MM to PE - the impossible; thoughts?

All -

I'm a junior at a semi-target and recently accepted a summer analyst (IBD) gig with Stifel NYC. Assuming I work there fulltime, is transitioning to a good PE shop possible (based on its brand name)?

Have you heard of any Analysts from Stifel getting into PE or any good buy-side shops?

My ultimate goal is MBA so don't know what good exit opps are available from Stifel outside of lateraling to another bank.

 

I"m afraid no PE firm has ever taken a Stifel analyst. The only PE you could ever do is teach Physical Education.

But seriously, perform well this summer and get an offer. If you like it, stay. If not, go to another bank FT. The amount of worrying over prestige on this site is ridiculous. Stifel is a solid shop and you'll have opportunities to interview at some good PE firms if you do well there.

 

they typically have trouble getting looks from anything except lower MM PE. Every once in a while, somebody will land at a decent PE shop, but its fairly rare. Best bet is to lateral if you want good buyside opps.

if you're at Stifel and want PE tho, do Tech/HC.

“Success means having the courage, the determination, and the will to become the person you believe you were meant to be”
 

MFs (e.g., KKR/BX/etc.) will take top BB/EB kids Upper MMs (e.g., THL/MDP/etc.) will take average BB/EB kids PE firms below upper MM will take below-average BB/EB kids and top/better than average MM IBD kids (i.e., you, assuming you perform well).

For your "ultimate" goal of bschool, Stifel will suffice, assuming you're content with schools outside the MBA business schools ">M7 (though you may have a shot at some lower M7s depending on your profile).

 
SwaGGeReR:

MFs (e.g., KKR/BX/etc.) will take top BB/EB kids
Upper MMs (e.g., THL/MDP/etc.) will take average BB/EB kids
PE firms below upper MM will take below-average BB/EB kids and top/better than average MM IBD kids (i.e., you, assuming you perform well).

For your "ultimate" goal of bschool, Stifel will suffice, assuming you're content with schools outside the MBA business schools ">M7 (though you may have a shot at some lower M7s depending on your profile).

seriously? this seems very generous. Upper MMs, especial basically megafunds like THL/MDP do NOT take average BB/EB kids, they take top kids from GS/MS/JPM/etc. Not much difference in quality between a kid going to THL and going to TPG. this post really underrates how tough it is to get a job at one of those shops

 
SwaGGeReR:

MFs (e.g., KKR/BX/etc.) will take top BB/EB kids
Upper MMs (e.g., THL/MDP/etc.) will take average BB/EB kids
PE firms below upper MM will take below-average BB/EB kids and top/better than average MM IBD kids (i.e., you, assuming you perform well).

For your "ultimate" goal of bschool, Stifel will suffice, assuming you're content with schools outside the MBA business schools ">M7 (though you may have a shot at some lower M7s depending on your profile).

As @"wso_user" indicates above, you're dramatically understating the difficulty of obtaining a job in PE. Upper MM shops like the ones you've listed are lined with top analysts from top groups on the street. There are far fewer jobs at MFs and Upper MM firms than there are analysts in the top groups alone. Those analysts who get offers from outside the traditional "top groups" are typically top-notch analysts in their groups. This "average analysts go to Upper MM firms" is utter nonsense.

I know a host of "average (and above average!) analysts" at BB/EBs that would be happy to take an offer at a number of funds "below the Upper MM".

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 

I should note, by "average" I meant those outside of the top analysts in the top groups (e.g., GS TMT/MS M&A, etc.). In any given year, there are only a handful of these kids, and most of them land MFs. Then you're left with what I originally called "average" BB/EB kids. This subset includes non-top (though still very good) kids from top groups, as well as top kids from non-top groups (e.g., the top kid from CS M&A). As you can see, the competiton for MFs is unreal. For upper MMs, as you can see, the competiton is still extremely intense, which is why I said that OP, coming from Stifel, would likely end up at a shop below upper MM.

 
SwaGGeReR:

I should note, by "average" I meant those outside of the top analysts in the top groups (e.g., GS TMT/MS M&A, etc.).

