Current situation: Just lateraled from a no-name shop to a BB. Have 1.5 years of IB experience and coming into the new shop as a Analyst 2. If I want to move to PE eventually, do I have to recruit now and move within a year or 2 to get in as an associate, or can I stay in banking longer and move to PE as a Senior Associate/VP? Would love to hear stories about those who faced a similar situation or came into PE in a non-traditional way. Thanks!
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No you cannot jump from being an Associate in IB to a Senior Associate / VP in PE. They are different jobs and most reputable places won’t give you credit
Been a lot of threads on this but typically you move to PE after 2 years in banking or at the MD level. If you're a VP in banking, it'd be VERY difficult to get into a PE VP position as you just won't have the skillset, particularly on portfolio management and non-finance areas (HR, ops, sales/marketing, etc.). Not only would the skillsets not be a match, but you'd likely be too expensive cash-wise (IB VP largely make more cash comp vs. PE VP, but carry is the big outlier in PE).
Echoing above, it's not typical nor would I suggest trying to lateral to a SA/VP PE position with no previous PE experience. IB and PE are tangential but not the same, and our firm certainly wouldn't give credit for that time in the way that you'd like.
You may be able to negotiate an Associate position with a fast track1 year track to senior, but even then, the opportunities would be few and far between.
Just for context on the market, we (MF) have interviewed IB Associates (in some cases 2nd and 3rd year Associates) for Associate 1 positions (no credit for Associate years), and they have generally been willing to take the hit to make the move. Echoing others that getting credit and going directly to Senior Associate would be challenging.
In the same situation - my question for everyone would be at what point is it simply time to throw in the towel on PE recruiting? Both in terms of "aging out" and the trade-off of losing a couple years no longer being worth it.
A to A Assoc. 2 for reference, don't want to stay in IB. I understand the inaction of not recruiting earlier has its consequences. At the same time can't help but feel bummed that there's nowhere to go outside of IB if I give up on PE recruiting
It’s not that you need to “give up” necessarily, but it will get more and more difficult. I know banking VPs who have gone over to PE and hedge funds, albeit each one I know went to a much smaller shop.
Similar to the comment above, we’ve hired second and third year IB associates as first year PE associates at normal payscale. You have to decide if moving to a buyside role is still worth it. I’d much rather be a senior PE partner than a senior MD (selection bias applies), but since the actual odds of making it that far aren’t great for anyone, I don’t think I’d personally be able to swallow going from VP at a bank to being a first year associate at a fund.
I wholly disagree that there’s nowhere to go though. Corporate development, business development, inhouse strategy / strategic finance, financial operations, corporate partnerships, etc etc - tons of places you can go that offer solid earnings potential over a career, even if not as high as IB / PE / HF
Does your experience hiring IB associates include MBA associates?
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