Middle Market IB Exit Ops: Is WSO wrong?

Is the WSO consensus that you have to be in a bulge bracket / prestigious analyst program to exit to a good private equity shop correct? After going through the FT recruiting process as a senior, and talking to a number of small MM banking groups, it seems that great exit ops into PE are available at pretty much any of these firms - Oppenheimer, Lincoln, Edgeview, etc. Not just the "better" ones like William Blair, HLHZ, and Harris Williams. For example, even Raymond James' Boston office had analysts go to Summit Partners and Flexpoint Ford this summer. Has anyone even heard of this group? The caveat of course is that you probably have to be a top performing analyst at these MMs, but it seems like you'd have to perform to the same standard at a top bank anyways.

 

They may not be mega funds, but they're still very respectable pe shops. The vast majority of other hires are from bbs.

My point is just that you don't necessarily need to go to a bb to get to a solid pe shop. Most people on here will say that if you got to a random mm investment bank, it's extremely tough to get into pe, based on non existent brand. But this doesn't seem to be the case in reality. Top performing analysts at mm ib groups still have plenty of opportunities.

 

no one mentioned megafunds bro. i'm talking shops with 0 cold calling and over 1-2bn per fund.

also ur proven a liar. there's no one from raymond james on summit's website.

solid pe shop is arguable. what the hell is flexpoint ford. that's not a solid pe shop.

but i agree anyone can go to anywhere from any place. i know a kid at kkr who is a managing director and never even did ibanking. he was ceo or something,

anyways. stop being insecure and go get what u want. this thread is worthless.

 
Illinoisprogrammerisajoke:
no one mentioned megafunds bro. i'm talking shops with 0 cold calling and over 1-2bn per fund.

also ur proven a liar. there's no one from raymond james on summit's website.

solid pe shop is arguable. what the hell is flexpoint ford. that's not a solid pe shop.

but i agree anyone can go to anywhere from any place. i know a kid at kkr who is a managing director and never even did ibanking. he was ceo or something,

anyways. stop being insecure and go get what u want. this thread is worthless.

Ignore this kid. Although the part about going after what you want is true. The aum of a PE fund does not indicate whether they are "solid" or not. I work at a boutique (and no not a prestigious one, a completely no name one) but my experience has been great and I love it. As I'm networking with headhunters and alumni for a possible switch to pe in a year or two, I have found them both to be very receptive to my experience because I was given so much responsibility and I really understand the deal process as opposed to the much more limited experience you get at larger banks. The megafunds will be out of the question but who cares. As for the banks that you mentioned specifically, I know of several mm PE funds who have those firms at the top of their list and shy away from interviewing bb kids because the skillset they possess is different. Either way, the key is of course to do well in interviews and network your ass off to get said interviews.

 
Illinoisprogrammerisajoke:
no one mentioned megafunds bro. i'm talking shops with 0 cold calling and over 1-2bn per fund.

also ur proven a liar. there's no one from raymond james on summit's website.

solid pe shop is arguable. what the hell is flexpoint ford. that's not a solid pe shop.

but i agree anyone can go to anywhere from any place. i know a kid at kkr who is a managing director and never even did ibanking. he was ceo or something,

anyways. stop being insecure and go get what u want. this thread is worthless.

Cool it bro. Just to play devil's advocate, the associate the OP is referencing was:

http://www.summitpartners.com/team/Steven-Twomey.aspx

You didn't do a particularly thorough search I see. I'm not in IB and I couldn't care less about the arguments presented but there's no reason to go loco on some poor kid.

N.B. A really quick google search of Flexpoint Ford says it's a 1B AUM firm. I've never heard of it but obviously someone has.

‎"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."
 

ROFL ARE YOU SERIOUS

Prior to Summit, Steve worked for Raymond James & Associates and Goldman, Sachs & Co. He holds a BS in management, magna cum laude, from Boston College.

