Internship Choices (PE vs IB)

I am currently a sophomore at a target school and have the option of spending this upcoming summer interning at a MM PE fund (around $5 billion AUM) vs interning at a small no name boutique IB. I am looking to lock in a SA position at a BB IB this upcoming fall but eventually planning on pivoting out to PE. Which internship would set me up better for IB recruiting next fall?

 

I think you're looking at this the wrong way. Namely, you're trying to figure out how best to follow "the path" when having an undergraduate PE internship may very well allow you to move directly to PE. It's also a sophomore internship so if you tell your story well (You want to experience working in an advisory role and being a value add for clients) it shouldn't be that hard to move to an IB internship junior year.....assuming that you can't get another PE role.

 

Do you have any idea of the kind of work you'll be doing at either? I'd suggest taking the position that'll allow you to get the most hands on experience, whether that's supporting the deal team on the sell-side or looking at potential acquisitions on the buy-side. If you can come out of the internship with a deal or two on your resume, you'll be way ahead of kids that have BS internships.

There are worst case scenarios, of course. Doing the IB internship might mean you're stuck creating buyer lists. In the PE internship, you might get stuck on the sourcing side. Reach out and ask a few good questions, and take the internship that will give you the best experience to talk about

 

I agree with theSimpleBaller in that you definitely should dig a little deeper to see what exactly you would be doing. A $5bn fund is going to be in no way similar to a no-name investment bank. In terms of deal flow, the fund should have a decent amount going throughout the summer whereas the bank could have nothing all summer (depending on how small it actually is).

Given your interest in PE, I would lean towards the fund. Last summer I did PE and had no problem at all going through interviews. It also gave me an idea of what I was interested in. My fund was unique in that we did tiny private companies ($5-30mm EBITDA) and also mega cap stuff ($bns in EV). Through that I realized that I enjoyed the bigger stuff much more, and gave me a lot of real stuff to talk about in interviews.

 

as someone who's looked at lots of resumes it's a wash with the bigger name winning. A well-known bank will trump a $200 million PE firm, but if you worked at a recognizable PE firm that'll trump a boutique bank

 

What is the fund and what is the bank?

As discussed, it all depends on the breadth and reputation of these two firms. Although an upper echelon PE firm will almost always trump an investment bank of the same tier, there are tons of absolutely shitty PE funds out there that offer unpaid internships. After all, three dudes in polos running an operation out of their garage could technically be a PE fund... Unless you are at a top 200 PE fund, I would probably lean towards the investment bank. But then again, it all depends on the scope of the bank.

 

It depends on the relative reputations of each firm. Think of it this way, if the MM/Boutique is Houlihan for example, you will likely have exit ops into better PE firms than the one you are considering. If the boutique is a no-name blank check IPO or PIPE shop, your exit opportunities will be very weak. Its important to look at the resumes of the partners at each firm. Are they ex-bankers, consultants or industry heavyweights? Or are they mediocre accountants, brokers or lawyers trying to play financier? Join the highest quality crew.

 

Two of the Managing Directors at this private equity firm worked in Arthur Andersen’s Capital Markets Group. One of those two was one of seven Worldwide Directors of Arthur Andersen’s Industry Groups and a member of the Advisory Board of the Carlyle Group.

I am not sure of which bank because recruiting does not start yet. However, which internship would be better if the bank is Houlihan? What if the bank is worse than Houlihan?

 

I don't want to leave I just don't think I could get an internship at a firm I'm interested in. And the main issue compounding all this is that banking recruiting is so early and I'd have to sacrifice that and roll the dice to try to get a PE internship, risking not having one for the summer. So I figure I could do a bulge bracket banking internship and then recruit full time for PE next year. Does that make sense?

 

I don't want to leave I just don't think I could get an internship at a firm I'm interested in

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1) it doesn't really matter unless you get an offer from both (I know this is a somewhat commonly used and obnoxious response, but it is true. Unless there is a trade off now, i.e. you can only pursue one or the other or you have an offer at both and need to choose, it doesn't matter. Just recruit for both and see what happens.) 2) it is hard to say without knowing which PE firm. Some take FT and some take interns, but don't get them to FT. If given an offer, you should be able to ask your connections about conversion rates.

