Post-MBA lull: filling the gap as I continue to search
Hello all,
So I did my MBA at a respected but non-target state school, and I just graduated near the top of my class. I took coursework relating to private equity, I did well in a PE case competition. But unfortunately, well, you all know how tough it is to break into PE, and I don't even mean KKR...
Emerging markets are my big love. I did work relating to EM before, I helped an eastern European energy firm in liaising with potential joint venture partners here in the US, basically sell side deal origination if you want to look at it that way. But I never did investment banking or worked for any investment bank or PE fund.
I need to figure out how to best fill my time in the interim as I try to break down the doors.
I could:
A. Continue working with my previous partner firm and help them find partners here in the US, which should work out a bit better now that I can do financial modeling, etc. I can do this part time while searching for work, although its "eat what you kill".
B. Just practice modeling, read the financial news, and cold call/cold email PE firms like a maniac all day long, do nothing else.
C. Accept an offer to do an internship at a macro oriented hedge fund.
D. Get a gig day trading at a prop firm.
Option A would let me build my skills in a practical setting, but only on commission. I could more closely tie myself into corporate development, even though I have no IB experience the firm is small enough and would be willing to let me take on a role in that area, albeit without salary for now.
Logic says B will give the greatest chance of hitting something job wise, but I'm worried that if I keep going like that for too long (say over 3 months), I'm going to run into the employment gap issue, which makes you look like a loser.
Option C may offer some modeling opportunities.
Option D won't offer me anything with modeling, but it will give me some income (I already have a few strategies I use) and a place to call 'finance' on my resume. It also gives me enough flexibility to meet people for networking.
Any suggestions you may have?
Thanks in advance!
P.S. And I know, I should have done top ten, I should have worked at Goldman, but I didn't get there so I have to work with what I've got. Can't turn back the clock :(
If your true love is emerging markets, then I would recommend you pursue that passion from a different angle than private equity. There are a host of corporate, consulting, and other finance positions that would allow you to explore emerging markets in interesting ways.
Even graduates from top five MBA programs will find securing positions at legitimate private equity funds almost impossible without pre-MBA private equity (not just banking) experience. The reality is that there is only so much capital out there for private equity investment, only so many deals to do and firms to do them, and only so many people needed at these firms. Private equity is lucrative because it is not especially labor intensive. Moreover, the post-MBA associate level is one of the least-needed positions since it's too junior to add value sourcing transactions, and you can get much more junior-level horsepower (in general) hiring a banking analyst. What few candidates at this level the good(ish) funds need they can easily fill many times over without going outside of the box.
Based on your background, I think attempting to hold out for a job at a private equity fund offers you a pretty de minimis chance of upside, and very significant downside given that you seem fairly accomplished and could probably get a pretty good job outside of private equity/high finance (the chances of which diminish significantly the longer you remain unemployed).
Thank you for your explanation. There are many answers you can get on this forum, but few are as thorough and polite as this one is, lol
Long-long run I'd like to set up my own PE firm and do emerging markets investments. I have a lot of interesting ideas, but I need a solid track record before raising capital. Being that I won't likely make it onto an M&A desk, I'm trying to find the best way of going about this. Its not just about getting a job for me, that's just a path toward the entrepreneurial side.
From what I hear, getting in from the deal origination side might be the best way to go for someone like myself, as opposed to being an excel monkey. I have a handful of connections that want liquidity or growth equity, so that might land me a foot in the door.
Any other advice is appreciated...
The only sort of private equity that leans on junior associates for deal origination are a few growth equity / VC funds (at LBO funds, the origination is generally handled exclusively by the partners/officers). Insight Venture Partners, TA Associates, and Accel are a few firms that fall into this category. These firms are also really picky about pedigree, however. I would almost say they are more picky, since they're usually hiring these associates to cold call potential targets, generally list their bios on the firm website, and like to be able to show that their cold-calling army is elite and well-heeled. Also, they tend to hire straight from tech or M&A banking into their pre-MBA associate pool and, again, look for pre-MBA VC experience in their post-MBA hires.
With respect to your long-term goals, particularly concerning fundraising, I would note that successful new entrants into private equity are somewhat few and far between, especially today. After being burned in the bubble, most LPs (limited partners, investors in PE funds) have retrenched and are focusing on funding either the very large megafunds, or smaller funds with long track-records and specialized expertise that succeed in a niche space. Unlike hedge funds, which can start small, establish a record, and slowly grow, private equity funds (that make investments for control) need to have significant capital and a prior record both to attract funding and investments (target companies will resist investment from unproven capital sources).
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