You sure proved me wrong. Sure if you do a stint at goldman ibanking i'm sure u can work at any firm and get an interview at cold call centers at summit. definitely not what the OP is looking for.

also ur reading comprehension is PISS POOR. I said 1bn minimum PER FUND not TOTAL ASSETS UNDER MANAGEMENT.

oh look at that 225mm fund, it sucks bro.

http://www.flexpointford.com/news_06_10_2005.html

 

ROFL ARE YOU SERIOUS

Prior to Summit, Steve worked for Raymond James & Associates and Goldman, Sachs & Co. He holds a BS in management, magna cum laude, from Boston College.

You sure proved me wrong. Sure if you do a stint at goldman ibanking i'm sure u can work at any firm and get an interview at cold call centers at summit. definitely not what the OP is looking for.

also ur reading comprehension is PISS POOR. I said 1bn minimum PER FUND not TOTAL ASSETS UNDER MANAGEMENT.

oh look at that 225mm fund, it sucks bro.

http://www.flexpointford.com/news_06_10_2005.html

 
Illinoisprogrammerisajoke:
ROFL ARE YOU SERIOUS

Prior to Summit, Steve worked for Raymond James & Associates and Goldman, Sachs & Co. He holds a BS in management, magna cum laude, from Boston College.

You sure proved me wrong. Sure if you do a stint at goldman ibanking i'm sure u can work at any firm and get an interview at cold call centers at summit. definitely not what the OP is looking for.

also ur reading comprehension is PISS POOR. I said 1bn minimum PER FUND not TOTAL ASSETS UNDER MANAGEMENT.

oh look at that 225mm fund, it sucks bro.

http://www.flexpointford.com/news_06_10_2005.html

An article from 2005? Relax Chach. Fund III was $950mm.

 

This Steven guy has no idea that there is a thread on him...lol

second, OP you're right. plenty of exit ops to PE. maybe not KKR TPG Carlyle Bain etc. from a MM without having a strong contact, BUT if you do well you can prob be placed well

dont listen to Illinoisprogrammerisajoke...talk to someone you know in the industry if this info is pertitent to you taking a FT offer or smthing

dont trust WSO...or me for that matter lol talk to people you actually know!!

 

i said u can go anywhere from anywhere. i'm at a boutique too, i'm just saying the op is insecure and classic case of a fellow coworker. i wouldn't be surprised if he was my coworker.

just work hard and show your results through actions, not through posting shit on WSO and looking for reassurance.

 
Best Response

This thread definitely devolved into something absolutely meaningless. For someone who works at a MM, I hope I can shed some actual light on this. I'm an analyst at a top MM, and with regards to exit opps, this is what I've seen (with an analyst class ranging around 60-65):

Top PE/HF (Blackstone, Point 72, etc.): 2-4 Very Solid/Well Respected PE/HF (Audax, Magnetar): 6-8 Decent/Average PE: 10-20 Corp Dev at Mostly Mid-Cap/Some Large Cap: 15-20 Stay in Banking (at least for 3rd year analyst/associate level): 15

This is just a rough breakdown, obviously varies year to year. This is based on my experience from what I've seen one year, and from analysts/associates I've spoken to a year before I arrived, so all very recent data. Forewarned, this is a top MM that is increasingly doing BB level deals and has absolutely been crushing it the past 2 years. Now for a middle-of-the-line BB (BAML, Citi), you're doing to have a greater number going to to the top two categories, and less in the bottom three on a percentage basis. That's it. Ultimately, exit opps are what you make of them, and yes, if you are at a MM, you have to be more proactive and definitely distinguish yourself from the BB kids if you want to get the better opps. Realistically, whether you are at a BB or a MM the top PE/HF will always be a reach. It will be easier for the BB kid (unless maybe UBS/Deutsche), but a strong analyst at a MM who can distinguish himself should be able to make it. At the very least, I see no reason why you cannot make it to a very solid/well respected PE/HF from a strong MM if you take initiative and work for it. Hopefully you guys can take something away from this.

 

Very well put.

