Waiting to recruit for PE 'til 2nd year Analyst -- Too Risky?

It seems like so many IB analysts do PE recruiting on-cycle their first years as IB analysts. This strikes me as strange because -- after only working as analyst for a month or two -- you're already supposed to know that you want to ditch IB for PE?

What is the risk to waiting until your second year to recruit for PE? Are you perceived by some PE firms to be "too old," or are there fewer slots available? It just seems to me that you'd want to experience IB for a year, and the group that you're with, before you decide that you're going to switch both industries and firms... but it also seems like most analysts don't share this view and decide to recruit for PE during their first year.

I'm just trying to understand why this is the case.

 

Disclaimer: I haven't recruited for PE, so it's just my 2¢.

But, from the analysts I've spoken with through network that waited / didn't recruit, they say they're better prepared because they have actually completed deals that they can speak to during interviews as well as modeling experience for the modeling/LBO tests some firms do.

 

Thanks. That brings me to another question...

If one recruits for PE during their first year, is unsuccessful and doesn't land offer, does this in any way impact them adversely if they want to go recruit for PE again their second year? In other words, is there a stigma against you for that second year if you were unable to land a PE gig during your first year?

 

Not recruited for PE yet but talked to a bunch of people and here's my understanding- if you are super committed to MF and are working at a top bank, you probably have the best chance of landing somewhere like KKR by recruiting on cycle. If you are more of a normal human at a non-super top bank and aren't committed to PE recruiting in your first month on the job, lots of opportunities (especially MMPE, GE, etc) pop up later through off cycle and it is definitely possible to land something, but landing a MF is likely going to be harder.

 

UMM associate here (I know this account title says otherwise)

  1. Recruiting as 2nd year is becoming more and more common. In the past year’s cycle, my firm focused on hiring 2nd years since much more experience and really hard for us to really decide if 1st year analyst is good or bad (most interviews didn’t go anywhere because first years just didn’t know anything we were asking about or we could tell that they are speaking out of their asses).

  2. So yes, recruiting as a second year is an advantage actually. The only downside is that because you are recruiting on cycle, you have to do an additional year of analyst banking (I.e. you have to join two years later just like you would if you recruited first year). That extra year of banking will suck and Idk if firms will be receptive to a gap year.

  3. As mentioned above, if you want to recruit with top MF and UMMs, on cycle is definitely the way to go. Firms are now starting to save some seats for joining after 1 year (so you recruit as a second year and leave after one year to join PE firm vs. doing another year). But that’s not a common thing yet.

 

Thanks. But just to clarify...

If you recruit at beginning of your second year, get a PE offer... but your IB doesn't offer/allow you to do a third year as an analyst, you will then have to find a third year analyst job at another bank... or the PE firm might rescind your offer?

 

I would assume your bank would keep you on for A2A if you had success recruiting for PE (shows competence) if they do not have a 3 year analyst program. Does this sound right to people that have done/seen this? Just what seems logical to me

 

Agree if you don’t get 3rd year due to performance, there are bigger issues at hand.

If it’s circumstantial/bank not doing well with layoffs or whatever it’s a conversation to be had with the PE firm (id assume they will be accommodating to the extent it’s not just you trying to bs you way out not doing another year of banking).

 
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