 

Its more impressive to have an internship in the field you are applying to full time. If you want to go into Banking eventually, go for the Banking. If you want to get a job in PE, or at least try to get a job in PE, straight out of Ugrad, go for PE. Thats my thought. I think you may get more exposure at a boutique PE firm than a boutique IB.

NEVER lose your BlackBerry www.conveniencesoftware.com

 

You will encounter questoins like why didn't you have banking internships instead of buy-side. So you better provide a good reason why you want to do banking now instead of PE.

Mind if I ask how you got into the big PE?

 

I don't want to feign being an expert on this topic, as I am still a college student. But I have experience working at a private equity firm and have been interested in the space, so hopefully I can be of assistance.

Anyways, I think that whichever one you feel you are more likely to get modeling experience at, is probably going to be the best bet. And from my experience interning at a private equity firm in the middle market, training has been minimal. The only stuff I have learned here has been because one of the associates has been nice enough to put in some time to teach me things that will be relevant as I enter the banking world.

There's a reason they expect you to work in banking first (in most cases) because they typically do not have the resources to train you. With some exceptions. For instance, Graham Partners, a Philly private equity firm, has a really good program to train their interns with and I know from talking to several people that they really put in the effort to help you develop. I am sure there are other firms out there with similar programs, but not many. IB's on the other hand, if larger, are typically more accustomed to training analysts. So if you can find an IB shop with a good reputation and the resources to train you, I would choose that over a small private equity firm. Obviously if the name of the fund is supreme, then you would go with PE.

I am a blogging intern at Wall Street Oasis. Feel free to follow me to see my weekly posts.
 

Wait.. TPG? that's crazy good. congrats. I mean it'll definitely look good on your resume, that's for sure. When do you have to accept the offer? Can't you just max out your resources, try to get an offer then weigh your choices? In any case, even if you don't get an IB offer (hopefully this isn't the case), TPG would be an amazing opportunity for you, I would imagine. Just my two cents. I'm not in PE/am still in college but if you can get someone with industry experience to give you some advice that would be great.

 

Dude, you have an offer from TPG. Don't turn that down. Instead, summer at TPG, recruit for banking next summer (at which point you will get EVERY interview you want), end up at a top group, and find yourself crushing buyside recruiting. You'll have a megafund + a top group on your resume and trust me, you'll have a ton of options.

As for coming off as not being sure enough, you have an even better story than most guys going for an internship in banking. Now instead of being like everyone else telling the story of wanting to "leave options open", you can definitively say you want to pursue banking for x and y reasons that deterred you from pursuing PE for your junior summer.

Just trust me on this. I know lots of people that had sophomore summers in banking (at BAML and GS in particular) but only a couple of outliers that had internships at a megafund. Even of my buddies that summered at random PE funds, they did really well during summer recruiting in junior year and got a ton of offers after their banking stint.

 

Thanks for your input you bring up a lot of really good points. As a sophomore I didn't really know anything about private equity until a couple weeks ago when I got this opportunity, yet alone what TPG was, so I was unsure about whether or not it would beneficial to forgo ibanking and go this route. Not to mention I'd have to move to san fran for the summer and wanted to make sure it would really be worth it. But thanks you really helped me out.

 

I did lower MM PE the summers after both my freshman and sophomore years and will be doing banking this summer. In interviews make sure you stress how you are more interested in moving transaction to transaction in an advisory role, rather than focusing on growing and operating the same few companies. Draw on experiences you have this summer at TPG watching deals close and talk about why that is what you want to do. Having PE under your belt as an underclassman will make your resume stand out and help you if you want to eventually move back to the buy-side after a stint in IB.

 

If you are doing it before SA recruiting the you'll be fine. Just don't do it for your SA, thats what I did, I interned at a small PE Firm that was in the early stages of its first fund (Emerging markets Infrastructure). Guys were Ex Carlyle and Ex McKinsey (I actually turned down a Public Finance gig at a decent firm, for this). I did it thinking I would get some looks come time for IBD FT, but I was wrong. At almost all of the BBs I applied to, I was getting looks, but they weren't from IBD, it was stuff like Structured Fin, Project Finance etc...

