First reason I'm doing this: I wish this existed when I was going through recruiting.
Second reason I'm doing this: Too many people are going on-cycle who don't actually want to do PE or going into it without enough information. I'm here to answer questions to hopefully limit that this cycle.
Background: banking, PE, business school, PE
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2. Process is: Headhunters talk to you all (i assume). They give us a stack of resumes and a spreadsheet highlighting top recommendations. The fund either coffee chats them or just waits until on-cycle kicks off. Once that happens, it's a total mess. Sometimes you have time to model test, sometimes you don't. Criteria is, does their background (very limited since it's so early now) and interests / convey that they have the drive, willingness, and intellect to do the PE assoc job?
3. References are key although starting to be somewhat deprioritized because banking internships are less and less evaluative. So in the late stages, it's if you know what you're getting into, have done research onto the team, have you prepped (there is a much wider range of preparedness than you'd realize as a candidate), and people just like you as a person. I know those are vague
Thank you very much! This is so helpful and gives context that is otherwise very hard to get. Since you mentioned preparedness, from your experience at your fund, what are the main areas where you think candidates who make it to interviews need to prepare more (such as paper LBOs, verbal business case, research on the team and past deals, being able to talk extensively about past deal experience or something else)?
Typically just business judgment and really having done your research about what the job is, what the associate job is like, etc. most of what you mentioned (past deal experience) isn't relevant since you haven't worked full time. Researching our team is a nice to have but not going to be the difference maker typically (at least for me; others may differ). My perspective is I'd rather find a person who is high horsepower and drive than someone who happened to study up on my portfolio companies.
I'll take this opportunity to make the PSA I meant to make: This job is not for everyone, and it's better for both parties if you really do your research to know what you're getting into and what the day to day is actually like. If it's a good fit for you and your strengths / interests / pain tolerance, then it is SO rewarding (experience, comp, flexibility later on in career, etc.). But if it's not, then it can be a really painful experience both for you and your team.
When you recruit on-cycle, it's very competitive from both employer and candidate so there will be a lot of "selling" on both ends. So here's a glimpse into the experience, not sugar coated: The associate is still the bottom of the totem pole, and teams run even more lean than banking, so you're often creating the work, doing the work, checking the work, presenting the work, and more. PE investors are never-ending curious about their own portfolios, so there will be countless asks that you frankly don't learn much from. You also lose your analyst class as most PE class sizes are much smaller than banks, which can be an adjustment if you are close with your class. Almost all funds are fully in office now (4 days at the least), which from what I hear is a big adjustment from banks where folks are still flexible WFH and roll into the office at 10am. I'd say most places you need to be in by 8:30 and can expect to work to between 10-1 most nights. When you're on a live deal, it is way more stressful, longer hours, and higher intensity than banking. When you're not, you're just working through a long to-do list of things that seem to never end. I liked in banking when a staffing was done, I could put it to rest and there were times where I truly had nothing on my plate; that has almost never been the case in PE.
The good stuff: pay, learning, and the reward at the end of the rainbow if you get promoted and can finally elevate yourself above the gruntwork. In short, it is a harder job (despite what folks who want to convince you that they made the right choice want you to believe). But it is way more rewarding, can be more fun, and definitely offers better upside in the future.
How much of an issue is a 3.5 GPA assuming top banking group?
Depends if diverse. Really more of an issue with the HH screens than with us (for me at least)
What were the most helpful things you did to prepare for recruiting?
Figure out if this is really something you want to do. See comment above. I can't stress this enough, people are exhausted of candidates not realizing what they're getting into and then ultimately are bad fits for PE. That spot could've gone to someone who really wanted it
What are the qualities in successful Associates you’ve seen?
Do you think PE is still the place to be now that the 10 year long bull run is over / TVPI & DPI issues abound? There’s fewer Partners-track seats as well and the competition seems to have increased a lot compared to even just a few years ago. Curious to hear your take
There are probably plenty of good forums on here for your first question, but generally it's: self starter / can work pretty independently to figure things out and not need much hand holding. Pretty smart but don't need to be genius. Willing to pretty much give it all up for work for 2 years. Reliable, well-organized (lots of little things where you are the one responsible for making sure they don't fall through the cracks).
