I graduated in May 2014 and am entering my second-year as an analyst at a middle-market IB. The winter recruiting season for PE kind of snuck up on me and I missed the train entirely.
Given that the majority of PE firms have already hired their summer 2016 class, I am a little worried at how my chances stack up. Should I participate in recruitment this winter for the summer 2017? Would it look bad transitioning to PE after three years of IB?
Any thoughts / advice on how to approach the recruiting timeline would be helpful.
There are over 3,000 PE firms headquartered in the US. I say this to point out that there are a ton of opportunities still out there for you to grab or create for yourself via networking. Not sure what you mean by the majority are done hiring. Maybe you're referring to the short list of firms you choose to be familiar with? Most people would consider Summer 2016 recruiting to be off-cycle at this point. During Summer 2015 off-cycle recruiting, I along with a few close colleagues had the opportunity to interview with some very nice shops (Mega and Middle-Market). You're far from being behind when it comes to finding an opportunity. The decision to wait or recruit has a lot to do with 1) your current relationship with the search firms, 2) your marketability and 3) why you didn't recruit the first time. You say "PE kind of snuck up on me" and that sounds weak. Who doesn't it sneak up on? The timing is a surprise for most folks every year. If I were a search firm, I'd be interested in hearing a good reason why you waited.
Lastly, three years of IB isn't a horrible thing. I did IB for three years prior to my transition and it didn't come up as a topic of discussion once. More often than not, I got an extra point for it because of more deal experience. It was not a handicap.
What do you mean snuck up on you? It's not like it happened between the hours of 3-4am one night while you were asleep. There was a process, you missed out, by whatever reason, but it was by your own volition or inaction that you missed it. Just want to make sure you know this and that you don't use that passive victimized reason when PE firms ask you why you waited until your 3rd year.
With that said, no, you're not too late. I've seen 3rd years transition into PE. Some have stated that they wanted to stick around and gain more experience, went into a new group or space that they wanted to work in, or enjoyed the team and wanted to stick around as a solid analyst for another year.
To the extent you are comfortable doing a 3rd year in IB I would 100% recommend doing so. If you choose to go this route, it is very important that you do not do any interviews at all this year, at least not PE ones. If headhunters find out you interviewed in your first year, didn’t get anything, and are trying again in your second year you will have trouble getting interviews in your second year.
As mentioned above, megafunds and other top funds will recruit off-cycle as positions open up but in my opinion these opportunities can be more challenging. I say this because there is less of a rush and they take their time making decisions which allows them to really grill you as opposed to when they have 2 days to fill their classes during the cycle.
Comes back to the point of whether or not you think you will be comfortable doing a 3rd year. You might feel like that’s no big deal now but when your finishing up your second year and everyone else in your class is checked out/leaving you might regret not jumping in off-cycle for something a little less prestigious. That being said if you wait until your second year, get a megafund or job of your dreams you might feel like it was worth it. Really matters where your priorities are and how important the fund you go to is to you.
In the grand scheme of things, an extra year isn’t a big deal and you will most likely still learn a good bit
The recruiting season (i.e. late winter/spring) primarily applies to larger firms - think megacap and upper MM firms. Since you're at a MM bank, most of your recruiting targets will be smaller firms, which tend to have looser recruiting timelines. Additionally, people leave unexpectedly from buyside firms for a variety of reasons, so there will always be needs-based hiring, though it certainly picks up at different points in the year. To summarize: lots of opportunities of all kinds still out there; maybe just think about whether you'd be open to immediate start positions.
Thanks for all the answers -- insightful and helpful.
If you want the best shot at a great PE gig, would recommend lateraling to a BB / good boutique and recruit next cycle.
Can you reach out directly to the firms instead of going through headhunters?
You can, but I personally didn't find this (i.e. networking) to be as helpful as it was for getting interviews in IB. The vast majority of buyside firms use headhunters, so it's just what they're used to.
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