 

Thanks for the advice Peter. Since my PE internship is from January to Apri, and I will be applying for SA right at the beginning of January, which by then I have just started working... is there anyway I can leverage my networks at the PE? I think it's hard for people to to refer you when you just worked for a week, but if anyone has done so before please share your story.

 

Obviously depends on your experience, what you actually did on the job, the bank/group that you are applying to etc but consider doing the following:

1) If you did market research for one of the fund's portfolio companies or for a potential acquisition target, you can talk about current industry trends, relevant ratios/multiples, primary competitors in the space, etc.

2) If you pulled comps to support LBO or other valuation/analysis you can talk about how you are comfortable using different data service providers to pull data, incorporating data into spreadsheets, and understand how companies are valued on a comparables basis.

3) If you helped one of the analysts download information from a data room during the due diligence process, you can talk about how you learned the importance of being hyper organized.

Focus on the type of skills that you developed or hope to develop:

  • proficiency in excel, word, ppt
  • attention to detail and error checking
  • being hyper organized
  • working collaboratively within groups or autonomously to support your team
 
junkbondswap:

Obviously depends on your experience, what you actually did on the job, the bank/group that you are applying to etc but consider doing the following:

1) If you did market research for one of the fund's portfolio companies or for a potential acquisition target, you can talk about current industry trends, relevant ratios/multiples, primary competitors in the space, etc.

2) If you pulled comps to support LBO or other valuation/analysis you can talk about how you are comfortable using different data service providers to pull data, incorporating data into spreadsheets, and understand how companies are valued on a comparables basis.

3) If you helped one of the analysts download information from a data room during the due diligence process, you can talk about how you learned the importance of being hyper organized.

Focus on the type of skills that you developed or hope to develop:

- proficiency in excel, word, ppt
- attention to detail and error checking
- being hyper organized
- working collaboratively within groups or autonomously to support your team

thanks junkbondswap, that helps a lot. But I was wondering more along the lines of why I would still be aiming IB when I did an internship in PE? Ex. would it work to say I preferred working on more multiple deals rather than working on a small group of companies for the long term?

 

I would say that the experience gave you a glimpse into what it is like to be on the other side as the client but that you believe you are better suited for an advisory type role. Maybe even provide an example of how a banker assisted your team during your PE internship (i.e. banker A pulled comps and provided industry expertise that helped support our investment thesis) and how you found that to be helpful/interesting. Then go into the traditional reasons as to why banking:

  • great place to begin a career as you will build a valuable skill set and have the opportunity to work with other intelligent, hardworking, motivated people. You enjoy working collaboratively in teams and serving clients. Etc.

Obviously some of this is bullshit, but this industry is built on bullshit. Good luck to you.

 

It depends on your career goals. Here are my 2 cents from what I know (I work in Asia). Also, please note that I am speaking solely from a career (Progression, Exit Ops, B-School, Reputation) perspective rather than a skill set related perspective.

1 - Among the IB's you have mentioned, all of them are tier 2 firms (With the exception of Macquaire), meaning, your exit opps will not be as great as a GS, JPM, etc.

2 - A LOT of candidates in PE in Asia have consulting backgrounds from M/B/B type firms. Hence, since you have landed your foot at the PE door through an internship, you are half way there without an M/B/B background. The PE internship can take you a long way, regardless of whether you want to move to IB or stay in PE. Remember, it is easier to go from PE to IB in Asia than the other way round (Since a lot of PE firms prefer ex consultants rather than bankers).

3 - If your ex opp is a top US B School, you have more chances of getting into a H/S/W from an Asian PE background rather than an Asian MM IBD background.

4 - If you don't intend to go to B School, you could lateral to another PE fund or top VC funds such as Norwest, Sequoia, Matrix, etc.

5 - Finally, if I were you, i'd go on for the PE internship. SCPE is HUGE in Asia and on par with General Atlantic, Apax, Bain Capital, Baring, etc. (Unlike US or Europe, very few funds do buyouts here). Most do growth capital financing.

6 - Firms here care more about the brand on your resume rather than deal experience (Unless you are at a BB). Doing 1 or no deal at SCPE can still get you an FT offer at another PE fund as an analyst. I can't say the same about an MM - IBD.

