I've been removed from the analyst program for 10 years when I got brutalized like so many of my cohorts. I wanted to know given that there are now so many analysts in the street (is it 50% more?) will getting into PE or HF be multiples times harder? Or are there much more opportunities out there now then there was 10 years ago.
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There are more PE shops nowadays, too.
Of course All IB analysts want to go to top shops like KKR but there are plenty smaller, local PE shops find it hard to hire IB analysts to join. Analysts are being selective, too. There are quite a lot more PE shops out there.
BB Analyst to PE, just how competitive? (Originally Posted: 11/14/2007)
Generally speaking in the current economic environment, how competitive is it to go from an analyst at a BB to PE? I don't mean the top PE firms like KKR but those that pay similar to BB analyst positions with better lifestyle. Is it as competitive as getting into a BB from undergrad (i.e. top 1% of cohort) or are PE firms climbing over each other for middle bucket analysts?
i am guessing it's mad competitive since this is practically the #1 (and easily most lucrative) exit opp for ib analysts. they're all jumping on each other to make as fast an exit into pe as possible. so, i am guessing it's fairly competitive nonetheless..
You have to remember that the recruiting environment in the March to July timeframe was at its peak, so it definitely won't be like this same time next year. But generally speaking, the top bucket analysts got first rounds wherever they applied (to my knowledge, anyways...noone I knew that was top bucket got denied a first round). The middle bucket analysts still found jobs, but primarily smaller firms (middle market average comp is slightly lower than what you'd make as a third year analyst at a BB in 2007). I knew a few middle bucket analysts that still got interviews at some pretty decent upper middle market shops (i.e. Code Henessey, Thoma Cressey) but no one who actually landed the job. But I have to believe that if you get a first round it's your job to lose.
What are some other "top" MM firms?
Golden Gate, Audax, Berkshire -- those are the ones I know, since they seem to take consultants...
Thanks for your insight GameTheory! Approximately what % of BB analysts would you say successfully make the transition.
I agree...
Probably Golden Gate, Berkshire, and Silverlake (Maybe HF also)
i know someone who went from deriv operations after none months into boutique PE. He is at wharton now.
i think all this talk about going from bb to pe is "too structured." it depends on your own abilities and your connects.
The way I think about it there are mega-funds and funds right below the mega-funds. The tier directly below I consider to be shops in the 2-5bn range (i.e. GTCR, Silver Lake, H&F, Leonard Green, Welsh Carson, Stone Tower, Apax, etc.). Those two tiers hire almost exclusively from top bucket analysts, especially since having a smaller fund at that level doesn't necessarily mean you're less sought after. In fact, I would argue that these funds are just as highly sought after for their combination of historical performance, prestige, and (relative to the mega-funds) lifestyle.
Keep in mind that "middle market" describes almost every fund out there (if you define "middle market" as enterprise value of 500-1.5bn) and the term tends to be somewhat confused.
In terms of what % actually go from banking to PE, its very dependant on the group. In sponsors I would argue much higher, maybe 75-80%. In your average industry group maybe around 50%, but not everyone wants PE. For the most part in my particular group, everyone that wanted PE got it in some shape or form with the exception of maybe one or two.
GameTheory - did you mean to express the "middle market" size range in terms of enterprise value? I was just curious as I've rarely seen a fund's size referred to in this way (i.e., in terms of a fund's total potential buying power rather than its equity).
In any case, I generally tend to think of MM PE as being more broad - including funds ranging from $250 mm up to $5-7.5 bn.
GameTheory means funds that buy middle market companies (he's talking enterprise value of targets). And the point, I believe, is that even some of the firms investing large funds play in lots of middle market deals, some (cerberus) more than others (kkr or blackstone). Also, I think people probably underestimate h&f here (hoowa06 at least); they're top notch and their current fund is 8 I think, which is as big a fund as had ever been raised until 2+ years ago. And finally, not all top analysts go to PE, there are hedge funds (perry, maverick, sac) that attract smart smart guys too.
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