Do consultants in PE ever catch up to bankers?
Do consultants who join UMM/MF PE firms ever catch up to the bankers in terms of knowledge of finance, accounting, modeling, etc? For example, Bain Capital asks no technical questions in their interviews (might explain their returns lol), so most consultants don't come in with much or any finance knowledge. Does that gap ever close compared to IB or do consultants in PE tend to focus on different things than bankers?
Also curious. I did consulting (Big4 type) out of college before lateraling to banking. I enjoy banking much more and think the skill set / learning / development afforded from banking is much better than consulting.
Can you share more about why you prefer banking and are learning more there?
Worked at a shop that hired both. Short answer is yes, they can absolutely catch up, and I think depending on the style of investing you do there's a case to be made consultants have better long-term skillsets (I was not a consultant, fwiw). It definitely takes a bit of focused effort and if you're an ex-consultant you need to work hard your first 1-2 years to get technical reps and convince people you can handle technical work, but it's absolutely doable. Check the team pages of mid and senior professionals at a lot of the top firms that hire from both backgrounds; many will be ex-consultants.
Being an ex-banker makes the first year of PE easier as most of what you're doing is modeling/technical analysis; if you're at a place that is very focused on nitty-gritty modeling, structuring across the cap stack, value orientation, etc. then that skillset may continue to be more relevant. If instead you're at a place that prioritizes market structure and allocating capital bets by market tailwinds ("screw it, let's throw some capital at this trend, there's 3-4 names that should all gain share over time") or you're at a place that's very hands-on in the portfolio without a big internal portfolio operations team, then I think the mindset of a consultant can be quite helpful over the long arc of your career.
At the end of the day, most PE roles require you to use both banker and consultant skillsets, so while one may be more helpful right out of the gates you need to be able to speak both languages fluently.
I was an ex-consultant that landed at a very technical, value-heavy place. Personally, I didn't find the financial modeling to be the biggest gap (that takes a few months of focused effort, especially if you were a consultant that had a lot of quantitative / financial workstreams). The areas where I found myself very behind on were deal structuring, understanding of credit markets / key terms, and overall instinct for valuation - in other words, the transaction-focused aspects of the PE role. It was quite the switch to go from thinking primarily about industries and tailwinds to deal-focused analysis, but it's also very possible that I was made the better for it.
It all comes down to your desire to learn and the application that you put into it as an associate. If you got the job, then I don't have any doubts that you possess both. Just ask your team what's important to the firm's investing style and get really good at it for a couple years, then see if it's still the right fit for you.
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