PE Analyst - Debating IB vs. PE/Growth Lateral
Currently a year into PE as an analyst, but my role has been heavily sourcing-focused with limited exposure to execution/modeling. I’m debating whether to go back to banking or lateral to another PE/Growth shop with a stronger technical focus. Curious how others have navigated this decision and what paths you’d recommend. Long term I’d like to stay in PE/Growth, but recognize I may need banking experience to build stronger technical reps.
Based on the most helpful WSO content, your situation is not uncommon, and the decision largely depends on your long-term goals and the skills you want to develop. Here are some key considerations:
Banking for Technical Skills:
If your current PE role is heavily sourcing-focused and lacks technical exposure, moving to investment banking could provide the rigorous technical training you're seeking. Banking analysts typically gain strong modeling experience, working on tasks like LBO models, DCFs, and other valuation techniques. This foundation can make you a more competitive candidate for technical roles in PE or Growth Equity later on.
Lateral to Another PE/Growth Shop:
If you want to stay in PE/Growth long-term, lateraling to a shop with a stronger focus on execution and modeling might be a better fit. However, as noted in WSO threads, growth equity roles often emphasize sourcing, and even in PE, junior roles can sometimes be limited in technical depth compared to banking. Research the specific responsibilities at the target firm to ensure it aligns with your goals.
Challenges of Moving Back to Banking:
Transitioning back to banking after starting in PE can be challenging but not impossible. Networking will be critical, as well as demonstrating your commitment to gaining technical skills. Some WSO users have highlighted that lateraling into banking as a first-year analyst is feasible, but it requires persistence and a clear narrative about why you're making the move.
Optionality and Long-Term Goals:
Banking provides broader optionality for exits, including PE, Growth Equity, and other finance roles. However, if you're certain about staying in PE/Growth, lateraling directly within the industry might save time and keep you closer to your long-term goal.
Networking and Headhunters:
Whether you choose banking or another PE/Growth shop, networking is essential. Headhunters can help you identify opportunities, but direct outreach to firms and leveraging your existing network can also be effective.
Ultimately, the decision comes down to whether you prioritize building technical skills through banking or prefer to stay within PE/Growth and find a role that better aligns with your long-term aspirations.
Sources: Growth Equity vs. Investment Banking for Undergrads - Thoughts?, Why the hate towards growth PE / sourcing (e.g. KKR Tech)?, Is the IB vs. PE Debate Shifting Back Towards IB?, Re-Doing 2 YR IB Analyst Stint
PE / Growth (on the buyside) is an entirely different job from being at an IB (sellside). Even if it's sourcing focused, if you can change your role and lateral into a different PE / Growth gig that would be better than moving to IB, where your story will be muddier and you will have more decisions and time to explain, unless you want to be a career investment banker. So, first figure out which you want to do, and if it's PE start looking for a firm that is willing to hire you as a first year PE associate. This will be a step back because you won't get credit for the time spent in sourcing role but as long as you have the technical foundation from early IB role, this will be the quickest way to get back on track. If you don't have the technical foundation, start doing LBO models, one a day, practice, get your current employer to send you to training the street, etc.
Long term 100% sure I want to stay in PE/Growth. I don’t mind the sourcing side and actually enjoy it to some degree, but I do want more technical exposure as well. I didn’t get the traditional IB reps since I went into PE straight out of undergrad, though I did a number of internships across PE/IB. Been building my skills on my own, I picked up the TTS course myself and have been recreating models/building models from scratch in my own time.
The biggest challenge has been getting firms comfortable with my non-traditional path since I don’t have the “check the box” IB background. I’ve been pushing hard on networking, but I’ve found that some groups still hesitate without the IB deal reps. That’s why I’ve been considering whether a pivot into banking just to lock down those reps might be way to position myself long term.
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