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Transitioning from Private Equity (PE) to Investment Banking (IB) is certainly possible, but it comes with its own set of challenges and considerations. Based on the most helpful WSO content, here’s what you need to know:

  1. Relevance of Your PE Experience:
    Your experience in a PE shop, especially one focused on real assets, can be valuable when transitioning to IB, particularly if you target groups that align with your expertise (e.g., infrastructure or real estate teams). The fact that your prospective PE team is full of ex-BB bankers could also work in your favor, as they may have connections or insights into the IB world.

  2. Challenges Without Proper IB Experience:
    Without prior IB experience, you may face skepticism from IB recruiters or teams, as they often prioritize candidates with direct transaction experience. However, your ability to perform well in modeling tests and your exposure to financial modeling in PE can help bridge this gap. You’ll need to position yourself as someone who understands the deal process and can hit the ground running.

  3. Networking is Key:
    Breaking into IB from PE will likely require aggressive networking. Leverage your connections within the PE team (especially the ex-BB bankers) and reach out to headhunters or alumni in the industry. Networking can help you bypass some of the traditional recruiting hurdles.

  4. Targeting the Right Teams:
    Focus on IB teams that align with your PE experience, such as infrastructure, real estate, or project finance groups. This alignment will make your transition more logical and increase your chances of being considered.

  5. Timing and MBA Consideration:
    If you’re considering an MBA down the line, this could be a natural pivot point to transition into IB. Many MBA programs have strong on-campus recruiting for IB roles, and your PE background would make you a competitive candidate.

  6. Proving Your Value:
    To make the move, you’ll need to demonstrate that your PE experience has equipped you with transferable skills, such as financial modeling, deal evaluation, and understanding of the transaction process. Be prepared to articulate this clearly in interviews.

In summary, while moving from PE to IB without prior IB experience is not the most common path, it is doable with the right strategy. Focus on networking, targeting relevant teams, and leveraging your PE experience to position yourself as a strong candidate.

Sources: Moving from Asset Management into IB / PE, Investment Banking to Private Equity - 6 Things You Should Know, Is BCG a viable path to Private Equity?, IB -> PE -> MBA -> IB -> PE, Transition from RE Development to REPE

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 
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As someone's career path who follows Mid BB -> LMM PE -> Regional LMM IB, I have a little bit of insight on the path and the pro's and con's of moving back to banking. I will caveat that after my time in PE, I was not sure what I wanted to do after, but ultimately I decided to move back to my home state, which left fewer options then, If I was more geographically agnostic. 

Pros:

  • The experience on the buy-side was great. I really feel like I can speak to what makes a strong business for the buyside and what deal killers might be. This in hand makes the whole sell-side M&A process a lot easier (drafting CIMs, Teasers, Buyer calls, etc.) in my opinion.
  • I actually found the buy-side to be more stressful, your actions have meaningful effects on your portcos and employees. One company I worked on was really struggling due to market headwinds and we had to do layoffs. That's not a fun experience. In banking, there might be some later nights or quick turns, but I genuinely can finish the work and not care once a deal is done.
  • Ideally, the further you climb up in banking, If you have done everything right, your life should get a little bit easier each year. At our bank, if you are on track to hit your revenue targets, you get a free pass to do whatever you want as a MD (and sometimes at director). While in PE, those guys were always grinding at the higher levels whether it was fund raising, portco work, attending important MPs.
  • I have a very clear line of sight on my comp that will be mostly cash over the next five years (up to director level). This is opposed to some of the LMM PE shops in my local market. 

Cons:

  • This may just be my firm more than the broad market, but I have encountered a lot of MDs, Directors, and VPs, that think some things are important in a process that are just not. One example of this is trying to get over "salesy" on certain aspects of a business (customer concentration, back office support, etc.) that often get discovered during MPs. I feel like if we were upfront about some of these, we could save our time and buyers time.
  • Generally, I feel like the banking colleagues are far more immature than my PE peers. I have more bosses in banking at are assholes and blow up over small insignificant stuff, because it is all they know.
  • This kind of relates to point one, but I feel like my PE experience was written off and just is not fully understood by my bosses in banking. I get a lot of "we don't do things that way in banking" which frustrates me. 

Overall, My life is pretty chill in banking, but I feel like I am working with a lot of people who never really grew in their career. This both excites me as I feel like I can beat out a lot of people as I climb the ranks, but it might also drive me insane trying to do so. 

 

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