Going from MM Investment Bank to Mega-Fund

I am currently a first year analyst at a mid-tier middle-market bank (William Blair, Piper Jaffray, Baird, etc.) and went to a non-target state school for undergrad. My goal/dream is to work for TPG in the next 10 years and was wondering if anyone had any advice on how to get there. Do I need to move laterally to a BB or can I work for a smaller fund for a couple years and then make my move? Do I need to get my MBA first? Is that big of a jump even possible?

I am willing to do just about anything to get there. Any advice is much appreciated.


I can share my experience as I did the move from a Tier 1 boutique to a mega fund. Also to pre-empt any question, I went to this top boutique because I liked the culture and the team. I also had two offers from top BB, but didn't like the teams.

To give you a bit of background, I graduated from a top school in Europe, did good internships, and started straight away in M&A in London. Unlike some of my peers, I wouldn't consider myself as particularly gifted or smart, and as you can probably tell English is not my mother tongue. Anyway, in this industry without hard work and a bit of luck, it is hard to be successful.

It is true that a few funds did not look at my profile as they only hire from GS/ MS/ JP, but I had a huge amount of deals on my CV and was able to talk about them extremely well. Some of my colleagues were always wondering why I was always keen to get staffed on new projects and work way more than them... I would be lying if I said it was always easy, but ultimately I developed strong technical skills, a very good understanding of my space and a much better business acumen than my peers. Exactly what the partners at the mega fund liked.

If joining a mega fund is your real objective, you need to be obsessed with the idea and work as hard as you can to be successful - don't neglect your private life, your GF/BF and your friends... to be successful you also need to be surrounded by the right people and have a life outside of work. It does not matter if it takes more time than for other people, what truly matters is to do what makes you happy both professionally and personally.

In Europe, networking is not as important as in the US, but meeting investors and people who work in those mega and MM funds will help you get a better sense of what people do on a daily basis. When you meet them, don't beg for a job, listen to what they are willing to share with you and try to understand and progressively adopt the investor mindset.

Hope this helps Camondo

Best Response

Camondo's story is impressive. However, ScoobyDoo12, do note that private equity recruiting in Europe is a fairly different animal than here in the States.

For the best chance at making your dream real, you have two high-probability paths.

(i) Lateral 6-18 months into your time at your current bank, then recruit out of that analyst program for buy-side jobs.

(ii) Recruit for buy-side opportunities out of your current banking analyst program and accept the best you get, all the while dedicating yourself very seriously to building out (a) your skill-set as an investor and (b) your profile for business school applications so you fare the best possible in that process, then recruit out of school for private equity.

Let's unpack them.

In the first, you are trying to get yourself as 'on model' as possible from the start. By getting into a better bank, you're able to set up your buy-side path to be the strongest it can be from the start.

If you lateral to a bulge bracket or elite boutique bank, you get to recruit for all the megafunds and prominent middle market shops just like rest of the herd of competitive banking analysts do.

If you succeed at breaking into the megafund ranks, congrats, you're done. Except you're not, because all of them except Apollo offer only a two-year contract and push you out to get an MBA. Once you're in b-school, you have to re-recruit all over again for post-MBA ("partner-track") positions.

Shitty thing now, though, is that there are fewer seats in private equity than there are people who entered school from a private equity role. This is easily found in the data from every school's career placement report. The percentage of the incoming class from venture capital/private equity (that's usually how it's lumped) is always 3-6% higher than that same class's career placement report at the 12-month mark after graduation.

(e.g. The HBS 2017 cohort will have its numbers published in about three months, the one-year anniversary of them graduating. The school will list that "97% of the class has found full-time employment" and then break down the information on geography, salary, signing bonus, industry, role, and other key factors.)

This is a brutal game of musical chairs. The megafunds obviously take their pick of the litter. It's a narrow group. Partner-track roles are few and far between, and the biggest shops already have relatively crowded ranks of guys with 3.8+ out of Ivy/comparable schools who did analyst stints at Goldman or Morgan Stanley then an associate role at a big, name-brand fund (maybe even the same one they're at now) before going to Harvard or Stanford and joining the fund as a 'Senior Associate' or Vice Principal.