A top PE > An MM IB. Exclude Macquaire out of my review though, it is a top IB in Asia and can give you good exit ops (IB or Mid Tier PE).

 

The other two things would go quite far. Regarding the VPs/MDs at the banks, that can help you to a degree, depending on the banks, and depending on the staffing needs, but working at a KKR or the like will definitely help you break into IB. The question really becomes, if you can get into KKR, then why do you want to go to into IB - in other words, what are your end goals for an IB FT analyst program - and why don't you think working at a KKR would allow to fulfill them as well?

To your question, VPs and MDs can help to a degree, as I mentioned before, but working for a KKR style PE firm will definitely overshadow a poor GPA, especially if you get some relevant and solid experience (for the resume) out of it (and not just get coffees and read the newspaper the entire summer). I would say that you should be able to land a decent number of interviews, especially when combining both the internal recs and an internship with KKR - once you get the interview, however, it's up to you.

IBanker www.BankonBanking.com Articles, News, Advice and More Break Into Investment Banking

 

Sorry, I misread as analyst. If you are out for an associate position, have you been to B school yet (if so, GPAs don't often matter, it's more about name as Top schools usually don't disclose, or at least disclose with the standard 4.0), or have you worked in the field already - I was assuming your internship connections were for straight out of undergrad.

IBanker www.BankonBanking.com Articles, News, Advice and More Break Into Investment Banking

 

Seems like a lot of hoping and "possible" opps... An internship at KKR would certainly open some doors but not necessarily negate your weak academic performance / competiveness in the applicant pool. It would seem pretty obvious to me after reviewing your resume that you got into KKR based solely on a connection and not on your own merit (which isnt entirely uncommon in a business based on relationships) but still a red flag in my opinion come recruiting season given the very large and capable talent pool in this environment with prior deal/industry experience. Best of luck getting the internship.

 

I was in a similar position in undergrad (I was at a non-target, though). I took the PE internship because I figured that it would look better on my resume since PE is a career-path that is a bit more senior to IB, at least at the junior levels. I think that was a slight mistake, though, at least according to the feedback that I received during my junior-year SA interviews.

I would choose the IB internship over the PE one because the skillset developed there and what you will be working on will be more directly relevant to what you will do as an SA next summer. You will not put together any pitches, teasers, CIMs, etc. at the PE internship, and if this is anything like my PE internship was, the modeling experience that you get will be very limited. I hope that helps. Either way, you should be in a good position for SA recruiting next summer.

 

Go with the study abroad. Putting IB aside, studying abroad is great because it offers you a whole new perspective, allow you to learn more about yourself, and it may be your one-of-a-lifetime chance to do so.

Studying abroad, imo, makes you stand out when applying for jobs because not many kids can say they did the same. You can talk about how you learned to be independent and initiative.

Life is too short to be on WSO. But here I am.
 
animalz:
IB in NY

how about the names of the companies, are they any good? honestly, id go for stronger brand, NY is great but you will have a chance to experience it anyway

The PE firm is Cinven, the IB is a new boutique and is not a pure IB, although it categorizes itself as an IB. I don't think either will lead to FT, Cinven much less so from what I've seen.

 

What is your current internship? If it is investment banking, I would take the paid PE internship in London. Or, you can take the IB in NY, then quit just in time to start the paid internship. Also, have you graduated already?

Good luck.

The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.
 

I don't understand these questions. If you want to work in PE why would you do the IB internship? Do the PE internship. The only reason I could see you doing the IB internship is if you can guarantee a return offer from them and 2 years of IB experience is a pre-requisite to getting into whatever PE shop you are looking at.

My name is Nicky, but you can call me Dre.
 
aempirei:
I don't understand these questions. If you want to work in PE why would you do the IB internship? Do the PE internship. The only reason I could see you doing the IB internship is if you can guarantee a return offer from them and 2 years of IB experience is a pre-requisite to getting into whatever PE shop you are looking at.

Agree with my man here. It doesn't make sense. I get the feeling you want to take the IB Unpaid internship so you can live in NYC.

Fear is the greatest motivator. Motivation is what it takes to find profit.
 

