Is investment banking experience really that important for MM PE?
Hello,
I'm from the UK and recently been looking at the background of mid-market private equity teams in the UK to see if the advice on this forum is truly correct.
I've found that in general, at a lower level, most people are from big 4 corporate finance, or they're entrepreneurs who have significant expertise in one area. They don't always come from a top 10 school, most don't have an MBA etc.
However at bigger PE funds obviously the majority are bankers from top schools.
So is it really true that IB and attending a top school is the route to private equity? It seems at higher levels this is true but seems like prestige goes out the window the smaller the fund is?
I have found that for smaller PE firms (e.g. all these boutiques in Leeds/Manchester), they usually hire people with Big 4 backgrounds. But that's not because they wouldn't prefer people with IB experience but because the IB guys aim higher. But the Big 4 backgrounds are mostly Audit or Corporate Finance/Deal Advisory. Corporate Finance is pretty much IB so you can see how it all ties back to IB.
In other words, if you don't want to work at the biggest PE companies in the world, and instead you prefer some regional PE work, you can probably go into Big 4 accounting (e.g. Audit or Deal Advisory) or boutiques and you'll be fine.
But if you want to work at KKR/Apollo etc., top IB is still the preferred route.
tl;dr small PE regional boutiques = Big 4 audit / corporate finance or corporate finance boutiques (works); IB - probably preferred but hard to find applicants
top PE firms = top IB
So if corporate finance is similar to IB but just at a lower level, why don't people make the move from big 4 CF>>boutique IB>>Larger PE firm? Idk if people do I just haven't seen it before on Linkedin or anything.
The large and reputable PE firms want to hire the "best of the best," so IB is strongly preferred over big 4 CF
People lateral from B4 CF to IB all the time.
And those who lateral generally get better traction with recruiting for MM PE funds which aren’t so open to Big 4 ACAs.
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