Also, people need to start realizing PE is a lot different than IB as far as "prestige" goes. Yes, the MFs will always be MFs as far as name recognition. But many are struggling with their large buyout funds and moving down market. There are plenty of middle market, lower middle market, distressed, etc etc PE funds that kill it on a returns basis - and that's all LPs care about, and theoretically what you should care about since you will ultimately be comped based on performance (assuming you make it far enough to get carry). It's also far easier to move up at a non-MF (and by far easier I really mean still really really hard). There are also significant lifestyle considerations (hours, having to get an MBA, location, etc) to why you wouldn't choose MF.

 
jobless123:
Very well put.

Also, people need to start realizing PE is a lot different than IB as far as "prestige" goes. Yes, the MFs will always be MFs as far as name recognition. But many are struggling with their large buyout funds and moving down market. There are plenty of middle market, lower middle market, distressed, etc etc PE funds that kill it on a returns basis - and that's all LPs care about, and theoretically what you should care about since you will ultimately be comped based on performance (assuming you make it far enough to get carry). It's also far easier to move up at a non-MF (and by far easier I really mean still really really hard). There are also significant lifestyle considerations (hours, having to get an MBA, location, etc) to why you wouldn't choose MF.

While true, some of the same problems plaguing MFs are creeping into the MM. Too much demand and too little supply.

 

you would have a tough time getting into the very big Megafunds, but you'd have a solid shot (depending at the MM fund) at very strong MM PE shops and for HFs, there are no set paths really its not easy no matter where you are coming from (at least from what i've been told)

I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought- GG
 

for top MM firms like Harris Williams, William Blair, Baird, Houlihan Lokey etc. they place very well into MM PE because they deal with the PE groups all the time and want you to be a future client

megafunds is a totally different story and you probably will be fighting an uphill battle

 

You do have a chance, but you probably need to have superior interview skills..odds are slightly stacked against you but by no means is it impossible.

I am no wonder boy...3.6, one of the top liberal arts schools, did 2 yrs at a MM iBank (not even close to bulge here in states and I got a PE job. (not at a mega fund) I would say I have above average interview skills and I got in good with a few recruiters. It definitely was not easy, however.

 

HLHZ places pretty well from their top groups. The guy from Bear was a special situation that I don't care to elaborate on.

You'll get interviews at some top shops from a really good MM (Bear for example) if you play the recruiters right; but its an uphill battle.

 

I met someone last summer who worked for Michael Dell's investment vehicle, he had previously worked for a Swedish Billionaire (can't recall his name) and started off his career as an analyst with Blackstone. Once you're in those circles, it happens through referrals, depending on how good you are of course.

Soros's PE shop is called Towerbrook Investment Partners I think.

 
Seanc:
I met someone last summer who worked for Michael Dell's investment vehicle, he had previously worked for a Swedish Billionaire (can't recall his name) and started off his career as an analyst with Blackstone. Once you're in those circles, it happens through referrals, depending on how good you are of course.

Soros's PE shop is called Towerbrook Investment Partners I think.

Soros's shop split to Towerbrook 2 years ago, and some people left.

 

I wouldn't call DB or Bear true Middle Market.

I know guys from Bear going to KKR, Soros, BainCap, and TH Lee. DB kids can place the same.

Places like Jeffries, etc.. have significant trouble getting into the Big PE shops.

 

This is good news, but still an uphill battle, I'd settle for any well-regarded PE though i.e. Madison Dearborn, Warburg Pincus, so let's see how it works out.

 

I know Harris Williams makes a regular practice of sending their analysts out to private equity, as do many firms--it makes strategic sense for them to do so. Granted, you're not going to be going out to big shops like KKR, but the people I know that worked there are now at very nice shops. In fact, now that I think about it, most of the people I know from undergrad who worked with MM firms are now with PEs, with the odd one or two in corporate development.

Once more into the breach, dear friends.
 
Indeed:
Granted, you're not going to be going out to big shops like KKR, but the people I know that worked there are now at very nice shops.

What kind of shops?

 

The guy from Bear going to Soros' place is from TMT, which is one of their better groups from what I hear. Funny cause he interviewed me and said he's going to the Soros place, unless there are multiple guys going there from Bear.

