Due Diligence shops?
I've heard that LEK and apparently PEY too are due diligence shops. What are some other examples of consulting firms with a strong focus on due diligence? Would OW, S&, etc fall under this category too?
Strategy&’s Deals team is usually regarded as the top notch, some put it above the rest of S&.
Why is it generally regarded as better than other verticals in the firm? Just curious, esp. as I know it's one of the newer teams
No idea, not much talk about it on the firm (Current intern with the Corporate and Business Strategy team) most of the talk I’ve seen regarding Strategy& Deals being “better” is online, though it does seem to be the common opinion across some geographies (Read: US and UK). It is probably probably due to the fact that it’s one of the better options for those wanting to do PE or switching to banking down the line.
Strategy& as an entity already pays a very considerable premium and recruits much more premier talent more in line with MBB and T2 Strategy Shops than PwC Management Consulting (AKA the non-strategy group), Deals ain’t that much different besides that the work that they do is much more DD related ( as expected).
It's not exactly new. Technically it was not part of Booz&co but it was spun out from PwC Transaction Service startegy and aligned with the then newly rebranded Strategy& for compensation and talent attraction.
Since then it has definitely grown massively in prestige and attracting top tier talent both at graduate level and lateral hire. Opinion in the industry, including buy side seems pretty high, especially in Tech.
They have been hiring a lot lately as per my LinkedIn feed at all levels, so I suspect they have been riding the wave of acquisitions lately.
As far as I know more than 50% of their work is deal related, but they do a lot of strategy too
From what I know, they also hired a ton of Partners from MBB for their Deals Strategy group so that probably makes it a better group. Also, I know that the list of schools that they hire from is very small (think HYPSM and not other ivys mostly) so that might add to their status among new grads.
Every seller forecast I have ever seen from LEK has been so stupidly inflated that I only use it to put way out of reach milestones in my term sheets. If you believe it's a $2 billion peak sales deal then you should not mind 1/3 of the value coming after the first billion right? You collosal idiot? I'd honestly be embarrassed to say I worked in their healthcare group. They do their clients no service at all.
So I'm assuming LEK isn't that great right LOL
Their healthcare DD group is a running industry joke in pharma.
I mean its a sell side DD, what do you expect...?
I mean on the one hand, yes it's a sell-side DD there's obviously going to inevitably be bias there and you have to take it with a grain of salt.
On the other hand, the level of intellectual dishonesty that LEK is willing to sign off on is fucking absurd. There's making an aggressive case and then there's being a shill with no integrity whatsoever and LEK consistently chooses to be the latter. No knock on the junior folks because at the end of the day, it's a good paycheck I get that, but my god the partners signing off on those reports should be ashamed of themselves.
Wow some of the comments here are way too harsh.
Personally, I’ve found their reports rather useful - particularly during Covid when I ran out of toilet paper
I read a ridiculous LEK sell-side market report for a healthcare company riding the COVID wave and killed the deal right after. Couldn’t even take the projections halfway seriously they were so high
If you want the job done right, hire Bain, maybe McKinsey/BCG if you're looking at a non-US geo.
If you want a bunch of shills to tell you what you want to hear and rubber stamp a report for the lenders, hire Parthenon or LEK.
Source: direct experience working with all of the above on the client side.
Edit: I just want to clarify since I know this is a careers board first and foremost - I think very highly of the junior/mid-level folks at LEK/Parthenon. I think they're probably great places to work all things considered. But as a client, I don't think very highly of their work, which is mainly a reflection of the senior partners. And I don't think they're incapable or anything -> I just think they have no integrity or backbone.
Can you expand on how S& Deals Strategy differs from LEK? I thought LEK was considered a top notch DD shop? First time hearing such dissatisfaction.
I've never worked with S& so can't comment.
LEK is definitely a top 5 shop... In a market with about 6-7 legitimate competitors. They're at least better than Stax I'll give 'em that.
Got a similar comment from a VP friend at an UMM fund - basically they would have loved to have Bain work on every deal, but they're really on the expensive end. The analysis apparently is just a level deeper + you get a solid value creation case out of it. They would basically hire Bain for bigger/ more intricate deals while going for other consultancies for "confirmatory" work.
Agree, we do the same. If lower conviction from the get go or smaller equity ticket then you can't hire Bain.
There's also some other smaller shops that make a name for themselves in certain geographies or sectors worth looking into e.g. Candesic, AMR International, Stax Consulting and CIL Consulting
Nice post
Bain is the clear leader in this space. Then it goes McKinsey, BCG, and then EY-P/S&/LEK
OW, Kearney, and other Big 4 also do work in this space but it's not what theyre known for (ie, low market share and you'll mostly work with smaller funds who can't afford MBB's rates)
I agree that Bain is the clear leader in the space but, for DD, I wouldn't put McK and particularly BCG on a huge pedestal. BCG is trying to expand their DD coverage through establishing their PIPE practice but they haven't yet hit scale or have a long track record - their relative "prestige" is an extension of their brand prominence and the fact that there is heavy crossover in the skills needed for DD and market studies/growth strategy so the learning curve isn't steep.
I don't know much about S& deals but would have a hard time thinking they're on-par with EYP / LEK / McK yet. Probably on-par with BCG, with BCG having the edge on talent and S& having the edge on PE connectivity, although BCG is quickly hiring up to fill this gap and would anticipate them being on a McK level in a few years so good place to grow. My two cents (CDD work only):
Tier 1: Bain
Tier 2: McKinsey
Tier 3: EYP / LEK (hadn't heard all the LEK horror stories reported here but I also don't go anywhere near HC)
Tier 4: BCG, S&
Worth noting that I never understood people going into consulting to focus on CDD. If you want to work in a deal setting and put in long hours, why not go the IB route and get paid way more? If you can get hired by one of the above firms you can get hired by a respectable IB.
BCG loves a cheeky price cut to gain market share.
On the last point - CDD experience offers good exits to PE portfolio operation roles or getting hired into a PE roll-up. Some of these can be very lucrative with a chance to move up quickly. It's often overlooked by more junior consultants cause it's not very sexy but you'll see a lot of Managers/ APs (even partners) leave for these kinds of roles at fairly senior levels.
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