The upper middle market funds have no problem at all getting ex-Carlyle, ex-Warburg, ex-megafund people coming out of Harvard or any other MBA business schools">M7 MBA program, because for the person who's six/seven/eight years into their career, a seat at a multibillion-dollar private equity fund that comes with immediate (or clear visibility into) shared economics within the carry pool is the dream come true.

The same phenomenon continues for the middle market and lower middle market funds. They often hire people who were at larger funds before school.

The picture I'm trying to paint is that since there's more supply than demand, even for the most ultimately qualified candidates, a squeeze-down effect exists where it's pretty common to see people going 'downstream' to get the seat they want. Sure, there are anomalies like a guy who was at Madison Dearborn before b-school and got KKR afterward or the girl who went from Berkshire to HBS to Blackstone, but overall it's a tough market.

In the second, you're betting that you're better off getting earlier into a role where you can hone your skills as an investor, work as long as you need to to feel confident in your package as an investment professional, then either (a) look to school as a fulcrum point to swing as far 'upstream' as you can or (b) ignore school and forgo it altogether to just look for lateral opportunities as a very experienced hire.

This would mean you stay at your current bank for as long as necessary until you feel you've secured an exit to a shop where you can really roll your sleeves up and learn.

Perhaps that means you do a third year as an analyst because you need to recruit on-cycle as a second-year (for opportunities starting 18 months out) or as a third-year for ad-hoc / that summer start / immediate start roles.

You stay at that shop for 2-4 years (a lot of the middle market or lower middle market guys are not as structured and won't necessarily push you out).

Maybe you see if you can lateral to a better shop. Sometimes headhunters for the bigger funds will include people currently in private equity for immediate start searches they're running for their big clients.

Maybe you're granted some freedom on sourcing earlier than other guys and you're able to get something through I.C. Maybe you find something you have enough conviction in that you break off to run the deal independently as a fundless sponsor.

Who knows. The ultimate point is that you spend the 3rd-10th year of your career really developing as an investor and hopefully building an attributable track record. If you have that, it isn't hard at all to get a meeting with senior people at bigger shops to 'talk shop' (dealflow, industry trends, service provider recommendations, etc.) where you can then float the idea of "working together."

Simultaneously, since you're adopting a longer-term horizon, you can be really methodical about making yourself a 10/10 on every dimension a business school adcom is going to evaluate you on.

This means you can take literally two years to put 300 hours into the GMAT. That sounds like it sucks, but if you did three hours every weekend for two years straight, not only is it a really doable time commitment but it'd be really hard to walk out of it without getting a 760+ (99th percentile).

You can also join the junior board of one or two nonprofits, then figure out how to unlock some real achievements that actually impact the organization and look like super strong bullet points on your resume. (e.g. Raise over $100,000 from your network for them, launch some kind of brand-new initiative and build out a team of eight volunteers from your network to oversee it, etc.) You can even start your own.

You can shore up any weaknesses in your undergraduate academic profile by taking post-graduate coursework or executive education classes. Every school lets working professionals take single classes a la carte, you just pay whatever the per-credit-hour cost is. Got a B- on statistics as a sophomore? Cool, pay $4,300 and take statistics again from a better-branded school.

You can do this for any subject you want to convince the adcom you aren't weak in. Applicants often do this for quantitative courses they didn't perform strongly in during undergrad, then submit an informal post-bacc transcript (meaning it wasn't a formal degree-granting program) with A's in however many classes they chose to take. NYU is the king of this, for the record.

Returning to the professional front, it would be hard to follow the strategy I just outlined to get into TPG's flagship buyout strategy if you weren't working on $500m+ TEV deals, but they are a massive platform with a lot of different vehicles to the point that they're truly a home for just about any deal. If you're wedded specifically to that fund, get familiar with their structure and steer yourself over the next decade based on how you can slot into it well. If you're looking just for a megafund, there's half a dozen others who work just as well.


If I'm you, I follow the latter path.

If you want to hedge, see whether you're able to do a banking lateral within the next six months. If it works out, hey, try the first path. Just be aware that you can only do b-school once, and if you get onto 'the track' where you recruited from a strong banking program into a strong private equity gig that was explicitly only a two-year commitment, you may wind up in a tough spot where you're deciding blind whether or not to fire your one single b-school bullet.

