M&A at PE porfolio company vs Boutique MM IB
Currently work at a platform portfolio company (Canada) for a MM PE firm (Also Canada) doing all of the M&A (Just me and the VP). My role has a decent amount of responsibility (Managing DD, Valuation, and developing, operational/transition plan, and even parts of negotiation) and I also get a lot of face-time with potential acquisitions. I'm one year out of school and have never applied to IB
Want to end up at a MM PE firm, similar industry or strategy, but ideally would want to expand knowledge of how to execute different strategies and in different industries. I was approached by a MM IB shop (deal size about the size of the company I work for - same size as the PE shops I would be going for) and am wondering if this would be a better path to where I want to go.
Obviously I get a high level of insight into the execution of the PE strategy where I am now, since I'm basically the soldier on the ground at the portfolio company level doing it and would think that I understand the core drivers and how these actual businesses run and how our business runs at a very similar level to the PE associate job with which I would be gunning for - I do generally get a lot of insight into everything because we have a lean team.
The downside is that I'm very concentrated on a specific industry/strategy but this could easily be applied to others and lots of other PE firms do this.
Obviously since I have not worked in IB I wouldn't have same brand name and probably the modelling experience/breadth that an IB guy would competing for an associate job.
Do you guys think that portfolio company to PE company is a good path in the first place? Would the IB experience be looked at more favourably?
Cheers
Why do you want to get into MM PE? If it’s because you see it as a pathway to wealth through carry, there are better alternatives, particularly given the skill set you are cultivating. I would consider sticking around until the PE group exits your company, in which case you will have very demonstrable experience growing a company through acquisitions and strategy versus leaving to do IB or with a smaller PE group. The immediate comp may be better, but your career is likely better served by being more hands-on and involved now. You may find that what you’re doing now translates better for raising your own money to consummate a direct deal—where I personally see most MM PE investors (particularly LMM) shifting—wherein you have strong equity incentives and the potential to earn much more than you would working your way up the guarded and top-heavy MM PE structure. Additionally, I would not worry too much about the current industry in which the portco operates, as these skills are transferable. I left PE to do this myself, so perhaps I’m biased, but I think you’re on the right track given the way things are shifting. Really, becomes a matter of what you want to do in career, however.
Hey, I would be really interested in hearing about your shift from PE to actual ownership. Do you have a post already that dives into it somewhat?
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