So, by "average analysts", you did not actually mean "average"? What was the purpose of the adjective, then?
SwaGGeReR:
In any given year, there are only a handful of these kids, and most of them land MFs. Then you're left with what I originally called "average" BB/EB kids. This subset includes non-top (though still very good) kids from top groups, as well as top kids from non-top groups (e.g., the top kid from CS M&A).
I do hope that we are operating under the same definition of "top", viz., "well above average" or "elite". How can middle-bucket analysts at "top" groups and "top" analysts at upper-mid tier groups possibly be classified as "average"? They are definitionally not "average".
SwaGGeReR:
As you can see, the competiton for MFs is unreal. For upper MMs, as you can see, the competiton is still extremely intense, which is why I said that OP, coming from Stifel, would likely end up at a shop below upper MM.

The sentiment you express here is dramatically different than the one in your original post. Before, you implied that "average BB/EB analysts" would be the recipients of upper MM offers. I can assure you that "average analysts" at any BB/EB would be thrilled to receive an offer from the likes of THL or MDP, which you listed.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 
SwaGGeReR:

I should note, by "average" I meant those outside of the top analysts in the top groups (e.g., GS TMT/MS M&A, etc.). In any given year, there are only a handful of these kids, and most of them land MFs. Then you're left with what I originally called "average" BB/EB kids. This subset includes non-top (though still very good) kids from top groups, as well as top kids from non-top groups (e.g., the top kid from CS M&A). As you can see, the competiton for MFs is unreal. For upper MMs, as you can see, the competiton is still extremely intense, which is why I said that OP, coming from Stifel, would likely end up at a shop below upper MM.

If you actually went through PE recruiting, you'd know that analysts who receive offers from ANY PE firm are above average. The majority of analysts across the street do not make it to the buyside.

 

What exactly is the difference between an "average" analyst and a "top" analyst? What kinds of factors go into this? Attitude? How hard you work? Likeability? Modeling skill?

 
tmtmtmt:

What exactly is the difference between an "average" analyst and a "top" analyst? What kinds of factors go into this? Attitude? How hard you work? Likeability? Modeling skill?

All of the above. I would also mention value-add input in meetings and accuracy. It should be fairly clear within a month or two who the "best" analysts are in your group; they'll have great rapport among senior bankers, get first looks for the best staffings, be the "go-to guy" when colleagues have questions about this-or-that modeling practice and likely will be one of the more vocal analysts in team meetings.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 

If you have a good story and are strong there is hope. I came from nowhere near a target school (think ranking in the 200s) and a non-name brand boutique (well below Stifel) to an upper MM ($3+ billion) PE shop. It's by no means an easy road but its doable.

 

I go to one of the four schools I listed above. Almost all of the major BB banks recruit my school, of course some more than others, but at a MM investment bank, is it possible to get to megafunds like Bain Capital or Carlyle? How about more regional PE funds?

 

It's certainly possible to get into a megafund from a MM, but it is highly, highly unlikely (not that it's necessarily likely from anywhere, given the hiring needs/standards). If you look around the profiles of associates at these funds, you'll notice it's ~98% guys who came out of BBs and EBs but every now and then you'll come across an associate from a MM (sometimes who was at another PE firm first but then latereled over). In summary, I wouldn't bank on it.

I'm not sure what you mean by more regional PE funds - even smaller funds (sub-$500 mm) usually look at investment opportunities nationally (often globally) and recruit from banks around the entire country. If you're coming out of HW, RWB or WB, you'll certainly have opportunities to interview with solid MM PE firms.

 

You won't start out in MM PE without a banking program unless they specifically have an analyst program (which is rare).

There are a few headhunters who recruit for banking at the analyst level, but not a ton. One that comes to mind is Tom Ragland at The Harrison-Rush Group. They are generally looking for experienced analysts, which your IB internship may or may not qualify for.

You need to start networking and get a better idea of the middle market/boutique IB space. Without an extremely solid connection at Jefferies, Houlihan or Lazard (I'm talking immediate family) you will have a lot of difficulty breaking in as an off cycle analyst hire. You should really be focused more on boutiques or middle market banks that play a bit further downstream. In the DC area you could probably find a few solid A&D boutiques that might be open to non traditional analysts.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 

If you do get an MBA, your chances of getting into PE are pretty much fucked if you didn't do PE before hand.

Coming from a respectable MM bank, you should have access to a lot of the MM PE funds your bank serves.

The most valuable part of my banking experience (in terms of getting into PE) was working with our PE clients. Seeing how they look at a deal, how they do their diligence, how they view the world, the words they use, etc was the best way to learn to emulate them. I interviewed (across a span of time) probably at a dozen or so PE firms, and the ones I was most successful at were the ones where I had worked on their deals, attended meeting, listened in on calls etc... That's what I would target, the PE firms you guys serve.