Your second question: Definitely harder now BUT for people your age, the fact that it's too bloated at the VP/Director/MD level doesn't really matter because that'll flush itself through the system by the time it's relevant for you. Your competition is weaker than ever (hate saying competition when referring to your peers but it's the reality); people don't like working in the same way, so if you're willing to put in the hours for a couple years, you really stand out
If we theoretically could do on cycle, but just don’t want to, is there any harm in waiting for off cycle or doing on cycle next year (with understanding you would have to stay for another banking year)?
No real harm other than missing firms that fill their classes on cycle (if you try off cycle, but more and more firms are holding off or keeping spots for off cycle)
Or if you try on-cycle the following year, you might just question your decisions 2 years later when you're in your 3rd year of banking, having pushed back your career by a year. Any reason to not just recruit on cycle if you're ready? A couple weeks of stress and maybe ~12 hours of effort to lock it in. But again, only if you're ready and know what you're getting into (see my long comment above)
Thank you for your time here! I’m a second year IB analyst at a BB, and while I dabbled a bit in coffee chats / first rounds over the past almost two years, I’ve somewhat intentionally stayed off the MF PE or bust train to try and actually figure out whether I want PE / Growth / etc. Based on that:
Does burning out at the IB Analyst level (from an hours standpoint mainly) suggest a poor transition into PE? On one hand, I’d hope that learning a new job and set of skills would introduce motivation to grind, and I think there are genuine benefits from sitting on the operator side and developing a good understanding of what you need to operate a business. I’ve come to really enjoy working on consumer / consumer tech businesses, for example, and think it would be a good crash course period to learn (caveat being the macroenvironment rn). On the other hand, I might be tired of working this hard lol, especially with what is sure to be a tough ramp-up for Assoc. I’m still “top-bucket” and care but can feel myself caring less. Your honest answer might be “hey man I’ve seen this work fine but fix the attitude” or “hey you’re going to get crushed and will try to spin out and quit 6 months in”
From peers / juniors you’ve seen stay A2A in banking vs come into PE, how much do career outcomes truly vary if people don’t see themselves in either role past 4 years post undergrad? Bit of a leading question, but I don’t see myself sticking it out for VP+ - respect the hell out of y’all in either job but don’t wish to emulate. The An3 / Assoc1 IB track vs PE Assoc 1 is honestly a tough thing to weigh, not to mention introducing other options like corporate / industry. Comp difference probably isn’t too material beyond whether you can A2A early in IB, so it probably comes down to what you want to learn, whether you want an MBA, etc. - which I appreciate is all a personal decision.
Curious why you say you need the VP promo to use PE as a stepping stone to a CFO role? Surely after 2 or so years as an Associate you could exit to a CorpDev / CorpFin role at a portfolio company and just slowly work your way up to CFO level positions.
What was the cost of selling your soul?
Never needed one anyway
What background did you come from? (Top EB RX, BB, MM, etc...) Is it possible to break into MF PE from lower tier EB background and how would you recommend going about that process?
Top EB / BB (same placement so not sharing to hide identity). It's totally possible, maybe just need to do more networking in advance of on-cycle but the advice is the same as everyone else. Prep, impress the HHs, and then it's anyone's game once on cycle kicks off. Maybe with the HHs, wouldn't hurt to be more targeted in what you want ("I want $1-5 billion funds in NYC" vs "I want to do PE") so they can highlight you as a candidate that is a particularly good fit for those funds. Downside is that narrows your funnel, but just a risk-reward decision
If you had 24 hours to prepare for on cycle and want to give yourself the highest chance of getting an offer how would you spend it?