Are you getting your MBA, or MSF? Do you have any prior work experience in banking? Your account says you want to do investment banking so, I'm confused a bit.

The people commenting above obviously don't understand how difficult it is to break into PE straight from school. Even the small funds want people with banking experience, but if you only have PE internships, they will see that you're going to jump ship after 2 years, and it will be very difficult to get a job.

 

Cinven is a well respected and recognized name and will look more impressive to IBs vs. a no-name or new-name, unpaid boutique. No brainer, take the PE internship.

While you can argue that IB internship will allow you to do more IB-related work, all in all, in an internship you're just going to do the same kind of thing (mostly comps and research, take some notes, update pitchbooks or in the case of PE some internal investment memos, and you'll get to help plug in a few numbers and study a model or two if you're lucky). Cinven is a brand and IBs reviewing your resume will think 'well, if they picked this kid, they probably see something in him'. It's passes an initial smell test.

Conversely, an unpaid (though, you though need to mention this in your resume) internship with a newly formed boutique (unless the head guy is a well known rainmaker) provides far less comfort as an initial pass. Because in general, newly formed (non-Moelis type) boutiques will in its initial stages of growth, will not be as critical or strict when looking for interns. While this may not be true, that will be most people's first impression.

 

I could be very wrong here, but I would easily take the boutique internship over the PE firm: 1. It seems like it could pay more, obvious plus. 2. It's actual banking experience - if you're looking to go into a BB/MM IBD, this could be a huge talking point in interviews and for resume selections. If you're concerned that you might not be doing real work again, bring that up with the MDs and just ask "what would my involvement be in these deals. a. The only point here that's a little weird is that it would be a work from home. Is there really no way you can commute up? Either way, nobody has to know that in interviews. 3. I think it'd look bad that you did PE, went to IB, and then jumped back to PE. Interviewers might feel that you're going to jump to PE immediately (there's an interesting thread on this about "overqualified candidates"). I think that could really hurt your chances.

Are you at a target school? If so, I think that really should solidify the decision to go to the boutique. Correct me if I'm wrong, but it looks like one of your main concerns is that in terms of networking, this boutique internship won't help very much. I think you could still take a lot of phone calls, and just plan a trip to NYC one week and catch up with your network.

I'm just a student too, so that's why I could be wrong. But to me, it looks like a boutique IB with meaningful experience would be better than going back to PE.

 

Yes, both are regional. My ultimate career goal like pretty much everyone on here is pe. It doesnt have to be a megafund, but i would love a large regional firm. I guess what i want to know is would working at this pe firm be that much more impressive and allow me to get a better job than potentially just working at the boutique ib if i did well in its internship program?

 

Literally hundreds of monkeys are attempting to move from internships to full time IBD and you want to do the opposite? Just listen to what you are saying.

Making money is art and working is art and good business is the best art - Andy Warhol
 

yeah.. it does seem like a bad choice.. but life really is better here.. going back to investment banking just doesn't seem very enticing...

also, the opportunity to study chinese for hours every day is really great. I want to be in China for the long run, and its really important to improve my language abilities.

but still,.. the trade offs are great. becoming an intern again... uggh... but, there was an intern here before who actually did a similar thing - left Raymond James IB in new york to do an internship here while studying the language, and now he's working FT at a Chinese hedge fund. I'm wondering if he was a special case, or if employes would actually not see my internship/language study in a negative way. Ideally, i would find a FT position at a PE fund in China, but its unfortunately a big risk when i already have a decent IB job..

Go East, Young Man
 

Right now my Mandarin is at the intermediate level, with no Cantonese. The challenge is making the big step to being able to read newspapers, discuss business models, etc. The previous intern had about the same level of Chinese as me, and was also doing part-time language courses and part-time internship.

Because, as you say, 99% of Greater China offices require Mandarin (if not also Cantonese), I need to master it sometime if I want to effectively work here. However, it is a big trade off, giving up a full time lucrative position…

But, a big part of me is saying “fuck it.. I should follow my passions”

Go East, Young Man
 

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- Bulls make money. Bears make money. Pigs get slaughtered. - The harder you work, the luckier you become. - I believe in the "Golden Rule": the man with the gold rules.
 

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