I've seen a bunch of analysts from the Harris Williams and Robert Bairds of the world up at very very solid private equity shops. If you're from a lesser shop... maybe you won't end up at Kelso of MidOcean but at a firm the next rung down... still an enviable position to be in.

I'm sure @CompBanker can add to this having come from a similar background.

 

pryan2016,

The answer to your question of course is "it depends." The vast majority of PE professionals start in PE before doing their MBA, so the "if I don't get an MBA" component of your question doesn't really make sense. No one competing for associate PE roles will have an MBA at that point. Is your question "how likely will I be able to progress in my firm without an MBA?" The answer to that question is also "it depends." The vast majority of PE firms require their associates to go get an MBA with few exceptions. There is really no rule that governs which do and which don't. If someone looking for PE jobs is absolutely against getting an MBA, they should definitely find out if it is a requirement BEFORE accepting the job.

The second part of your question, "what types of firms would I be looking at," depends largely on which bank you end up at. Marcus' answer was perfect. If you're at Harris Williams, Blackarch, or other top MM banks, the vast majority of PE firms will be open to you (anywhere in the country). If you're at a bank with few deals and poorly connected MDs, very few PE firms will give you the time of day. The best way to tell is to look at the profiles of associates on the websites of PE firms you're interested in joining. MM PE firms are generally quite consistent in the "tier" of banks they hire from.

The third part, "how hard would I have to network," is the biggest wildcard. If you're a rockstar analyst, your MD will pick up the phone for you and make the connection. If you're terrible, no one will endorse you and you'll need to network hard. If you're at Harris Williams / Blackarch / similar, networking will be a piece of cake. If you aren't, networking will be difficult. If you're a star interviewer, you'll only need a few interviews to secure the job. If you aren't, you'll need to keep networking hard. You get the idea.

pryan2016 -- I believe that you are a rising junior in the class of 2015 based on some of your other posts. If so, you're way too far ahead of yourself here. I understand the desire to plan, but there are way too many uncertainties between where you are now and the scenario posed in your questions. I recommend that you try to secure a banking internship next summer and see how it goes. I think you'll find the answers to the vast majority of your questions during the internship.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 
Well-paid Slave:
I know first hand how HW literally fights on your behalf to place you into MM PE shops. MDs really go to bat for their analysts...

I have heard that but it is nice to hear you confirm it.

By the way, why is everyone so fond of leaving a place like HW for pe?

Why not stay at the bank and work your way up? Is it that much diff. in pay?

 

Is it me or I feel that Harris Williams is getting trolls on this forum? I'm sure its a decent shop but I keep hearing things like unreal placement and I'm sure I've seen the exact term "MDs go to bat for analysts for PE" at least 3-4 times.

e.g. i just googled "go to bat" and these came up

//www.wallstreetoasis.com/forums/sagent-and-harris-williams

//www.wallstreetoasis.com/forums/battle-of-the-mms

//www.wallstreetoasis.com/forums/is-it-a-sign

//www.wallstreetoasis.com/forums/undergrad-matter

and each one has that phrase

 
philliesphan:
Is it me or I feel that Harris Williams is getting trolls on this forum? I'm sure its a decent shop but I keep hearing things like unreal placement and I'm sure I've seen the exact term "MDs go to bat for analysts for PE" at least 3-4 times.

e.g. i just googled "go to bat" and these came up

//www.wallstreetoasis.com/forums/sagent-and-harris-williams

//www.wallstreetoasis.com/forums/battle-of-the-mms

//www.wallstreetoasis.com/forums/is-it-a-sign

//www.wallstreetoasis.com/forums/undergrad-matter

and each one has that phrase

People on here like to repeat what others say
 

For the most part it's true. It's a top MM PE firm and places well in MM PE. Why wouldn't the firm want their ex analysts to be alums at MM PE firms where they might source their deals???

I don't like the name cuz it sounds like hair, like hairy balls, but it's a good firm.

========================================= We are excited to formally extend to you an offer to join Bank of Ameria
 

At my bank (very similar to HW), our analysts have typically gone to firms that ranged from $150mm to $3bn under management (with a few exceptions to much larger marquee names). And yes it may be cliche, but the MDs at middle market banks really do "go to bat" for their analysts. I had senior bankers proactively call on my behalf to PE firms they knew I would be interested in, and they also always gave glowing references. Of course, it's in their interest as well to place you for relationships and deal flow...