 

A friend of mine summered at a Southeastern regional boutique last summer and got FT with Moelis. I don't think that's typical but it's definitely a possibility if you have a good experience and network a ton. As for exits after 2 yrs working FT i dunno...I think most often is B-school or lateraling to work with one of the regional's clients you've worked with. Local regional MM PE shops may also be an option.

 

You just listed most of the traditional exit opportunities, with the exception of business school and maybe joining a start-up (though that seems less "traditional").

It seems like you are just shooting in the dark for people's suggestions on what to do, but it's probably more prudent to search on your own, develop some more specific questions and then come back and post them.

If I was you, I would just do searches for the different types of exit opps on Indeed.com or something of that nature. That should give you a good idea of what they will expect experience wise and what your responsibilities will be and possibly give you a better idea of whether or not you would be interested in pursuing an opportunity in that field.

Also, if you are enjoying where you are at, there might be associate promote opportunities. Outside of that, private equity (MM) will likely be your best match.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 

Depends on the shop. Harris Williams for example focuses on sell-side M&A. They place a few into MM PE shops which they have relationships with.

A lateral move would obviously benefit you in a number of ways (not sure how this would be "frowned" on) -

As far as grad school goes, it depends on the school. Chances are probably good at say W or Chi. HBS for example doesn't have a single piper analyst (from either class)....but one or two from goldsmith agio, Harris Williams, etc...yet Stanford has admitted folks from RBC in the past. It depends. My understanding is that it's becoming intensely competitive for folks in the white bread IB/PE set of applicants..and I doubt having a weak bank helps that.

 

Experience trumps all, both with a buyout shop and an MBA program. Bulge bracket experience helps to the extent that you're doing real deals, and complex ones. If you're doing cookie cutter sellsides for a middle-market shop or simple stock-for-stock tech deals, then it's a hard sell.

On the other hand, having real experience doing midsize 13E-3s trumps being the monkey running 10-year historical multiples off Thompson for SunGard, hands down.

I've sat on the adcom for a top b-school and still help as a NY interviewer and advisor. We look for "wow" factors. The wow factor for working at Morgan Stanley versus a small bank is limited and doesn't get you much. Tell us what you did, and we'll be a lot more impressed. I hate to say it, but there are a lot of analysts and associate consultants out there. What makes you different?

Tell that story and you'll be a lot better off than trying to leverage your firm's brand. A lateral move tends to hurt rather than help - "why did this guy jump ship?" That question looms a lot larger than brand.

 
GhengisKhan:
Experience trumps all, both with a buyout shop and an MBA program. Bulge bracket experience helps to the extent that you're doing real deals, and complex ones. If you're doing cookie cutter sellsides for a middle-market shop or simple stock-for-stock tech deals, then it's a hard sell.

On the other hand, having real experience doing midsize 13E-3s trumps being the monkey running 10-year historical multiples off Thompson for SunGard, hands down.

I've sat on the adcom for a top b-school and still help as a NY interviewer and advisor. We look for "wow" factors. The wow factor for working at Morgan Stanley versus a small bank is limited and doesn't get you much. Tell us what you did, and we'll be a lot more impressed. I hate to say it, but there are a lot of analysts and associate consultants out there. What makes you different?

Tell that story and you'll be a lot better off than trying to leverage your firm's brand. A lateral move tends to hurt rather than help - "why did this guy jump ship?" That question looms a lot larger than brand.

Great advise. Thanks.

 

I have found that as an analyst at a BB I was doing more cookie cutter client presentations than working on live transactions. I got more experience in the middle market where almost everything that I did was for a live engagement.

Manny07, if you are truly interested in middle market private equity going to a BB, in my opinion, does not help at all. Middle market banks will often help in placement and the good ones (Houlihan, Harris Williams, Edgeview, Piper) put everyone, not just a few, in private equity.

 
inhd:
I have found that as an analyst at a BB I was doing more cookie cutter client presentations than working on live transactions. I got more experience in the middle market where almost everything that I did was for a live engagement.

