What Consulting Areas Teach Investor Skills & Technicals?
Was thinking about PE and IB and how they value people with an investor mindset and technical skills. Ik management consulting for one gives you the best foundation in problem solving and operational stuff, but is there a way or an avenue of consulting that provides investor and technical experience as well as strategic / ops experience? I'm open to consulting types outside of management.
Based on the most helpful WSO content, certain areas of consulting can indeed provide a foundation that aligns with the investor mindset and technical skills valued in Private Equity (PE) and Investment Banking (IB). Here are some avenues to consider:
M&A and Transaction Advisory Consulting:
Economic Consulting:
Strategy Consulting with a Focus on Capital Projects:
Operational Consulting with a Financial Lens:
Venture Capital-Related Consulting:
If you're aiming to build both strategic/operational expertise and investor/technical skills, focusing on consulting roles that intersect with finance, M&A, or economic analysis would be a strong choice. Let me know if you'd like further insights!
Sources: Q&A: Consulting v. Banking, the age old question. By Former MBB and Bulge Bracket Banker., Q&A: Former MBB Consultant, Confused Scientist: Where do I fit in? Strategy Consulting, Venture Capital, et al., Q&A: Former MBB Consultant, Q&A: Former Strategy& associate
It's not easy, but econ consulting, and stuff like TAG and RX maybe?
Some others on here could give you a better idea imo.
Frankly, it really depends on how you're defining Investor Skills. Broadly, you could break this down into four quadrants ranging from: strategic to operational and from qualitative to quantitative.
Strategic & Qualitative => Restructuring Consulting Performance Improvement or pure-strategy Strategic Consulting would give you insight into how to breakdown a company and restructure a company by shifting strategic priorities.
Operational & Qualitative => This goes into supply-chain operations management, revenue operations management, and incremental efficiency initaitives that can be applied to increase the health of the firm. Going into specific functional areas would be the best way to gain exposure (such as Consumer Analytics at EY)
Strategic & Quantitative => This often aligns to quantitaitve-focused Restructuring Consulting with three-statement analysis, transaction advisory services, and quantitative-heavy consulting practices such as Oliver Wyman's Private Capital group.
Operational & Quantitative => These groups that get into the key drivers of revenues and costs looking to clean up the health of a specific section of the balance sheet or income statement. Once again, focuses heavily on incremental operational efficiencies. Examples include EY's Working Capital Advisory Group or Financial Service Optimization group. Technically, Deloitte's Value Creation Services and Finance & Performance also fall in this category, but it's been a while since I spoke directly with these groups.
Now, the final aspect I didn't dive into is the ecosystem of exposure: if you're working with early-stage SaaS companies, you'll likely be working less in quantitative-operational aspects because their books aren't mature enough to identify efficiencies, and the focus may be on Strategic & Qualitative aspects like product-fit validation for a more broader growth strategy. If you're looking into an established CPG company, then no matter how strategic the engagement begins, it will include some aspect of operational analysis to gather firm-specific nuances (like how the supply chain exists in the status quo or how pricing of beverage products categorized by 500 - 1,000ml differ by regions).
Is one better than the other? Well it depeneds on what you want to specialize in and where you want to work. Those that are comfortable with quantitative analysis often work in Rx Consulting or continue down the path of a quantitative-heavy workflow. Those that pursue qualtitative analysis may do anything from joining client companies for in-house corporate strategy (or Strategy & Operations) to joining VCs for assessing potential target firms of their domain exposure/expertise.
All of it is technically "investor skills", but the skillset varies quite drastically. It's no different than how a skillset of a CEO, CFO, and COO all differ despite them all being C-Suite of the same firm with the same ecosystem and domain exposure.
I see, that's very insightful. What's quantitative focused restructuring consulting?? I thought it was just restructuring consulting...is there a separation between qualitative / strategic and quantitative, with different firms?
For someone aspiring to be a CFO one day, what bucket would set them up better? What if they're trying to get into the investor side (PE investing etc)?
It's basically which role you take in restructuring. You could join a quantitative desk where you're the one building and maintaining the 13-week cashflow models or you could join a qualitative desk (strategic performance improvement or private equity performance improvement) where your workflow is more managing operational efficiencies and implementation of growth strategies; less so on the financial modelling front.
They’re both very much equals part of the job. All shops will be doing both.
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