Is there a significant PE recruiting drop-off when you're at a MM?
I don't think this topic has been brought up much, I'm definitely curious to hear what others think.
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Don't have PE experience but from reading the forum it would seem being in MM IBD tends to limit you to MM PE exit opps.
Second thing to consider is which MM firm you're at. Top MM firms would also have different recruiting options to teams that mainly deal with the mid to lower range of the MM spectrum.
Yes, it does. PE spots are hyper competitive. The top tier MM PE funds (the Golden Gate, GTCR, New Mountain, MDP type funds) will really only take BB and EB kids. MM IBD people are usually limited to non-top tier MM PE funds and more small, obscure funds.
I will get MS, but this is not really an opinion...go to their websites and look for yourself. Placement out of MM IBD into top tier MM PE is much more the exception than the rule. MM IBD placement to MF funds is even rarer.
This is true in general, and it will also depend on the PE fund. Of the names you mentioned for example, I've noticed that Golden Gate will really only look at MBB + GS/MS/JPM and elite boutiques, while I remember GTCR hiring 1-2 bankers from MM shops a few years back. Again, it is still much tougher coming out of an MM but you should target firms with a precedent of hiring non BB candidates in the past
I agree that this is true for top tier shops. However, there are tons of PE shops out there. Frankly, prestige aside, if you're gunning for a long term career in PE, being at a small shop gives you more upside. The more prestigious shops churn out associates with very limited career advancement. Where as getting in to a growing MM fund has much more long term trajectory if everything works out. That said, non PE exit opps are likely better from a prestigious firm.
If you're at a legit MM shop, think Harris Williams, you will likely get placed. I'm pretty sure HW for example has almost 100% placement. I'm sure other similar caliber shops place very similarly.
I actually disagree with this, and I am copying a post from another thread that I wrote:
By and large megafunds and upper MM shops are the best way to go if you want to stay in PE long term. Esp at the top MM PE firms (culture/comp/rep etc) a large chunk of their VPs come from megafunds who went to HBS/GSB. In fact, I'm pretty sure my old PE firm would prefer to hire someone who worked at TPG and then went to HBS rather than one of our own associates from B-school (obviously dependent on firm, and there are definitely firms that prefer to promote internally, with or without B school - if you find a firm that does it it's a good sign as it shows people want to come back and they care about associate development). I would say base case for someone who did PE (megafund or MM) and then MBA and didn't get the promotion is either step down PE fund sizes or leave the industry (HF, corp dev - which are often very attractive opportunities). Coming back to a comparable size fund is actually fairly difficult, and moving up fund sizes is even more difficult.
Megafund keeps your optionality most open as you have more tiers of funds to move down to. Also some megafunds actually have good hours/culture and its office and group dependent. It's not as if megafund associates don't attend firm meetings, board meetings, work directly with management on big deals, all that stuff - usually its 1 associate per deal team no matter what firm you are at.
The last point is comp (not just for those 2 years). In the future, once you are out of the 2+2 program, there is more variation in salaries and comp packages even at the same level. Some funds, esp the smaller/unstructured ones, will peg your comp package based on what you were making previously and step up from there, and they will have the headhunter get your old comp trajectory as a result. Since megafunds usually pay better (with some outliers), you'll prob be given better starting packages + better room to negotiate upwards after your PE program
This wasn't a debate about which one is better...jeez.
I was merely point out that 1) you can get placed in to PE from MM, some quiet easily, and 2) for some situations MM can be easier for long term. Also, I caveated my point saying if things work out. Furthermore, I stated that more legit firms are more prestigious and have greater optionality.
Your entire post is about top tier funds and top tier MM shops. News flash there are 1000s of PE shops. Like I said, if someone gets into a shop early / a small shop in an unstructured situation there is good likelihood of promotion within the firm, assuming both the individual and the firm do well. The odds are in your favor in such a construct relative to much larger structured programs that are more pyramid in nature and annual recruiting cycles. Did I say these means these smaller one off situations are better, no (not implying worse either, just different). Did I say MF and top tier MM isn't great, no (clearly more money, prestige, and optionality). I'm merely providing a very realistic viewpoint that there are multiple career paths that exist beyond the hand full of top tier institutions - both for people at top BBs as well as for people from more MM IB backgrounds.
BB analysts have access to the MFs and other large PE funds because the deal sizes the analysts do are similar to the deals the large PE guys do. Saying top-tier MM PE is kind of a misnomer. Those firms (Golden Gate, New Mountain, etc.) just do bigger deals which is why they are suited more for analysts from banks that do bigger deals, typically BB IBD analysts. Going to one of these firms is very similar to going to a MF.
There are plenty of true MM PE firms with fantastic reputations in the investment world that one may want to take over MFs and Upper MM PE funds mentioned for a variety of reasons and these are definitely accessible to MM IBD guys.
If you are at a top M&A boutique that serves MM space (Houlihan Lokey, Harris Williams, & William Blair) there are plenty of opportunities to jump to MM PE. These guys occasionally place some analysts to MFs as well.
I think there are some HL M&A analysts that exit to top funds like Carlyle and Blackstone. (Not talking about the HL RX guys who seem to pretty much place wherever they want)
Stephens Inc. has also recently placed some analysts at Blackstone PE as well.
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