PE Associate vs IB Associate Horsepower
Was debating this with a friend recently. If you took a PE associate 1 year into the gig at a top 50 shop (assumes 2yr banking program at top 15 bank) vs an A2A associate 1 year into the associate role at a top 10 bank, who has the stronger toolkit? I would bet a fair sum on PE given both the sheer responsibility assigned (firm dependent) and the analysis brought along with the job. Nothing to discount the banking job, but diligence trackers, football fields, and reps & warranties/indemnity documents start looking the same after 2-3 deals. My friend thinks A2A IB associate punishes PE. What are thoughts?
Obv there's talent variability with each role but I think an above-average PE associate would win no-contest
Not even close outcome -> IBD typically optimizes for breadth (# of deals working on) which reduces relative ability to get into the weeds on deal knowledge. Additionally, banker typically don't underwrite / forecast model assumptions and either defer to WallST consensus or management forecast.
Banks are middle man facilitators while PE owns transaction outcome leading to materially different work diligence standards
I mean, it's not a contest, right? PE Associate clears by a mile. 2 years of bitch work + 1 year of actual work that applies what you did for 2 years vs. some dude/chick who was in sales/marketing prior to their MBA.
To be fair OP is asking about A2As not post-MBA associates.
Not that this argument really matters but I still think it's the PE associate though, since the incremental year in an investing seat adds a lot more than doing effectively the same IB analyst work for another year (sure you guide processes more and manage analysts, but it's less of a different experience).
Ah oops, missed that. Agreed regardless. You're just doing the same general work as an A2A vs. a PE associate who gets to apply the skills accumulated from IB.
What an interesting conversation between you and your friend! Have you touched grass recently?
please seek the warm embrace of a woman
thx
It depends on the group for bank, but this is 99.9% of the time going to the PE ASO. It’s just a different job, and a job in which you have to do a lot more actual thinking and analysis. The best Rx and M&A associates (80+ percentile) on the street are probably going to beat some MM PE people depending on what the test is.
As a freshly minted A2A, the PE assoc 1’s are actually a class below me as my bank has a third year analyst program. There is quite a variance in skills and abilities from what I’ve seen working across the table from them. Some of them are more like a glorified banking analyst who has simply just traded their associate in IB for their VP in PE. They’re doing the third party diligence tracker non-stop, and mindlessly sending their team’s questions to us for answering. Others are actually thoughtful and speak up during calls and add value to their team. TL:DR, some PE associates are brain dead, some are not. Similarly, some A2As are brain dead, some are not. I don’t think you can really do a generalized comparison here, it depends on the individual.
Additionally, responsibility assigned really depends for A2As as well. Some A2As are fully running processes, and other A2As are just coasting. Seems like most PE assoc 1 are just executing on whatever their VP says as they are too fresh to really be driving a process independently
If your saying “who has a more varied toolkit”, obviously the PE assoc wins. They have literally just done the lowest role for both IB and PE and therefore have a more varied toolkit. IB associate is responsible for leading analysts, which I suppose is a part of a toolkit
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