From Valuations to PE/HF
Hello All,
How hard is the transition from a valuations roll, focused on DCF and LBO models, to PE/HF? Since valuations seems like a large part of the job I would think it would be a natural next step.
Hey there!
Transitioning from a valuations role to PE/HF can indeed be a natural next step, especially if you're already well-versed in DCF and LBO models. These are key tools in the PE/HF world, so you're off to a great start!
However, there are a few other factors to consider:
Deal Experience: While valuations provide a solid foundation, PE/HF roles often require direct deal experience. This includes sourcing deals, conducting due diligence, and managing portfolio companies.
Industry Knowledge: PE/HF firms often specialize in specific industries. Having a deep understanding of the industry dynamics, key players, and trends can be a significant advantage.
Networking: Breaking into PE/HF can be competitive. Building a strong network within the industry can significantly boost your chances.
Training: Consider taking part in some of the WSO Courses or the WSO Academy. They offer a range of resources, including the Networking Guide, Investment Banking Prep, and Private Equity interviews.
Remember, every monkey has to start somewhere. With the right preparation and mindset, you can make the leap. Good luck!
Sources: PE to HF Transition, https://www.wallstreetoasis.com/forum/investment-banking/modeling-in-hf-vs-pe-vs-ib?customgpt=1
Is this a portfolio valuations role? If so you’re not really building LBOs, right?
It’s possible to transition into a small family office but is tough without direct m&a/transaction experience
Where are you based? Not sure about the US, but in Asia and Europe typically someone of your profile would transition into IB first before moving to the buy-side. Big 4 valuations to IB is a pretty common move in Europe and Asia actually. PE and HF roles may be limited but I have seen secondary funds take Big 4 valuations folks occasionally
Thank you that is good to know, I am based in NYC.
I see, if you're based in NYC it might be a bit more difficult to go direct to PE. I would suggest recruiting for IB roles, and opportunistically look out for LMM PE and/or secondary funds. Some secondary funds actually value Big 4 valuations backgrounds a lot, so maybe explore that if you're interested in the PE secondary market
+1 to all of this. Your best route is IB, that's a bit tricky given the market right now so direct to secondaries is best. I wouldn't even bother with HF.
Valuation is helpful but the modeling is not up to direct PE level and you're missing a lot of the more holistic transaction experience you build in IB
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