Suppose you secured a full time 'exit opp' (a stint at a PE megafund, HF, strategy team at a F500 firm etc) before entering full-time banking/consulting.
What are your thoughts on starting employment directly with such opportunities vs taking the 'standard' path of 2 years at a bank/in consulting and then moving over into industry/PE/HF? Does it make a difference long term?
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If you don't want to do banking for 2 years and have the 'exit opp,' what's the point of banking?
That being said, there are exit ops you won't be able to get without 2 years in banking.
I was just curious as a few of my friends managed to leverage their internships and landed offers in places that are considered 'exit opps' (some that are typically are only open to people with 2+ yard banking/consulting experience).
Won't you miss out on the BB training, the network gained in those 2 years, a 'foundation' of best working practices etc?
One key question would be, are the offers your friends got really FO positions, not in name only, but in reality as well? Many small places won't have the time and the resources to train you, and you come in and do what your existing skills can do. In these cases, you would end up spending your time on mostly MO or even BO types of tasks, regardless your title or official position.
Yup very legit (mostly big/well known) firms and FO positions (several of them have started and are doing what other analysts do who joined after 2 years of banking/consulting).
[That said, my friends have very relevant internship experience and a direct network, which may have helped their application.]
Why not then? Especially if that is what you want to do.
They might get in trouble and have to go back and start all over again in banking. The exit opp of the exit opp won't be happy. There are no short cuts in life.
EDIT: Since I got a PM about it, I want to clarify - this post was a joke and not meant to be taken seriously. I was (apparently unsuccessfully) poking fun at the fact that everyone on this board is so hung up on IB -> Pre-MBA PE -> MBA -> PE or HF as the only path to a successful career in finance or otherwise.
More and more buy side firms are hiring straight of undergrad, if you get to start at one of these firms and it's a good fit, go for it. But you have to be circumspect about it, if a strong MM PE firm offers you an analyst role take it, but if the choice is between a 150 MM no-name growth shop vs GS, take GS.
My own prediction of the trend is that many PE shops will gradually adopt the model similar to in-house counsel / outside law firm, by outsourcing the heavy lifting to the banks in the deal making process. With this model, they probably can live with at least a portion of their junior staff without the 2-year banking training.
Well, if you get into megafund PE, then go ahead and take it. After your PE stint, you will still be sought after by HFs and Corporates. Starting out at a HF or in Corp Strategy is different, as you are unlikely to make the jump from one "exit-opp to another".
I think many PE shops will gradually outsource heavy lifting M&A to the banks, and keep only the investment screening, portfolio company monitoring, and due diligence functions in house. With this bisiness model, there is no reason why they can not hire analysts without banking experience.
No.
Oh yes. If you analyze the workload at PE shop, investment screening, portfolio company monitoring, and due diligence take up most of junior staff's time. It makes economic sense to keep these three functions in house while outsourcing heavy lifting M&A to banks. Corporations have been doing this with their legal staff - the in-house counsel / outside law firm model, with the in-house counsel handling the day-to-day legal issues and the outside law firm doing heavy lifting when needed.
With this model, PE shops can certainly live with analysts recruited directly out of college without IB experience, as long as they can be trained to do investment screening, portfolio company monitoring, and due diligence.
I think starting in any of these exit opps is great if: (a) You are sure that this is the industry you really want to work in. Having at least an 8 week internship with that exact firm is highly recommended. I've seen people go straight into PE or corp.dev. and it turned out to be different than what they expected. (b) The firm has a track record of hiring graduates and is committed to your development. If you're the first one and in 1-2 years they decide this didn't go the way they expected you could find yourself without systematic training and potentially in a niche market. If you then try to lateral to another firm the lack of formal training could hurt you.
IBD gives you a foundation which can be valuable but if you're sure about A+B then I don't see much value in it.
PE's deal flow typically is much slower than IBD. Undergraduate -> PE would not give you the same kind of exposure and experience in deal / valuation / modelling as in IBD. This deficiency in experience and skillset may make the future career somewhat limited in certain areas. On the other hand, you might pick up a lot of experience and exposure in due diligence if you take that route. If that's your preferred skillset, you certainly can choose to go directly from undergraduate to PE.
Thanks for all the thoughts!
Your question is irrelevant. If you can not substantiate your claim, just say so.
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