Looking back at my progression towards banking, I realize how important it is to get an early start and to lay the foundation for future plans. That said, I'm hoping that someone can answer any of the following questions:
-M&A has only 2 spots left. Levfin is dead at the moment. Sponsors is too "relationshipy", and thus unattractive for me. What would be the next best group for PE recruitment?
-What are the PE firms that have historically strong relationships with Merrill? I've been told that Merrill places well at MDP and THLee... elaboration/confirmation appreciated. Are there any firm where Merrill bankers comprise the majority of the Associate team (similar to Bain->BainCap or Bain->PEP)?
For any 1st or 2nd year analyst: I'd imagine that it's hard for headhunters to differentiate between many analysts, especially between two analysts coming from same firm & group. What can one do early in his career to stand out during buy-side recruiting?
Is recruiting such that there are enough spots that anybody from a decent group/bank who is interested in PE will ultimately land a spot at a reputable firm - or is it like banking where someone coming from a "nontarget" group needs to put in a bit of legwork?
As a precursor to the answer to your questions, I'll just say that while I realize many people think about PE long before they start their jobs in IBD, I still believe you're putting the cart before the horse at this point. At most you've got a summer of IBD under your belt, hardly enough time to make an accurate judgement on how much you like the work. But I digress.
Any decent to strong group at a bank will give you a good shot at landing interviews. My recommendation is to take a look a the strong groups at Merrill and pick one in which you have a significant personal interest and get along well with the people - the deals will come. There is no buyside bias towards product groups or industry groups. Merrill is a bank I'll be the first to admit I'm not the most versed upon - I had an acquaintance in the M&T group that claimed top placement, but he was also a pretty big exaggerator.
Recruiters hold the key to any success you have in landing interview slots - they look for a weighted average of a lot of things. In an ideal world, you'd have one or two announced transactions in your first six months (preferably M&A or LBO) where you were the "lead" analyst. They also gauge how well you represent yourself, your story, and your experience - how presentable you are. Also, top ranking is key - many firms will not even look at you if you are not top tier. How do PE firms know how you rank relative to your peers before your reviews? They call MD's and ask where you stand vs. other analysts.
I don't know of any firms that have special relationships with Merrill analysts. My guess is that some firms may have a disproportionate amount of analysts from one firm from one year to the next, but it has more to do with the quality of individuals in any given year. Of the two firms you mentioned, they definitely do not have a special relationship with Merrill - one of them has a disproportionate amount of analysts from my former bank (and specifically, my group...not Merrill).
I wouldn't worry about firms discriminating against groups. Some of the top funds will reach out to certain groups first, but they will never fill up their entire class with their "target" groups. You'll find that people in stronger groups tend to interview first, but most bigger funds have multiple "superdays" and everyone from every big bank is considered (pending recommendation by recruiter, good experience, and good personality).
I would echo him that too many people think about buyside jobs way too early and therefore don't get as much out of banking as they should. It also limits you from exploring other options. As it is right now, you don't have enough information to decide on whether it's right for you or not.
In terms of standing out, if you want to go to large PEs like the ones you mentioned, you need access to recruiters. Personally I hate this system because most of them are really annoying, but you have to go through it if you want to go through that path of top school --> banking --> PE.
While having announced deals is nice, it's more the deal experience you have, whether it's on announced or unannounced transactions, that sets you apart. This is why making a good first impression is so important - you won't get that experience unless people like you from the start. It's also crucial because that experience will be part of your private equity resume.
In terms of group selection, I would avoid groups that do a lot of IPOs and non-M&A type deals... you learn very little in the way of technical skills with IPOs and little about the process to acquire companies. So go with a group that has good dealflow and does mostly M&A/LBO deals. The people are also important - I wouldn't go to a "good group" if I didn't get along with them, for example.
It's good that you're thinking about this early, but I would suggest seeing how you like things first and then deciding what to do after you've been there a few months (but before recruiting really starts).
Taking myself as an example, I did a lot of PE interviewing and recruiting across different types of firms and then realized it did not make sense for me based on what I wanted to do in the long-term. It may make sense for you, or it may not, but you probably don't know yet.
But it's crucial to use interviews as an opportunity to "test the waters" at different firms/jobs rather than just trying to sell yourself, so keep that in mind too.
http://www.leveragedsellout.com/2007/07/breaks-in-the-track/
I wish more people who ask this board/me for advice could look at that diagram/article...
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