Career Advice - Houston Private Equity

Hey y'all,

I am a Senior at The University of Texas at Austin, and I am going through off-cycle recruiting for PE and IB in Houston.
Though the most common path to PE is through IB, with well over 90% choosing that path, are my chances of landing a good role at a large PE firm (located in Houston) high if I decide to work at an LMM PE shop right after graduation?

Would you all recommend that I stick to the traditional route of IB to PE?

Also, is pay all that different between Houston PE firms (analyst and associate)

Comments (11)

May 12, 2022 - 2:35am
Monkiii, what's your opinion? Comment below:

Most PE firms in Houston are energy focused and I think energy would be pretty challenging to enter at the PE level just because the learning curve is quite steep. I would personally recommend IB regardless just for the more structured learning experience and optionality to figure out what kind of fund you'd like most, but for energy/Houston I would be very hesitant to go straight into PR

May 12, 2022 - 3:34am
HoustonChimp, what's your opinion? Comment below:

I know Houston deal flow is primarily Oil and Gas but would it be better to go for an IB job or a LMM PE position with the preferred outcome being that I end up at a large PE firm?

One would assume the IB route since 95% of people in PE were in IB at one point, but I would also imagine that getting hands-on experience at a PE firm, albeit a smaller firm, would have better opportunities than going into IB from the start.

Assuming I already have an IB and (LMM) PE position lined up, which should I take if my goal is to work at a large PE Fund out of Houston? 

Most Helpful
  • Associate 3 in IB-M&A
May 12, 2022 - 8:37am

It's pretty difficult to climb upstream from a LMM PE to MF PE (not many in Houston these days) or even UMM PE - not an easy jump at the 2 year mark like you're thinking, will take a strong network and potentially even a few laterals.

The reason for this is simply that IB is a verified, known training ground, and PE firms know that the associates they're hiring will have a certain skillset. Even if you can talk the talk from a LMM PE, they still don't have years of prior associates coming from your firm where they know what your training and experience looks like. Additionally, the headhunters only look for IB analysts, and get an email list from the class above. You would just never hear about these opportunities from a LMM because the recruiters won't be looking for you.

LMM and UMM PE are also extraordinarily different markets / strategies, there is not as much crossover as you might think.

Overall there's a reason most people choose IB. I only see people going to very small PE firms if they strike out with IB recruiting, or are super against the IB workload/want to stay in LMM/MM. IB is the best path to any large PE spot

May 12, 2022 - 1:47pm
HoustonChimp, what's your opinion? Comment below:

I am not looking to leave Houston anytime soon, which I know will limit my prospects, but I also do not want to ruin my chances completely. Houston is already a lower-tier city if I ever want to move elsewhere.

I guess the question is: How small of a PE firm is too small? Also, how much would be an acceptable total compensation for an IB analyst in Houston and a PE analyst in Houston?

I only ask because I am interviewing with a firm offering "compensation of $85K per year starting pay". I would figure they could do better, especially if it already includes a "bonus." 

Note: The firm has over $500M AUM and a decent following as far as Houston PE goes. Also, deals are mostly Growth Equity and recapitalization (common in O&G PE either way.) On top of that, if I join, I would be the firm's first analyst.

I know that Oil and Gas has had plenty of deal flow since last year alone.

  • Associate 3 in IB-M&A
May 12, 2022 - 2:01pm

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