So title says it all, which do you guys thing has better exits to HF/PE? M&A at a top MM with solid deal flow, or being in an average coverage group at a mid-tier BB (think BAML, CS)?
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It depends on what kind of PE. Do you want an MF or MM PE / HF?
If you want a MF, I'd say (would love if someone can confirm / deny) that it'd be better to be at a BB than a MM. If it's MM PE, the M&A and solid MM shop should be good for those exits.
In the end, look at where recent analysts went and see if you can chat with them to see what the exits have been like historically.
Personally, I'd do the MM M&A but that's just because I like the M&A aspect (FWIW - I've never worked in a coverage group, just M&A).
+1 SB, thanks for the insight. So how about specifically for HF recruiting, which do you think has the edge? Or do you feel like you can materially increase your chances in HF by proactively contacting headhunters/funds? The reason I'm asking is because unlike as a PE associate where you're largely an execution monkey, HF look more so for idea generation & performance is much more variable
I would largely agree with what StrategyJunkie said. One thing to add would be that even at the MM PE level, BBs are still cleaning up, so even if MM PE is your end-goal, you would most likely be best served taking the BB offer, especially if you really want to be in an industry-focused PE.
PE exit ops aside, make the call based on what you are most interested in. I started my career off at an industry-focused boutique that only provided M&A advisory services and then lateraled to a coverage group at a MM and got both M&A and debt-raising experience. I preferred M&A transactions by far, but putting up with debt raises was worth it to me because it allowed me to spend my entire time learning about one industry.
One thing that you really need to do your homework on is what this M&A group works on. At some banks, the M&A groups serve more so as an advisory function, and the analysts largely do nothing but put together presentations (read: very little to no modeling). At other banks, the M&A group only works on very specific (usually defined by size) transactions. This is not a bad thing, but might not be what you expected. Just something to be aware of.
Great insights here. At the end of the day, a top analyst at a MM will place better than a bad analyst at a BB so while brand name / bank matters, it's still largely up to you to prepare, network, and execute on interviews.
I would recommend doing a lot of diligence on the M&A / coverage group you're looking to join. Does the coverage group execute M&A or do they have a separate M&A group? Does the M&A group only do x industry, y size? Does this fit with the PE firms you'd want to work for? Does the M&A group do both buy side and sell side mandates?
Definitely agree. I probably should have included an "all else being equal" qualifier considering, like you said, that a bad analyst at a BB will be outplaced by a good analyst at a MM. Your experience and recommendations do matter.
Sorry, I'm quite late here but thanks for the response, +1 SB. I'm more interested specifically in HF specifically. Anything different you would add if this is my end goal?
But what a M&A group that focuses on sell-side advisory for PE funds? Would that be considered a solid experience?
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