I was just accepted to the Wharton MBA program for Fall 2016. I currently work in investment management, I'm a CFA and I'm contemplating a career change. I've been having a real "crisis of faith" about my current industry - nothing I do seems tangible anymore. Long-term I love the idea of working for a small private equity fund that invests for the long-term in good businesses with strong management teams. I want to be an equity owner while being able to participate in high level decision making. I'm not a banker so I don't have ANY deal experience... likely my Achilles heal for private equity recruiting. I am however very good at thinking like a long-term business owner and very good at analyzing a business from the bottom up. I may be just a little biased, but I feel like this is probably a harder skill to learn.
I know the students/advisors in the Wharton program will help me figure all of this out, but I would love some idea of where I stand before I start in the Fall. Is investment management to private equity something people have heard of? Would consulting at MBB make more sense first? I honestly have zero idea how I would be viewed by private equity guys or by the consultants. Thoughts?
You can definitely do consulting. Everyone at a school like Wharton can do MBB if they recruit well and study cases, regardless of prior experience.
As for PE, that will depend on what you were doing in IM beforehand. You stand a much better chance if you were at a big HF doing fundamental analysis than if you were managing SMAs in munis. On the CFA, its not really a thing in PE (and I say that as a charter holder who worked in PE). Your best bet is to come up with a unique angle on why your IM experience is better than deal experience (probably that you know how to think like an investor instead of just process transactions). You will also need to prove your modeling chops (IM models are not the same), since you are coming from outside the typical channels. Also, you need to do your internship in PE or IB to get deal experience.
Also, just so you're clear: PE is a DEAL business. It's a lot less of sitting on boards and kibbutzing with CEOs than people outside the industry realize. I can't overemphasize how over-romaticized PE is in business school. You will get to sit on boards, but you will spend 60%+ of your time on transaction work, especially as a Sr associate or VP. If you're going to go down this path, just make sure your eyes are open and you know what you're getting in to.
Good luck. It's a tough climb but the key will be figuring out your unique value proposition to PE firms.
Thanks for the reply, you make some good points. To be more clear on my experience, I work for a $xx bn. value investment fund doing deep fundamental analysis, none of that SMA b.s. I'll dig for a few weeks on each potentially interesting company and recommend a buy price to our investment committees. Job is mostly reading but a fair amount of modeling with some management/sell-side meetings thrown in.
If you don't mind sharing, what did you do before and why do you have your charter? Also, I have heard before that no one really cares about the charter in PE... how about consulting? I imagine no one cares there either.
Back to your points. I'm not sure if this is a thing, but I would be more interested in a small PE fund that buys and holds for the long run, not a mega fund or a mid-market fund that focuses on a 3-5 year holding period then exit. There are quite a few European holding companies that operate this model. Also a model employed by Buffet.
My real interest lies in analyzing businesses, though I would like to focus more on implementation and less on sitting behind a desk doing research all day. When I type it out, this sounds more like consulting than PE. Though I can't be sure, as I haven't ever tried either. I also worry about the travel involved in consulting and the lower pay...
Sort of rambling here... but any more thoughts?
I did BB IB and then MM PE. I got the charter because I initially recruited for credit HFs out of banking (and got a couple offers) but got a a PE offer that fit better. And, I realized while there that PE is a better fit for me.
I don't know, man. Sounds like you're looking for an evergreen fund, but those are pretty atypical in the US. Probably a family office is more what you're looking for? That's more of an evergreen model. There are also consulting firms that focus on working with family offices, so that's another potential avenue.
For recruiting, I think you'll be ok if you can nab an internship to get PE. If your firm has name recognition and you can articulate why PE (and not HF anymore), I think you'll be ok.
I think of you're actually looking to get your hands dirty, that sounds like general management to me. I know at Wharton there are lots of opportunities in that vein so probably try an MLDP internship or something. Really, I'd say it depends on whether you want to be a service provider or not. Consultants get paid more, but you're always serving the client (thats the trade).
That makes sense, do you ever get any recognition for the difficulty of earning the charter? It's a bummer to think that all that time spent does not help career progression. Obviously you learn a ton, but the other half for me was always the career progression portion.
I've thought about MLDP but I don't think I could stomach making less than I do now after the high explicit and opportunity cost business school. Also, I worry that I would honestly just be bored pretty quickly working in the same industry... it doesn't sound intellectually challenging.
I really don't mind serving a client, so consulting is looking like the next best option to looking for some one off private equity opportunity that would fit what I'm looking for.
Wharton MBA here. Sup.
I hear ya, and it makes sense. Like what everyone else says, 100% possible to do consulting. However, funny enough, I'm leaving management consulting from a similar crisis of faith that I wasn't actually learning anything about the industry hahaha. So is the grass always greener...?
As for PE, I found this unique thing at Wharton where they have these "search funds" where PE firms basically give you money to go out and "find" companies that can become PE targets. After you identified the right company, you work with that PE firm and others to gather the money to "buy" them out and then run the company like a CEO.
Think of it like Y Combinator for mid sized businesses. There's a few firms that supposedly do this, and it gets you owning and running a business in the industry / function of your choice. Highly fascinating, and something I'll be looking into myself. I don't think you really get "fuck you" rich out of it, but they threw out some of the $$$ for even just the search process, and it made my eyes widen a bit hahaha.
As for pure PE, ya it's mostly modeling for deals that can take 8-ish months to close and have a solid chance of blowing up hahah. You're romanticizing it a bit. Perhaps corporate finance has more of that tangible impact you're looking for.
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