I think it's way harder to control the vagaries of timing than to immerse yourself in your craft and master it. If you are a good investor, someone will always want to talk to you. If you're really good (you did a deal on a fundless sponsor model that made somebody a lot of money), you will have no shortage of people willing to provide capital or dealflow to you.

Good luck.

I am permanently behind on PMs, it's not personal.

Thanks as always. Suppose a top PE guy at HBS can choose between i) going back on a partner track in PE ii) joining a Baupost/Elliott etc. Which is the most coveted or is it not possible to generalize?


In context of which is more preferable if the same person is picking between the two, I don't think you can make a generalization. It's too dependent on the individual.

More importantly, you wouldn't need to generalize this, because the guy who Baupost or Elliot or Greenlight or Bridger is talking to has absolutely zero trouble picking up the phone and moving over to megafund PE if or when he decides he wants to taste that flavor for awhile.

There is way less supply of the elite hedge fund roles though, so that narrowness of opportunity creates a lot of real ("I know I have the profile to have a shot at that so I'm going to make a real run at it") and a lot of soft ("wow, I wish I could do that, the guy that gets it is a real rockstar") demand.

In short, the PE role truly is a golden ticket for the chosen few who can get it, but the hedge fund role is considered more of a diamond ticket, if that makes sense.

I am permanently behind on PMs, it's not personal.

Because guys walking out of b-school with a prior background of successively elite placements (Wharton to Evercore to KKR to HBS) often think with a bias towards their own ability to beat the odds.

("I won't underperform, I'll do well with my equity analysis" / "the asset class underperformance is cyclical, not structural" / "they'll like me enough they won't give me too short of a runway to prove myself" / and the like.)

It's understandable. If you've always experienced the better outcome at each inflection point along the decision tree, why wouldn't you keep rolling the dice?

What I'm trying to say is that the guy who has every reason to think he's the shit is definitely going to punch the ticket that Bridger or White Elm or Greenlight extends to him, if only for the fact that so few of those tickets exist. I think you underestimate the psychological factor of being the only one to get something out of several hundred other type-A gunners all chasing the shiniest trinket. The fact that it's a one-of-one opportunity (of maybe a dozen of its type) really factors in.

I am describing my view on how a lot of guys coming out of HBS treat it, not my personal stance.

I am permanently behind on PMs, it's not personal.
Would you say majority of people in banking (particularly in MM) are targeting PE?
I have no personal experience working in middle market banking so I can't speak specifically to that, but overall it seems like at least half of the total banking class each year is looking at private equity as their primary exit option.

It's a predictable process. (You have a fairly accurate sense of what kind of opportunities you'll have access to based on your school, grades, and bank. You know what you're going to face in interviews.) For someone who's looking for a good risk-adjusted outcome, it's pretty attractive, even without complete conviction it's the truly 'best' next step for them to pursue.

From your perspective, would you say people that you've seen commit fully to the two strategies/paths you listed eventually make it to at least some sort of fund or buy-side role through pure endurance/persistence.
I can't really comment on that at all. I will say that people tend to end up largely where they belong. If you're truly smart, competent (quantitatively and qualitatively), and willing to put in the work, over time you will end up in the outcome "band" you belong in.

I can't take credit for this idea. Some other user on here described it well. Long story short, you can't guarantee that you'll get to be partner at KKR, but if you deserve a senior role at a good private equity shop, it'll happen for you over time. If the best you can get is a senior corpfin analyst (not a manager), well, that's where you're going to end up and stagnate.

If you have what it takes (and that includes grit, as Angela Duckworth has researched so powerfully), you will get successively closer to what you want.

I am permanently behind on PMs, it's not personal.

Thanks, that's really kind of you. I've seen a number of yours as well and think very favorably of them too.

I have made it easier on myself by putting a really strong voice-to-text protocol to work, so instead of the half hour it would take me to bang something serious out a couple years back, it's now five minutes and then some minor editing.

I am permanently behind on PMs, it's not personal.

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