in a group that invests in North American public equities. The work is HF-ish but we often sign NDAs and review PIPE type opportunities. While I like the investing piece, I really want to be involved in the value creation aspect available at traditional buyout firms. Wanted to get advice on if people think this will be a tough switch to do? Would be very helpful if someone working at a buyout fund could comment.
If possible, would it be best to source opportunities through headhunters / cold emails?
Thanks!
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
You're welcome.
HF to PE through Lev Fin....is the grass always greener? (Originally Posted: 03/10/2015)
Hello chaps,
I am currently working for an event driven HF in London with a focus on HY/distressed credit. Although I enjoy the day to day work I dislike the short-term investment focus of the industry and the whole concept of trying to 'time the market' by jumping in and out of names. I realise that I'm actually more interested in longer-term investing whereby you ignore the day-to-day whims of the market and instead focus on long-term fundamentals. On the surface it would seem that a long-only fund would suit me but I've come to realise that most long-only funds actually care just as much about market volatility and, despite their marketing claims, are not really long-term investors. For this reason I've decided to give the PE industry a look.
Given my lack of M&A/banking background, I was a sell-side credit analyst before my HF job, I have thought about taking 1 step back to move 2 steps forward by going for LevFin jobs. I have recently been offered a number of interviews with banks (outside the top 15 in EMEA) that do a lot of acquisition financing for PE funds.
My question is as follows: I have a nice 7-7 job at a HF that pays well with no weekend work (I'm always reading up on new ideas but I don't count that as work) and I have never worked in a transaction based environment. I think it would be foolish to give that up to go to a non top-10 LevFin team (think SocGen, RBS, Lloyds, Bank of Ireland) where the hours will be much worse and there is no guarantee of a PE job at the end of the day. Am I kidding myself that PE is really a great place for long-term investors or am I better off staying put and being grateful for what I have? Thanks.
Thanks guys
Just move to a similar strategy fund with a longer view.
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
I've seen this done before, though rare, but where the HF and PE firm both have a distressed / deep value focus (i.e. Anchorage / Brigade --> Oaktree / Centerbridge).
Hedge Fund --> MM PE Associate? (Originally Posted: 09/18/2016)
Any tips on making this transition? Spent 2 years doing BB IBD, at a Hedge Fund now and want to PE. Does it make more sense to get an MBA to make the transition or to try to move over now?
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.
Hedge Fund --> MM PE Associate (Originally Posted: 09/18/2016)
Any tips on making this transition? Spent 2 years doing BB IBD, at a Hedge Fund now and want to PE. Does it make more sense to get an MBA to make the transition or to try to move over now?
I have a friend who did 2 years of IB, 2 years of HF. He was able to get a senior associate position at a private equity firm with a similar strategy to a HF. Talk to some recruiters and they'll tell you if they can potentially place you or not.
Credit HF --> MM PE? (Originally Posted: 12/23/2015)
I've been working at a pretty well-known / well respect credit-focused hedge fund for about 6-months now (I was an IBD analyst at a BB before) and I'm just not super enthusiastic about my job here. I don't hate it, but I think i'd be much happier in a more transactional or business-oriented setting and I think I would enjoy PE much more. Has anyone made a similar switch before or have any advice? Would it be best to try to lateral now or would it make more sense to go get an MBA (I think I have a pretty good shot a top program)?
interested as well
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