Hey guys need some insight here: so I’m a second year analyst at a BB power group at the moment but have the opportunity to move internally to another group. They're just starting out a junior team at this office and so I’d work directly with a super lean vertical and closely with an MD.
Thing is it’s in energy, which I fear may pigeonhole me further, being that I was already at a niche industry group. If I’m looking at PE roles outside of these industries at the end of my two years, say industrials/consumer/generalist, would I be further pigeonholing myself here? Or does it not make a difference since I'm still in my "two-year analyst stint"?
Thanks guys - appreciate any insight.
I speak from experience when I say this- I highly recommend AGAINST going to energy. The pigeonholing aspect is real. I think the other people who’ve commented above are trying to be nice about this but let me state this in no unclear terms- avoid energy/real estate/FIG like the plague if you want to go to a generalist PE fund. Your team may be super lean and you may work closely/directly with an MD, but honestly that won’t matter to the PE fund you’re going to or the recruiter (aka gatekeeper) you’re talking to. I hope you take my advice seriously and stay put where you are.
The only situation I’d recommend making this move in would be if you were going from a no-name shop to a BB but you don’t have that problem and there’s not much upside to this (despite what’s being pitched to you).
why avoid energy/real estate/ and fig ?
Because you get pigeonholed, I.e. the topic of this post
It is real. In the end, headhunters and other funds just want to put you in a box. If you are the RE guy, you get put in the RE box. If you are the FIG guy, you get put in the FIG box. In the end, it is ridiculous because your first job should not determine the rest of your career, and it's not like an analyst from FIG is not capable of doing a generalist PE job. But there are just too many candidates to choose from so it's their way to whittle down candidates to a more manageable level.
Here's my quick 2 cents.
Not all energy is the same. Try to figure out where your group falls in the energy universe - energy is a very broad term. Few groups cover it all and most focus on one or two subsegments.
E&P, A&D of assets is very niche. You learn a specific skill set that doesn't really transfer to other industries (Well economics, NAV, etc.). The modeling, lingo, market drivers, etc. are all different and unique. 3+ years in this type of work and you're stuck. Avoid if you're worried about being pigeonholed.
Oilfield services, think HAL, SLB, etc. are a bit different. They provide products and services to E&P customers. They do not own any O&G assets and their business model is not that different from other B2B companies. Obviously, market drivers are unique because most of their revenue is generated from E&P capex and opex, so highly levered to oil price and current economics of drilling and completing O&G wells. I have seen people successfully lateral out of this segment of the energy market to generalist funds with little to no exposure to energy. Not saying it's the easiest thing in the world, but you can definitely convince them that your skill set is transferable.
Not as familiar with midstream and downstream. Initial thoughts are that midstream is pretty unique and I could see being pigeonholed there. Lot of MLPs and other structures unique to the space. Probably less niche in downstream if you're on the services side.