I'm in MF PE. How do I get to LO? (thru HF?)

I just finished my first year in MF PE as an analyst. I love long-term investing but I hate process work and I'm risk-averse, so I would like to end up at a top LO at some point.

10 years ago, the transition would be very clear: do my 4 years in PE, go to B-school, then recruit for LO analyst roles from there. However, MF PE b-school placement has gotten much tougher given the growth in PE junior roles and shifts in adcom criteria (this has been discussed a lot on this forum). My firm used to be a lock at H/S, now it's <50% placement. Also, b-school is expensive and I don't think I would learn much.

Given all this, is b-school still the optimal route? Or should I move to a hedge fund, pick up some sector experience, then make the move to LO analyst with HSD years of experience? Or maybe it's possible to move from PE directly to an analyst-track role at LO?

13 Comments
 

All of the big LOs still recruit from Wharton as well which should be relatively straightforward to get into if you’re a MF PE analyst. I would recommend going that route if you want to end up at a Capital, D&C, Wellington, etc. The smaller LOs probably will be okay without an MBA but feels like it’s case by case and they don’t have openings every year.

 

Higher level question. Do you really want to go to an LO given the headwinds with fees/passive? 
 

There will probably be demand for good LO products but you will be fighting a big tide generally without the benefit of multiple level growth in comp in PE/HF (not saying that’s easy or guaranteed either). 

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
 
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Have you ever heard about a Tier 1 LO analyst/pm complaining about getting fired or having a small bonus because of passive fees headwind?

People are still really happy to be working at Capital/Wellington/TRowe and would kill to stay.

We had an opening for an analyst role recently, 8 of the 12 last round candidates were pod analysts.

I’m currently at one of them and I can tell you the real losers of this are back/middle office persons and very old partners that don’t bring value anymore.

We are talking about very high paying jobs with very few seats. The impact of the headwind is not very clear for insiders given the magnitude of the pay.

It is the same when people talk about a pod bubble. Even if we are at peak, the downside won’t be felt for actual employees.

 

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