Alternative Pathways to PE
Hi everyone,
I posted on this forum some time ago about about my near-term plans to pursue an MBA in the US in order to switch careers from financial comms/ IR to IB, ideally based in the US. The reality is that IB would have been a stepping stone to PE, not a long-term career play, as is the case for so many. However, I have since learned that because of my relatively unconventional background and the fact I would (in theory anyway) be entering IB at a later stage, my chances of successfully transitioning to PE would be very slim.
As I understand things, there are three main paths to PE at an earlier stage in life (i.e., not joining as a senior exec):
IB --> PE (most common path)
MBB --> PE (also viable but relatively less common compared to path 1)
Luck out and go straight to PE from undergrad (very rare but I know there are firms, such as Terra Firma here in London, who recruit from undergrad. I'm sure there are US equivalents too.)
I'm sure there are other routes, but for the sake of this discussion, let's assume those are definitively the main ones.
The problem with this is that most people following these paths are younger than me (early 20s whereas I'll be 27 next month; I'll be 30 when I complete the MBA, assuming fall 2024 enrolment). As such, rightly or wrongly, they are seen as easier to train/ integrate and cheaper to hire (although ironically the average 1st year PE Associate's salary is higher than mine 5+ years into my current job).
The questions I have are:
1) Is my current plan of MBA --> Post-MBA Associate in IB --> PE viable?
2) Is there an alternative route? If so, what is it?
3) Would MBA --> MBB --> PE work better at this point in life? (Even assuming a narrower range of PE firms I'd be suited to)
4) Is the desired PE play generally a pipe dream at this point?
I shared this on the other forum, but my background in brief is:
*27yo (26 as it stands but let's just say 27)
*Currently based in London
*Graduated from the London School of Economics (with honours, awards, scholarship); equivalent 3.7 GPA
*Have built several small businesses during this time (two failed; one is now profitable)
*Trustee of a multimillion pound non-profit; interviewing for another Trustee role
Thanks for your insights!
I will be as honest as I can, but this is very unlikely so I would say to make this whole plan an upside case and assume you’ll stay in IB or MBB. I’ve been in PE for 3-4 years and haven’t seen someone transition at the MF / UMM PE levels post-MBA. However, there are a minority of MM / LMM PE firms that do accept post-MBA folks, but a lot of the times (90%+), it’s diversity candidates. Unless you offer something very unique to the PE firms, they really have no reason to look at a candidate with your background? Your best chances are go directly to the PE firm as headhunters won’t give you looks. I would seriously re-evaluate what makes the most sense at this stage. You can still do it, but chances are slim so take that as you will. Nothing is impossible and you should always keep your head up, but also want you to be realistic on what makes sense and you definitely don’t want to be a 31-32 year old 1st year Associate.
1) Is my current plan of MBA --> Post-MBA Associate in IB --> PE viable? YES, BUT LOW CHANCES
2) Is there an alternative route? If so, what is it? NO ALTERNATIVE PATH UNLESS YOU WANT TO SWITCH AT THE HIGHEST LEVEL
3) Would MBA --> MBB --> PE work better at this point in life? (Even assuming a narrower range of PEfirms I'd be suited to) NO WORSE ODDS THAN IB
4) Is the desired PE play generally a pipe dream at this point? YES
I can’t speak for the the UK, but at least in the US, this is a possible but difficult path. Speaking from experience, myself as well as two other alumni from my school and a few friends from other schools have made this transition. Your best chances (from the profiles I have seen) is doing 1.5 years of banking post MBA and recruiting for off cycle after your stub period.
The biggest obstacle will be the age issue. You will need to communicate to firms that you are okay starting as an Associate at 31/32 or find a smaller firm that is willing to take a chance in you as a Sr. Associate.
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