Interning/Starting at a Smaller PE Shop
I'm in the process of interviewing with a variety of BB banks for IBD positions although I'm also realizing that it's going to be very difficult to land a spot. There are a few smaller PE shops that also recruit on campus for both the summer and for full-time. One specific company I am looking at has 25 employees. Comp is $60K base, ~$30K bonus.
Is it possible to make the transistion from a smaller shop to a bigger PE firm after a few years if desired? What would be some of the benefits of interning/ starting for a smaller PE shop straight out of undergrad vs. going to the banking path? Disadvantages?
I am very interested to hear this answer as well. Also, how would a BB value an internship at small PE shop going into full time recruiting?
Thanks,
I am curious as well and would appreciate any insight
bump
It is possible to make the switch, but you will either need some contacts via networking, or a continuing degree (MBA, for example). While you can apply to jobs in banking without contacts, it will be much more difficult as analysts coming from BB IB will essentially have top choice, as compared to an analyst coming from a small P/E shop. Again, it is the quality vs. name debate, and if you have both, your resume is looking good, if you have one, then you should be able to line up a few interviews and run from there, if you have neither, then you are going to have a difficult time without some solid contacts in a few IBs. Right off the bat, the P/E shop is eliminating the "name" aspect, so now it will be a question of quality of the experience, quality of deals/projects. If you work on some bigger, interesting projects, and take on an integral role in the legwork, then you can absolutely put together a compelling resume (for this position, at least). From there, you will still probably need a few contacts (or an MBA, as that is an option for you after a few years in P/E as well) to break into BB IB.
The benefits of working in a smaller P/E shop lie on the quality side of the line - if you are part of a group that relies heavily on its analysts, then you can definitely gather a wealth of experience, and probably even contacts within the IBs who work with you on the transactions. If, however, your P/E shop has more of a strict hierarchy type of structure, then you may find yourself with slightly more, the same, or much less experience than an analyst coming from BB IB, in which case you will be at a disadvantage, both in name and quality.
Considering most people generally go from IB to P/E, most already have that IB training, exposure, and experience under their belts before running to P/E. That said, if you believe that this P/E shop will offer you some valuable experience and deal exposure, while at the same time offering probably a better lifestyle and decent pay (oh and an actual position is nice, especially considering BB is more difficult to break into now and the economy isn't the best), I would take the P/E slot, if BB doesn't open up, and really work to make the most out of it. You've always got the MBA option, the MM IB option, and the networking avenue to make the jump into BB IB as the market begins to run again.
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when you say quality side on the line, what do you actaully mean. how do i know if the work i am doing is actually quality if i have never done a BB SA internshop before
By quality, think "value add." In other words, if you are doing work that directly relates to a deal, that needs to be done, the results of which help to shape decisions, or move a deal forward, then that is value add. For example, editing a pitch or researching a potential deal is good, but isn't real quality. Running with a model, running sensitivities, putting together a market update pitch (including drafting slide language yourself), analyzing pricing trends for a live deal, analyzing a project model, etc, are all tasks that, especially if they lead to a live/closed deal, are value add, and essential to making financing and deal selection decisions.
Essentially it is the difference between the grunt work, and deal related work. While it is hard to know which deals will go live and close, you can probably find out if they rely on their analysts to run models, draft language for memos and slides, and actively contribute to deals, or if they are, at least for a while, more for editing, reviewing, aesthetics, stock research and formatting (these are essential tasks, but not highly valued). I'm sorry if I was a bit confusing in my last post, hopefully this at least helps to clarify what I meant. There will always be grunt work, and tedious tasks as an analyst, but the key is to find an opportunity that offers a healthy dose of quality experience as well.
IBanker www.BankonBanking.com Articles, News, Advice and More Break Into Investment Banking
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