Moving from consulting to PE
Hi everyone,
I am a first year analyst/associate consultant at a T2 consulting firm (Strat&, EY-P, LEK, OW) and work at a firm which is renowned for doing a lot of DD focused work. I have often heard people talk about PE as an 'exit opp' for consultants, but when I look at the profiles of firm alumni or LinkedIn search PE associates, it almost always seems to be the case that the PE associates are former IB analysts.
I would be very interested to hear people's insights into the actual frequency/feasbility of a PE transition from consulting (as a standalone, not compared to banking - we all know that IB lends itself to PE more).
If anyone in PE/former consultants now in PE could give their take on how consultants can break into PE, I would be very grateful. Also, if there is anything specific I can do now as a first year analyst (such as take an accountancy exam, for example) to boost my ability to break into PE when the time inevitably comes, that would be hugely helpful.
Thank you for your help in advance!
It's definitely possible but typically only from Mckinsey, Bain, & BCG (MBB). You also see people make the move from EY-P. If you aren't seeing a lot of alumni make the move, I assume you're at Strat&, LEK, OW, etc.). Not saying it never happens from those firms but it becomes a lot tougher and you'll see more LMM exits
No insight into how easy it is for consultants to exit into PE as I'm on the banking side of things but there are a couple of points I would keep in mind when comparing exits vs. bankers.
- First of all, there is a HUGE selection bias. People in banking choose banking because they want to work in finance and a very large proportion of bankers go into banking with the target of getting into PE. Meanwhile, most consultants are not interested in finance, which is why they choose to work on the commercial side of things to begin with. With that said, one of the main reasons you see many more bankers in PE than consultants is that many consultants are simply not interested in PE. I did an internship at a UMM PE fund and we were recruiting associates at that time. Even getting consultants to an interview was SUPER DIFFICULT because no one was interested in PE and we even had interviews with people from T3 consulting firms.
- Secondly, there is a MUCH larger pool of candidates from IB than from consulting. While PE mainly recruits consultants from the top three firms (MBB), there is 10-15 banks that they recruit from. If you look at a firm like Bain, they have around 1,400 employees in total in London. Let's say that 1,000 of those are consultants. Meanwhile, the bulge bracket banks in London all have 1,000+ people in IB and some of them have over 2,000. With that said, your pool of consultants in London that PE will recruit from is probably around 3-4,000 people while the pool of IB candidates is closer to 15-20,000. Of course this is a bit simplified as it includes people across all seniorities but you get the point.
The combination of the above-mentioned factors results in bankers being massively overrepresented at PE firms.
There’s plenty of consultants wanting to do PE. Sounds like the fund where you interned did something wonky
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