Associate & VP-level allocator exits - BB or EB?
Ignore title.
LMM IB and F500 corp dev experience going into a top MBA program. Don’t want to count my chickens, but given MBA placements along with my prior finance experience, I feel like I’d have a significant advantage in IB recruiting to where I’d have my pick of the litter of top BBs and EBs provided that I prepare well for interviews.
My end goal is to work in alt allocation - preferably primary PE fund of funds, coinvest and secondaries for a large allocator (FoF, FO, SWF, E&P, etc). What’s the best way to optimize for this exit?
Are these exits doable at the associate level? Would I be better off hanging on until VP? Top BBs tend to have the best name recognition outside of finance for things like F50 corp dev exits, but does that hold true for allocators who are presumably knowledgeable of various IB firms? Would it hinder my exit opps if I took a EVR/LAZ offer over, say, an MS offer for deal reps & comp? If at a BB, would FSG be the easiest to recruit from?
Thanks in advance.
Based on the most helpful WSO content, here's what you need to know:
Exits to Allocators at Associate vs. VP Level: Exits to allocator roles (FoF, SWF, etc.) are possible at both the Associate and VP levels. However, staying until VP can provide more seniority, deal reps, and leadership experience, which may make you a stronger candidate for allocator roles. That said, many allocators value the technical and deal experience gained at the Associate level, so it’s not mandatory to stay until VP.
BB vs. EB for Allocator Exits: Both BBs and EBs can position you well for allocator roles, but the choice depends on your priorities:
FSG (Financial Sponsors Group): If you’re at a BB, FSG is often considered the best group for exits to allocator roles. The group’s focus on private equity clients and fund-related transactions aligns well with the skill set allocators seek.
Optimizing for Allocator Exits:
In summary, both BBs and EBs can lead to allocator roles, but BBs may have a slight edge in name recognition. If you’re targeting allocator exits, prioritize deal reps and networking, and consider FSG if you’re at a BB.
Sources: Lateraling PE to PE, Exit opps: I've crunched the previous work experience of 390 PE Associates.., Private Funds Group (CS/UBS etc), Breakdown of Post-IB Exit Opportunities, Why is MBA -> IB so accepted, but MBA -> PE is a rare occasion?
For an alt allocation exit, both BBs and EBs work, but BBs tend to offer I think better name recognition. At the associate level, exits are doable but more common at VP, when you’ve built a solid track record. If you go BB, S&T could be a good option. The choice between MS vs EVR/LAZ depends more on the specific deal exposure you want—MS offers broader market access, while EVR/LAZ can provide more deal reps.
Following - also generally curious for those knowledgeable about the space. For VP/Director level exits in allocator roles, do you see many people come from the sell-side like OP proposes? Or would laterals in typically be from the buyside?
Laterals are generally preferred from the buyside but have seen both. VP vs ASO entry varies at firms once seats are generally limited with little turnover (no one VP+ has left my firm in the past 5-years). Certainly more turnover and/or 2 and out programs at the junior levels while the mid/senior role people are generally more stationary and opportunistic when looking for a role.
Thanks, that makes sense. On lateral timing, what point in your career would you think is a sweet spot? Optimizing for comp/WLB/chances of making the jump, would you say that's at VP/Director/MD?
For optimization, it would be best to get a spot at a good firm that you can progress at as soon as you see opportunities arise. Like the other commenter below, you're not gaining anything by staying out of allocation roles unless you're gearing for a co-investment role (then the alternative would be at a regular-way PE shop). ASO/VP would be the best timing in that case.
If you want to allocate, allocate. A couple years in banking, unless you’re targeting a coinvest role won’t add much value to your resume. You already know the nuts and bolts given your prior experience — as a mid level professional, you should know the market universe, be well versed across various private investment strategies, and start to have a network of GPs.
A couple years in IB will not further the above relative to just doing PE FoF.
Source: am an allocator
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