Following
Posing a question here since I just talked to our HHs and HR about our on-cycle approach. If you're reading this, are you willing to comment your general profile, what you're looking for, and how you're thinking about on-cycle, and your level of conviction that this is the right job path for you? For example
Non-diverse male, going to MM in NYC. Interested in MM PE, focused on tech groups. Not prepared, not planning on doing on-cycle, 75% sure that I want to do PE
Non-diverse male, going to MM in NYC (niche group). Interested in PE generally (MF or MM, I'm flexible/realistic about prospects), generally flexible on group but would prefer either tech, industrials, or consumer. Started preparing two weeks ago (technicals, paper LBO and 60 minute/simple LBO model are ready, still getting better at full operating model + LBO for 90+ minute tests), will be ready in time though. 100% plan to go on-cycle, 85% sure I want to do PE (10% wants to do PC, 5% is ok staying in banking if I don't get an offer I like during on/off-cycle).
Non-diverse male, going to BB coverage group in NYC. Interested in UMM/MF PE, flexible on group. Feel very prepared, have been working diligently all senior year. 100% plan to go on cycle; although I am traveling internationally post-grad so I'm hoping on-cycle holds off or I can interview virtually. 100% certain I want to do PE.
Question: I've gotten mixed reviews from HHs about interviewing virtually for on-cycle. What are your thoughts?
you're not getting the same looks virtually
Very helpful color. TBD if interviews will be virtual or in person this year. I am hoping for in person but we'll see. Traveling internationally would make it harder but not impossible if remote. Obviously if in person, you probably wouldn't have time to make it back in time. But if I had to guess, it'll be split in person vs. virtual so there will be changes to interview if you're international, so don't stress about your travel
Non-diverse male, going to EB group outside of NYC. Interested in MF / UMM PE. Can do PF Level 3 test from scratch. 99% plan to go on cycle unless it happens during my grad trip, 100% sure I want to do banking / PE.
Non-diverse male, going to BB group in NYC. Interested in MF/UMM PE, flexible on group. Graduated early, traveled a bit early on, can rip LBOs in sleep and plan to go all in. Senior year travels can wait until after the OC process. 100% plan to go on cycle, and 100% sure that I want to do banking and eventually PE.
Xxx
How do you know you want to do buyouts instead of other strategies?
Do you or your firm refrain from interviewing West Coast-based candidates (assuming you're NYC-based and the candidate matches the typical profile of a "quality" NYC-based candidate, except for geography) and/or do you hold those candidates to a higher bar during the interview process? Are you aware of headhunters doing this?
Not super well suited to answer this unfortunately. I had friends in SF groups who intended to recruit in NYC, so what they did was basically buy refundable plane tickets to NYC for every day or so in the week or so when OCR kickoff was imminent, so he could be there in person. This was a while ago when all interviews were in person though, so maybe unnecessary now
Why did you get your MBA? Going into my senior year year of college and am debating prepping for GMAT & applying to the M7 deferred admission.
Deferred seems like no / low cost... free option and I don't think the business schools would penalize you if you applied and got rejected, and tried again later. Having the 2+2 admission makes you more attractive because it gives them certainty that you do want to do business school (and thus are eligible for promotion, for the places that require it) and they don't need to write you recommendations / have you distracted for 3-6 months while you go through apps
Why I did it: always dreamed of going to the school I went to, great network, nice to get the break.
sweet thanks man
Great advice. Thanks for sharing.
Do you have a path towards continued promotion at your shop or do you think you’ll need to downsize to a smaller fund in order to one day realize meaningful carry? What do you think separates you from your peers besides for hard work?
Yes, and the only controllable factor has been hard work and proactivity. The rest were all luck: finding a place where I'm a cultural fit, the fact that there's headcount spots available, I'm in a sector that's growing, etc. But believe me when I say I am not special at all; didn't think I was going to get a banking offer when I was a sophomore, was lucky to get one, recruited on-cycle and found out later it got the offer because someone else chose a different firm (who eventually got burnt out by that firm and left PE), and then did well as an associate.
Can you still have success in MF recruiting during the off-cycle? How different is the off-cycle process compared to on-cycle? Would you say it is harder since the process is more drawn out?
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