M5 MBA IB Associate exit opportunities to PE
Hello Everyone,
For someone with no pre-MBA IBD experience, I will soon attend one of the M5 MBA's and I am pretty sure to land a job as an IBD associate.
The biggest issue I have is that my dream is to work in PE but of course it's an uphill battle trying to break in post-MBA and after experience in IB as an associate. Of course the 2 year IB analyst -> exit to PE option is not available for me.
My understanding of why PE funds don't take Post-MBA IB associates is that they demand a higher pay while their technical skills are the same or worse than most analysts'.
Is this statement accurate?
In that case do you think that a PE fund that hires analysts with 2 years of IB experience would also hire an associate with 1-2 years of experience if he decided to take a paycut?
Isn't an IBD associate almost the same as a 2 year IBD analyst the same to a PE just as long they pay them the same?
I'm also considering not doing the MBA and getting a Master's to get into IB as an analyst and then PE after two years BUT, If I can take the aforementioned path (MBA -> IB Associate -> PE) by taking a pay cut I would rather do that given that, IF I manage to land a PE job post-MBA, it is customary to get an MBA to move up in PE.
Thanks guys
No. Remember, PE firms can afford to be picky, and its important that as a post-MBA that your technical skills are BETTER than the pre-MBA associates since you'll be checking their work.
What you'd really be looking for is an associate role rather than a senior associate or VP role. That can be done, but its still an uphill climb since they'll need to figure out what to do with you in 2-3 years and can't just send you to b-school.
You're best bet is to figure out what funds will promote from associate to senior associate/VP and target those as an associate hire. I'd start in the lower MM. Good luck.
they dont want post-MBA with no prior experience because your technical skills will be far WORSE than an analyst. think about it - analysts do all the modeling and associates are there to check the work. when you get to PE, the learning curve is so steep and the modeling is so much more tougher, you'll need that analyst experience. what good is a person that "knows" how to check excel?
ledger123, Are you currently working in PE or IB? I have been told that post-MBA IB associates spend the first few months learning to model and it makes sense since you must know how to do it in order to check it.
Someone from Wharton told me a few people in his class made the exact switch I am speaking of by going from Post-MBA IBD to PE but they all switched within 12 months and had their mind set on PE from the very start.
They essentially picked up the skills that analysts have.
worked as an analyst in IB and now currently VP in PE. Our firm along with many other upper MM PE funds never hire associates from IB. strictly analysts because they are the ones with the modeling "skills". Not saying it's impossible. But to go from IB associate to PE - you'd have a much better chance at going to smaller shops where there is less structure.
Agree with ledger. The recruiting process at megafunds and upper MM funds is very structured--IB analysts / MBB analysts (more rarely) hired for pre-MBA associate role, post MBAs with PE experience (at same fund or other) hired for senior associate / VP role.
At smaller firms, the process is often more ad-hoc, and thus there are more opportunities for a IBD associate to break in. I would think networking / making contacts at some smaller firms would be key for tihs
Thanks Ledger, great answer and good to know from someone already in PE. On that note, say one performs very well at a smaller PE shop and builds a good track record. What are the chances for being hired by the top funds for more senior roles? I would guess it depends on how extraordinary the track record is or does working at a smaller shop pigeon-hole you somehow?
You have to understand how the funnel works. PE firms take in a lot of associates, then (much) fewer senior associates / VPs at the MBA level and for them, it's a struggle to stay / make it to the top (most people will be pushed out before they make it to partner / MD). Unless they are growing or have a very specific need, PE firms rarely hire beyond the MBA level. Unless you build some sort of industry / product expertise that large funds don't have and would want, I think the chances of moving from a small fund to a MF or large MM for a senior role are slim to none.
Also, why would they take a ~29 year old (post-MBA associate after ~2 years) when they can take a younger analyst (23 or 24) who may stay long term.
This makes no sense. Someone who is post MBA and wants to stay in PE would be more likely to stick around than a pre MBA analyst who at many places would be expected to leave for an MBA or other work after a couple of years anyway.
OP, don't get too caught up in the traditional 2+2 path people talk about on WSO like it's the only route to PE. Yes, it's definitely by far the most common path and is the path of least resistance, and so what you're trying to do will not be easy (for example, you won't have headhunters reaching out to you like you would if you were an analyst at a top group) but IB associates do make the move to PE and it's certainly something you could pull off with some effort and luck.
Also, what the hell is an M5 MBA? Is that a thing now?
Thanks notthehospitalER,
Was just referring to Booth and Columbia (Maybe Stern) with M5 which for me are next in line after HSW in terms of prestige in the Street.
I take it you are also trying to break into PE from a non 2+2 path?
I'll keep you guys posted on my journey to Buy-side greatness.
OP made up the term "M5" lol confirmed
M5 is a car OP
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