Manny07, if you are truly interested in middle market private equity going to a BB, in my opinion, does not help at all. Middle market banks will often help in placement and the good ones (Houlihan, Harris Williams, Edgeview, Piper) put everyone, not just a few, in private equity.

No, the MM firms do not place "everybody" in PE. Differences between HW and say Piper is HUGE. Most banks HATE losing their top guys to PE, what makes the MM any different?

Lets be honest here, IT DEPENDS.

 
inhd:
I have found that as an analyst at a BB I was doing more cookie cutter client presentations than working on live transactions. I got more experience in the middle market where almost everything that I did was for a live engagement. Manny07, if you are truly interested in middle market private equity going to a BB, in my opinion, does not help at all. Middle market banks will often help in placement and the good ones (Houlihan, Harris Williams, Edgeview, Piper) put everyone, not just a few, in private equity.

This is actually the truth. I know that Edgeview placed has placed every analyst that's wanted it into PE for the past few years. They pride themselves on this.

- 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
 
DoubleTrouble:
No, it will depend on your overall resume. That sounds like not such a bad place in reality. Is it JMP Securities by chance? I have heard they do such deals and little M&A.

It's not. its identical JMP. Their IB side is smaller but had done $30+ billion deals (mostly equity just like JMP) over 10 years period compare to JMP's $50 billion. But this MM IB has principle investment and assessment management arms which makes the firm identical by size.

ECM is small in terms of ppl employed. So I will be able to touch all the equity deals for sure, i guess a good overall resume means decent deal exp right?

 

Sounds like recruiting with HL; their Corp. Fin is IBD, Restructuring is... Restructuring, and FAS is Accounting type Fairness of Opinion etc. I would say that you either want Corp. Fin or Restructuring.

However, Restructuring might and I'm using the word might as in this is mostly 'hearsay' 'pigeonhole' you into distress or turnaround exit opportunities, again just word I heard, but cannot confirm of course. I think Restructuring is an interesting place to be anyway and I like the segment.

It's been communicated first hand to me from a variety of sources that this B/S on WSO about prestige and laterals and mega-fund crap is overblown and stupid. Once you're at a firm and you are performing well as long as you aren't jumping ship early i.e. moving before 1.5-2 years it is an 'fairly easy' move to a BB position if you're really gunning for it. Of course be prepared to start over as an analyst, but at you get a shot to work at a megafund I guess vs. only MM PE, but pay at junior levels prior to MBA seems like a wash to me (pick some here, lose some there...). Anyway, long story short if you're at a reputable MM firm the chances are high and its not really an issue of non-target, target, etc.

'Before you enter... be willing to pay the price'
 

Thanks for the reply BedBep12. Great guess - HL is the the bank. It is considered "reputable"?

After you broke down each area, I feel that Corporate Finance is where I want to be.

So I would have to start as a first year Analyst again if I were to try to break into a BB IBD? That sucks. I guess my best bet would be to get into an elite MBA program and get in through campus recruitment. Do the MBA business schools">M7 MBA schools even consider candidates from MM IBs? I know they have so many applicants coming from the BB firms.

 

Yes, MBA business schools">M7 programs consider candidates from MM IBs. I know people at Booth and Kellogg from small MM firms that have never even been discussed on this forum.

You should know that their restructuring group is one of the most highly regarded (especially on the creditor side). However, if corp fin is really a better fit, be sure to get into one of their top groups. A few of them are middle-market leaders.

 
BigKayDaddy:
Yes, I know their Restructuring group is very highly regarded. However, like BepBep12 alluded to; I may end up pigeon holded in a particular area of finance. Where can I find resources that will show me what their top groups in Corporate Finance are?
Off the top of my head, Industrials and Consumer, Food & Retail are high quality. I'm sure others here know more.
 

One of the guys I work for went to a top-7 MBA after working at HLHZ restructuring. Houlihan is definitely one of the better-known and better-regarded MM banks, at least for their top groups. One thing to be cautious of is their valuation group, which does more financial reporting/fairness opinion work and is not as well regarded (though still decent and better than a "non-bank" valuation firm like Big 4 IMO).

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

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'Before you enter... be willing to pay the price'
 

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