Lateraling to a Better Firm for PE Recruiting
I want to try and lateral after a year from a MM firm to a BB/EB with better exit ops, since my ultimate end goal is UMM/MF PE. I have a few questions for anyone who has gone through a similar process.
How does lateraling impact PE recruiting?
Do you recruit on-cycle and stay for 2 years at the new firm or recruit off-cycle for a position 1 year out?
Does it look bad to do 1 yr at each firm / are you expected to stay for 2 years at the new BB/EB before leaving?
On-cycle will happen ~1 month into your first job at the MM, so if current bank is actually an impediment to PE recruiting, you’re out of luck for that round (still worth looking at, but know that if you interview and strike out it’s harder to get good HH looks the next year — however, a lateral to better bank may somewhat reset that).
If you successfully lateral (usually around April of first year) to another bank, both options are on the table. You’ll have a lot more numerous (and arguably better) opportunities if you do on-cycle year 2 and depart after your third year, but you can definitely recruit for an earlier exit (though this usually means a clawback). The fact that you already lateraled will be a sign to HHs that you interview well.
Not OP but is it worth lateraling up after 1 year to a top BB/EB for exits if you're already at a top MM/bottom BB? (think Jefferies/RBC/Wells Fargo)
Also, is lateraling done in April because stub bonuses are normally paid in March?
To kind of piggy back on this question. Does this mean you are giving up your first year bonus at the first firm by lateraling in April assuming the first firm pays bonuses in July/August?
Jefferies and RBC guys place a few analysts into MF and quite a few to UMM so might not be worth lateraling although a higher tier BB/EB will definitely make it easier. This is very group dependent tho.... very big caveat.
Kind of a tough question; really depends on where you want to end up. If it’s MM, you can probably swing it from your current role (plus you could do on-cycle and start a year earlier), though top BB / EB would certainly help, albeit a year later. If you’re looking to work at Carlyle, then yes, probably worth your time to jump to GS/Lazard for a year then recruit for a 3rd year exit. However, in the latter case, it’s important to remember that 1) very few people get to work at top MFs and 2) some of the reasons you work at WF, etc. (non-target school, lower GPA, don’t interview well, whatever) may again be impediments even if you now have GS/Lazard on your business card. PE recruiting is way more competitive than lateral IB.
To your second question ~end of Q1 is lateral time because teams have an idea of true capacity now that 1) first years are ramped up and 2) people have jumped early to PE / HF. Early Feb associate bonuses play a role on them departing, but analysts are typically paid in July so it probably doesn’t really factor.
If we are at one of the banks listed (RBC, JEF, WF, DB, UBS) do you think it's better to recruit on-cycle year 1 or wait until on-cycle year 2 so we have more deal experience? This is also recruiting for MM funds.
On-cycle year one if you're sure you want to do PE. A year's worth of experience just gives interviewers more question material.
If you're a top bucket 2nd-year competing against 1st-years who just hit the desk, that's a data point in your favor, but the majority of kids hired (historically, though this could be changing) are still first years who will depart their banks after 2 years.
Wait, so you're saying that you'll probably exit better interviewing at the beginning of 1st year at an okay-ish group at a bottom BB rather than 1 year later at the beginning of your 2nd year at a top BB or EB?
Then there wouldn't be in any point in lateraling up if you recruit before lateraling and you're better off recruiting when you barely have any experience.
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