Bottom line, quality MM shops place extremely well into PE (especially MM PE, probably even better than BB analysts).

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 
Best Response

As a former MM analyst currently in MM PE, I'll throw some thoughts in here:

Hours: MM PE blows banking away in terms of hours. I worked around the clock at the MM bank I worked at. So many all nighters, almost no time to myself on weekends, pretty much a perpetual state of exhaustion. In MM PE, it is the exact opposite. I work about 50-60 hours a week and I almost always have my weekends to myself.

Pay: Despite the vast difference in hours, I get my paid more in MM PE than I did in banking. On top of this, my pay is less correlated to the market as we still collect our 2% management fee regardless of what happens. My base is 6 figures so I'm never really going to have a "bad" year.

Work: Depending on the PE shop you go to, your work is a million times more exciting. I've made a couple posts now about the type of work I do on a day-to-day basis and I love it. I wouldn't go back to banking even if they offered me more $$$.

People: I've generally found that the people in PE tend to be more intelligent and down to earth than the people in IB. While I learned a lot from my IB mentors as an analyst, I'm very excited to have a hyper-intelligent senior team / mentors that actually take the time to explain things to me and help me to develop.

As for the comments above relating to Harris Williams and other MM banks: One of the reasons Harris Williams / Edgeview / McColl Partners / etc. have such good PE placement is that they are nearly 100% M&A shops. That means every analyst is executing M&A deals for their entire 2-3 years. MM PE shops care a LOT about M&A experience as they expect you to hit the ground already knowing the process. In addition, MM Analysts typically have much greater deal exposure and responsibilities in the deal process. This experience translates well to MM PE as Associates are given high-levels of responsibility and are expected to be able to operate with very little guidance / oversight from day 1. I was actually pretty shocked during my first month as a PE associate when no one wanted to review my work before I sent it off externally.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 
CompBanker:
As a former MM analyst currently in MM PE, I'll throw some thoughts in here:

Hours: MM PE blows banking away in terms of hours. I worked around the clock at the MM bank I worked at. So many all nighters, almost no time to myself on weekends, pretty much a perpetual state of exhaustion. In MM PE, it is the exact opposite. I work about 50-60 hours a week and I almost always have my weekends to myself.

Pay: Despite the vast difference in hours, I get my paid more in MM PE than I did in banking. On top of this, my pay is less correlated to the market as we still collect our 2% management fee regardless of what happens. My base is 6 figures so I'm never really going to have a "bad" year.

Work: Depending on the PE shop you go to, your work is a million times more exciting. I've made a couple posts now about the type of work I do on a day-to-day basis and I love it. I wouldn't go back to banking even if they offered me more $$$.

People: I've generally found that the people in PE tend to be more intelligent and down to earth than the people in IB. While I learned a lot from my IB mentors as an analyst, I'm very excited to have a hyper-intelligent senior team / mentors that actually take the time to explain things to me and help me to develop.

As for the comments above relating to Harris Williams and other MM banks: One of the reasons Harris Williams / Edgeview / McColl Partners / etc. have such good PE placement is that they are nearly 100% M&A shops. That means every analyst is executing M&A deals for their entire 2-3 years. MM PE shops care a LOT about M&A experience as they expect you to hit the ground already knowing the process. In addition, MM Analysts typically have much greater deal exposure and responsibilities in the deal process. This experience translates well to MM PE as Associates are given high-levels of responsibility and are expected to be able to operate with very little guidance / oversight from day 1. I was actually pretty shocked during my first month as a PE associate when no one wanted to review my work before I sent it off externally.

Your posts are always great to read, dude. Thanks.

 

Thanks Mezz & Well-paid Slave. I wouldn't worry too much with the likes of 1styearBanker. I've met a number of people during my career that were of the "BB or bust" mentality. Luckily, I don't cross paths with many while working at MM shops.

And the silver bananas were much appreciated as well.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 

philliespan -- top MM is a lot less defined just due to the many shops out there. If you're looking to add to your list, the likes of Lazard Middle Market, Robert W. Baird, Lincoln International, and Edgeview are all solid places to work as an analyst in the MM.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 

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