IB analyst or PE analyst program
I am wondering about people's views on doing the analyst years at a large PE fund, vs. at one of the top BBs, if the end goal is PE. I have an analyst position offer at the fund (that I would ultimately like to come back to as an associate, if I were to do my analyst years in banking first), but can also choose to join the bank with 2024 analyst class - what do you see are some pros and cons with taking the banking offer rather than the PE offer, and vice versa? Important to keep in mind: both are analyst offers, my end goal is PE, I would like to go to the fund after doing banking too, but also wouldn't mind joining now as an analyst. One of my worries is that people will say "he never did FT banking", and that I will miss out on the "banking experience", before going over to buy-side. What is your guys' views? Thanks.
Based on the most helpful WSO content, here are some pros and cons of taking a megafund analyst role (e.g., KKR, Bain Cap) vs. an offer from a bulge-bracket bank:
Pros of PE Analyst Role: 1. You get to learn PE specific skills early on in your career. 2. You're almost guaranteed return offers.
Cons of PE Analyst Role: 1. PE analysts often struggle when they transition to the associate role. 2. You might have to work for 3 years to become an associate at the fund.
Pros of Banking Analyst Role: 1. You get a broader experience, with highly defined roles. 2. You get to run a process, taking on the bulk of work. 3. You might only need to work for 18-24 months to become an associate.
Cons of Banking Analyst Role: 1. The work can be very standardized, specialized, and technical. 2. You might miss out on learning PE specific skills early on.
In the end, it depends on your specific goals and what you value more in your career. Both paths have their own merits and can lead to a successful career in PE.
Sources: Am I missing something about buyside exits?, PE analyst at a megafund vs. banking/consulting, Why is WSO anti-buyside out of undergrad?, https://www.wallstreetoasis.com/forum/private-equity/going-from-mm-investment-bank-to-mega-fund?customgpt=1, https://www.wallstreetoasis.com/forum/investment-banking/goldmans-new-policy-for-investment-banking-analysts-3-reasons-why-it-wont?customgpt=1
My personal opinion is to take the IB analyst job at the BB. The skills you learn will be very transferrable and better learning opportunity. Depending on the shop, I have seen a lot of PE analyst roles that are more BD focused with some bespoke due diligence analysis tasks incorporated. It's just a different animal and you may not get the excel / ppt reps.
Also the relationships you build in your larger BB analyst class may ripple across your career and potentially be invaluable in the (small) high finance circle you will be joining.
Thanks for the reply - completely agree with the relationship aspect of the BB analyst class, I am not sure about the learning and skills aspect of it - I would presume, in a perfect world, that working in PE for 1 extra year would be more beneficial than working in banking, for PE purposes, given it will give more "relevant" experience, compared to some repetitive and mindless tasks one can get in banking - nonetheless I think PE also houses these tasks, and even MORE admin work than banking. Regarding the BD nature of it, yeah, I think it varies from firm to firm but there is a risk there will be a lot of BD and DD tasks, deep diving into (seemingly) useless details, etc...
If you want to work at Fund A as an associate, the most sure way to do that is by being an analyst at Fund A. This honestly doesn't seem like hard question as you know you want to work at this fund.
If you don't know which one you want to do longterm, then do your diligence and research the PE analyst role, there is a large degree of difference between a PE firm with a built out analyst program or a fund that just wants to capture talent early.
Strongly agree with this. It’s ridiculous that people on this forum will sometimes say to go do banking and hope for an associate offer at a firm you have an analyst offer at. Your chances are much higher at being promoted to associate at that firm than trying to be hired in from a banking role at 95% of large cap PE firms. Starting out in BB banking is an amazing spot to get as well, but of course you’re less likely to get into a specific PE firm from there.
Really agree with this, chances are much lower if you're trying to break in from banking rather than entering and staying in PE - but you might also have more options open after having done a few years at the BB, so really it might go both ways. I can't help but feel like I might miss out on other opportunities if I were to take the PE analyst role instead of the banking analyst position.. Classic FOMO
Would go straight to PE. My friend is an analyst at a MF, we’re on the opposite ends of a deal. Since he’s the client, seniors will still bend over on DD request when he sends them across. Difference is would you rather be fucked or do the fucking
You do forget your friend has his own masters.
Just replying back because I was hit with MS? I prefaced my reply saying "my personal opinion" haha. Look I have seen folks who aspire to get associate at their PE shop and get fucked over for one reason or another (politics, fund dynamics etc.). Again my view is that you can develop stronger, broader technical skills at a BB analyst program. From my personal experience (i.e. people that I know), there are folks who joined as a PE analyst at the fund for exactly the same reasons as OP, got strung along, didn't get promoted and are in a very tight spot right now. PE cycles and IB recruiting cycles go up and down so who knows what opportunities will be available two years from now, but again that's just my take seeing my PE analyst friends grind it out at a lower comp and having limited moves after putting all their chips in trying to get in as an associate and it not working out.
People on this forum will always find reasons to throw MS =) I completely understand your point, and also agree especially on the point that I will be in a situation where I've put all my eggs in one basket early on in my career, narrowing down my choices down the road.. however, if I really like the culture and the work at the fund, I will have made the correct choice - but then again - I might have the opportunity to join them later after having done banking. Might be worth it to just await more opportunities and at the same time take on the risk of competing for one of few PE Aso roles open for all the bankers out there...
More PE Analyst programs thank you think are not well structured / thought-out. This is because, as naive as it may sounds, many firms use them as a cheaper way to buy Associate-level work (and are surprised when that’s not what is delivered by their graduate hires…). Get 2 years in a good bank or consultancy firm, get training, then enter PE with a better understanding of how the business world works. It will pay dividends in the medium term already.
Thoughts on MF PE analyst programs at places like Bain Cap, BX, and KKR?
If you get an offer at your absolute dream fund, take it. If you get an offer that is PE and it would be nice to be in PE... I would not. There is value to the structured, high-reps environment of banking. PE analysts get fewer reps and less institutionalized training. Hence places paring back or even eliminating analyst programs - the associates from banking were coming in and hitting the ground faster. Not a dig at those shops, but you're comparing a 1 or 2 analyst program to places that train 150+ every year.
Fair points - thanks for your input. Definitely a reason as to why fewer months in banking will get you an associate position at funds whereas you have to be an analyst 2-3 years at some funds with analyst programs to become an associate.
Currently an analyst at a MF and dealt with this decision myself. My logic (and what more senior people to me recommended) is as follows:
- If you've got a MF offer it's likely an established analyst program that gives you great reps and has a good reputation with HHs, so your exits are good
- If you've got an offer from a recognized UMM fund with a history of A2A promotions and is one you like the strategy of you are also likely good
- If you have an offer from a MM fund that has a less established program, not to mention a LMM fund, you gotta consider the IB offer because it would both guarantee you credibility in the long term AND give you a better shot at recruiting to better funds 2+ years later
This of course varies from fund to fund and I'm sure there's plenty of quality MM funds with established analyst programs. But you can easily get screwed going to the buyside early and lose the opportunity to effectively move up market if you start in a place you don't want to or won't be able to stay at in a couple years. Plus you will lag behind your banking peers in skillset unless you have that MF / UMM analyst experience that gets you working on models (which in most places isn't the case). So think carefully as it's never a bad thing to take a long term view even if in the short term the work might not sound as interesting.
This is very helpful, thanks a lot for your valuable input having been in the same situation yourself!
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