Currently, a first year post-MBA associate. I worked in MM IB before MBA, and now work in BB IB in a top group.
Wondering how realistic / possible it is to transition to PE as a post-MBA associate... would I have to take a step back as a PE associate? Do IBD associates ever transition to PE VP?
Thanks
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It's extremely rare for someone in banking to transition to PE post business school. There are a ton of qualified candidates who did IB analyst --> PE associate --> MBA at HSW, but only a portion of them land post-MBA roles. From the PE firm's perspective - why would they hire someone who has never done PE over someone who has 2-3 years of experience? These firms are all very risk averse, so they'll go for the "safer" option.
Not sure how it works to transition from post-MBA banking to PE associate, or if it is even possible...
Thanks for the ply - I understand. I saw PE recruiting firsthand with many of my peers.
I know it does occasionally happen though! In those rare cases, how did they pull it off? Family connections? Luck? Startup fund willing to take a chance?
Usually a mix of those things in addition to joining a fund in a 2nd / 3rd tier city, networking, joining in a non-investing role (ie. capital markets), developing a niche expertise that few people have, taking a huge pay cut to go to a small / new fund or a fundless sponsor.
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This happens, I know multiple people who have done it -note that many times it’s not into traditional LBO teams. Mezz, Infra, and secondary teams seem to take a decent number of candidates.
It’s common enough where using headhunters I would think could be successful especially as you are at a top bank/group. I think there was a post floating around here from 2018 where a guy had that IB- _MBA- IB background and was looking at a couple MM PE offers, a SWF offer, and a pension fund offer.
It is certainly possible though unusual - as usual, with non-traditional routes, you're going to need to target smaller firms as well as ones that are off the beaten path in some way (startup firms, non-tier 1 cities, etc.)
"would I have to take a step back as a PE associate?"
Not sure what you mean by this? You are currently a first year associate, so you would probably get hired as a PE associate? I think the main issue with a lot of the traditional firms (i.e. the ones that do on cycle recruiting) is that they are looking for 2 years of hard labor and then bye bye, off to B school - obviously that doesn't work for someone already with an MBA. At the same time, it's also hard to get a career track (post-MBA senior associate) role, since a PE firm won't want to commit to someone without professional investment experience.
I am on the other side and I will encourage you to ask yourself why you want to do it. If you are doing it for the $, working at a top group at BB might pay much more than working as an associate or senior associate at non big name PE/VC. I have done it myself (similar to your situation) but still wonder the same question - is it even worth it after all the work....
I did it...
Was military pre-Bschool so at a pretty big disadvantage to the guys that did IB -> PE -> BSchool. Spent a couple years in a good IB to prove I could do finance then used a headhunter to transition. I'm in a tier 2 city with a MM fund... probably did not have a shot at a MF in NYC, so level-set expectations. I joined as they were building out the team to raise Fund II as a Senior Associate with a handshake deal to promote to VP within 6 months if I proved myself. Been a good 4 years and up for MD soon.
I'll echo one of the other comments here... if you're doing it for the money, my IB peers that stayed have fared better than me on cash comp over the last few years. Doesn't matter to me as I enjoy being an investor far more than an advisor, but ask yourself why you want to switch.
Thank you for sharing! It's helpful to hear other peoples' stories as reference point
Congrats on the big moves!
I did it. It was a Herculean effort. I almost gave up and took a corp dev role (almost). Agree with @completelyanonymousguy - there is next to zero chance of MF in NYC or SF (unless you are the son/daughter of someone extremely wealthy / powerful with a connection to the firm, etc, or some other extreme circumstance). So you will need to be flexible.
I had a finance-ish background prior to MBA (not IB), did H/S/W, went to a top IB for a couple years, and then recruited heavily for investing roles. Geography agnostic - I think I applied to roles in 25+ cities across a range of countries. SWF, pension funds, PEs of various sizes, MM, family office - you name it. I flew myself all over the place for interviews. Nearly made it with a few funds, only to be rejected at final rounds. It was very disheartening. It really took a while - and a lot of hanging on during dark days - but I eventually receive an offer with a NYC-based MF (role based outside of the US) on a brand new team. Took a huge pay cut vs. IBD (and I mean huge), plus had to relocate, plus it's risky joining a new group with no track record. However, it was a risk I was wiling to take.
From my B school class, off the top of my head I can think of 4 of us who went MBA--> IB --> PE, and one who did consulting (MBB) then went to a MF in London. So chances are pretty slim, but not zero.
Thanks for sharing your experience. How were you able to do all those interviews while working in IB? And do you think the move was worth it since you took such a huge pay cut. I'm not even sure if your lifestyle got better since MFs hours are probably just as bad depending on where you ended up outside of the US.
It depends what your priorities are. I think money is important, but I also didn't like having to sacrifice basically everything in IB. The hours in my role now are much better. So for me, I felt the tradeoff was worth it in the short term, with the idea that comp will come up in the future.
But you're right - most PE roles won't pay the way IBD does (at least for the first 10Y, and maybe not ever, depending on the fund and how successful you are personally) so if money is your number 1 priority, IBD might be the better answer.
To all those that say they took a pay cut, do you think you'll end up earning less over your careers compared to had you stayed in IB or is it just that in PE comp is less cash based on an annual basis and more dependent on carry?
Are you a chick? Did you go to b school in Chicago?
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