Is BCG a viable path to Private Equity?

Yes, MBB is a viable path to private equity. There are more private equity associate hires with a prior role as a banking analyst than an associate consultant, but it isn't a rare path. Some firms are more friendly to consultants than others; this tends to be because the firm's strategy is more operationally-focused or its founders had a background in consulting themselves.

BCG places into private equity the least out of the MBB firms. I was surprised to notice this all the way back in undergrad when assessing my internship options, as an analyst talking to peers who were recruiting for buy-side roles from both banking and consulting, and over the subsequent years as my career has unfolded.

I don't believe that's due to any kind of bias, for what it's worth. It seems to be self-selective. Bain has a very strong private equity due diligence practice, for example, and many young professionals interested in private equity as a long-term career path are able to identify that group as the place they want to start. Does that mean the same person couldn't get to private equity out of BCG? No.

What I would encourage you to do is recruit for McKinsey and Bain after finishing your internship. If you were good enough to get a BCG internship, there's no reason you aren't good enough to work at the other firms.

Don't worry about being at a disadvantage relative to interns who accepted a return offer. Consulting doesn't offer the same advantages in staffing and visibility to senior professionals the way banking does for returning interns who are going back to the same group. Consulting analyst classes have a much higher proportion of people who didn't intern there than banking analyst classes. The work is also so much more varied (in duration, geography, and composition of the team you work with) than banking. 'Goodwill' isn't the same factor like it is for a returning banking analyst.

McKinsey has what I believe to be the single most powerful alumni network globally. I used to think it was HBS. It's not, McKinsey wins. No one in the world will fail to take your email or call seriously. They may not like you, they may not do the deal with you / hire you / invite you back, but no one is going to doubt your intelligence or professional acumen such that they'd deny you a conversation.

Bain (anecdotally) had the highest volume of placement in private equity, presumably thanks largely to its strength in that practice area.

Either way, if you're optimizing for a private equity associate role, the takeaway ought to be that you can surely get there from BCG but you ought to invest the energy in the post-internship hiring process for McKinsey and Bain to improve your odds.

Brian-Seabrooks:

...are the PE exit opportunities for IB really that much better than for MBB?

I am biased because I pursued the banking route over consulting. I don't think anyone that tells you consulting offers the same breadth of opportunities or probability of success in private equity recruiting as banking is correct.

There are firms who literally will not hire consultants. They instruct their headhunter firm to pursue only candidates from certain groups at certain banks, filtered by certain undergraduate schools and a certain GPA threshold. It's real.

You don't have to let that dissuade you. You seem to be articulate about prioritizing consulting over banking for various personal reasons you've identified through self-reflection; that's good. Someone performing in consulting at a very high level and chasing the somewhat narrower number of opportunities in private equity available to them is going to perform better than someone in banking performing at an average level pursuing broader opportunities.

Simply know going in that certain headhunters will take the first screen conversation with you and never call you back, guys at some firms that you reach out to for a coffee chat may laugh a bit explaining that you're wasting your time there, and some senior people interviewing you through the formal headhunter process may ask very direct questions about why you chose to do consulting instead of banking.

Don't take it personally. The headhunter has a very direct set of instructions to follow; it isn't up to them. The guy that tells you not to waste your time is doing you a favor and letting you know that firm isn't a fit. The senior asking you the tough question is not trying to trip you up; they're looking for you to give a coherent answer that demonstrates some conviction, mastery of self, and energy spent studying your prospective career path.

Brian-Seabrooks:

Is it easy to pick up the financial modeling skills that are necessary for PE without doing IB?

Yes, there's a litany of guides available that even banking analysts rely on to brush up their skills. You may struggle to answer the more complicated modeling questions some firms that have a more technical interview may give you, but this is solvable through brute force. It's a function of preparation. You can teach yourself all of this. You could also choose to steer away from such firms and go for ones who only do paper LBOs (as opposed to take-home tests) and who are known to use it more as a check-the-box exercise.

Brian-Seabrooks:

On a slightly separate note, do large PE firms like Blackstone, KKR, and Apollo have workers that are not mostly focused on the financial 'deals', and instead are more focused on pre deal due diligence or creating operational improvements for portfolio companies?

Apollo does not have a unit like this. Blackstone has a "PE Portfolio Operations team" ... and KKR has an entire unit called KKR Capstone. Here's an excerpt from another comment I made elsewhere:

APAE:

Look at KKR Capstone. They were the first to really institutionalize this, and by that I mean to invest eight figures into wooing away superbly qualified partners from McKinsey et al. to build out a brand new franchise. Firms have long done that same sort of thing (slotting operating or consulting executives onto a bench that the portfolio companies can access if they need it), but (a) those executives weren't selecting that at the apex of their career as the final thing they wanted to do for the last 15 years they worked, (b) the executives weren't often supremely prominent in their fields, they were often strong social connections of the partners at the PE shop, and (c) there was no emphasis on institutionalizing it into a business of its own.

KKR did all of that, then used the platform to begin billing the portfolio companies and thus created an entirely new revenue stream for the KKR management company. The logic was sound; why have the portfolio businesses you own giving away tens of millions annually in consulting revenue to MBB firms when you could build a quasi-MBB shop in-house that captures that same fee revenue?

Blackstone is another good one. Dave Calhoun runs their portfolio operations group. He spent two or three decades at GE (ended as Vice Chairman), then ran Nielsen for a decade after its PE takeover (Blackstone was part of that deal) before joining to lead the group.

Note that in such roles you are not part of the investment team. You are an internal resource and outside of the investment decision-making process.

Good luck. It sounds like you have a strong idea of what you're interested in. That's very commendable, and the level of detail in your questions indicates you've done good research already. Keep that up and I trust you'll be able to meet all these goals and use them as a platform to pursue larger ones.

Happy new year.