IB/PE Training for LO
Hi all,
I am a rising senior fortunate enough to be deciding between going to an IB that is considered to be a strong group here on WSO from an exits/technical learning perspective, and an offer to a well-respected long only fund which I worked at previously and at which I really enjoyed my experience.
I was wondering for those who now work in publics and who did so after a standard 2 year IB/PE track, how much would you say the “training” in IB/PE helped you in your job? Are you more “technical” than your peers who didn’t go through this track, and relatedly, a better investor?
I am primarily focused on whether jumping straight into publics would make me less competent from a technical perspective, and relatedly whether the “technicals” learned in IB/PE is even particularly transferrable/relevant on the job in publics. I will not be getting formal technical “training” at the long-only, while in IB there will be 1.5 months of general and group-specific training to begin with. Basically, I'm worried on how much missing the supposed "training" you gain at IB/PE will make a difference.
As a side note, I am not particularly interested in IB/PE longer term, but would be willing to do the 2 years depending on the training point above (if relevant).
Thank you!
Based on the most helpful WSO content, here's what you need to know about the training differences between IB/PE and a long-only fund:
Training in IB/PE:
Technical Skills: Investment Banking (IB) and Private Equity (PE) training programs are known for their rigorous technical training. This includes:
Structured Training Programs: Typically, IB programs offer 1.5 months of general and group-specific training at the beginning. This structured approach ensures a solid foundation in technical skills.
Exit Opportunities: The technical skills and experience gained in IB/PE are highly valued and can open doors to various career paths, including hedge funds, corporate finance, and more.
Long-Only Fund:
Considerations:
Conclusion:
If technical training and a strong foundation in financial modeling and valuation are important to you, the IB/PE route may be beneficial. However, if you are more focused on public markets and enjoyed your experience at the long-only fund, it may be worth considering that path, even if it means less formal technical training.
For further insights, you might want to explore more threads on WSO related to career transitions and training experiences in both fields.
Sources: Public Finance IB to PE?, Public Finance IB -> Corporate IB, IB Training v. PE Training, https://www.wallstreetoasis.com/forum/investment-banking/public-finance-into-investment-banking?customgpt=1, People in IB: What is your socioeconomic upbringing and how did you initially gain interest in IB?
Congrats! Having experienced all three, I would say the benefit is only marginal as 70%+ of your work in IB will be more process/deal quarterbacking (and turning comments) which are helpful for learning how to be a diligent employee but not at all for being an investor. I would say PE is a better training ground as the modeling/diligence is much more intensive and your bosses are real investors so have more to teach in that department. You also get to see the operating side (board meetings especially).
However time and time again, a lot of ex-PE folks struggle to acclimate to the public markets. Only a few of the frameworks translate directly, and the vast majority are learned on the job. The reasons to go this route are 1) more pay (though not on a per-hour basis) 2) presumably live in NYC while young 3) close bonds with your analyst class who you can grow careers with 4) prevent you from ever having the "what if" syndrome that I felt like easily fall into 6) learn the deal/M&A skillset which translates well to corp dev/finance roles. However if you do go this route you risk 1) health issues from working so hard 2) not doing what it sounds like you really want to do 3) having to re-recruit in an industry where seats are limited.
I personally find the LO route to be much better that IB/PE for satisfying intellectual curiosity with incredible autonomy and much better WLB. Cultures are also much less toxic and pay is fantastic over the long run. No regrets making this switch.
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