How does an MBA work in a PE career?
I've seen that many PE funds have a 2-3 year associate program, culminating in the associates going to business school. I have 4 questions:
1) What is the value of this?
2) After graduation, do the associates get promoted to VP at the same fund?
3) Are the graduates now out of a job, and have to search for another one upon graduation?
4) Could I bypass this step, and proceed straight to VP?
The search is your friend... but quickly
1) What is the value of this?
Depends on who you ask. Some say it has no value and if anything negative value given the opportunity cost. Some say it has a ton of value in terms of the network you build. Some like the opportunity to party and take a 2 year hiatus from work. Some probably like the classes.
For most 2 and out associates, it's just the next step on a known path from banking to PE to MBA. Depending on your situation you could choose to go or not to go.
2) After graduation, do the associates get promoted to VP at the same fund?
That's part of the discussion before you leave. Now a days, if you do well through the first few years, PE firms realize there is less value to an MBA and more are likely to just promote you directly after a Senior Associate year or two. Some will want you to go get your MBA and come back, but that would be discussed before going. If a firm 2 and outs you, it's unlikely they'll take you back post-MBA, but I'm sure it's happened.
3) Are the graduates now out of a job, and have to search for another one upon graduation?
If you have a discussion with your firm and they're not sponsoring you to come back, then yea, you're out of a job and have to re-recruit. It's a pretty tough path, even from H/S.
4) Could I bypass this step, and proceed straight to VP?
Sure, do a good job for the first few years or if you do get 2 and outed, look to lateral as a Senior Associate at another shop.
Thanks for the detailed and well thought-out response. Seeing that you are a PE professional, did you/are you on the MBA route, or are you an A>VP promote? Also, which type of fund is most common? A>VP or 2 and out?
Harvey nailed it. Would add that certain firms have a track record of promotion without business school, while others are more strictly a 2 year program.
Most megafunds are two year programs. I believe Blackstone, TPG, Bain, Advent, Carlyle and H&F are all strictly 2 years. Others, such as Apollo, Silver Lake, KKR, and LGP consistently promote without business school.
If you’re a strong candidate on paper, you can tell the recruiters that you would prefer roles with a path to VP promotion. The caveat is that will narrow your universe of opportunities meaningfully.
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