Possible to lateral from a middle market to mega PE fund?
I am only a first year investment banking analyst at a small boutique firm.
I am curious as to whether it is possible to lateral from a smaller fund to a larger mega fund once in private equity. I know the typical path is BB or EB to a mega fund but want to know how easy it is to move once in PE?
I am inexperienced here so would appreciate any thoughts.
Thanks in advance.
Everything's possible. It's extraordinarily unlikely
It’s certainly possible. Depends how low in the spectrum of middle market you go. Going from LMM to MF is harder than UMM to MF. I tried earlier in my career and the consistent feedback was that the skills from working on smaller deals in the LMM space isn’t perceived to translate as well to the MF-sized transactions. So while there’s no black and white answer to your question, definitely the rule of thumb is the larger fund you can start out in, the better shot you have longer term. Ultimately I’m glad I stayed where I’m at because you see a lot more of the operational aspect in LMM which I ultimately find more fun than the financial engineering and pure deal structuring that you spend more time on at MFs by virtue of the fact that you are dealing with large, generally mature, scaled businesses where there is less you can do to drive change.
This is super helpful. I really appreciate the color. Although not in PE I’m inclined to say that I would prefer the operational aspect as well.
I am assuming going from LMM to UMM would be easier?
Yes that type of a move happens pretty frequently
Maybe easiest to lateral now to BB or EB first and then recruit for UMM/MF. As opposed to small bank to MM to MF.
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Hi, what is BB and EB?
fyi you can do a search for this in 10 seconds. either hit the search bar top right, or google "WSO BB and EB" and it will bring you back to the website
but BB = bulge bracket bank (GS, JPM, etc) think top 10 multinational banks that have operations all over the finance world from retail banks to wealth management to IB
EB = elite boutique (Evercore, Centerview, Moelis, etc) that focus almost exclusively on investment banking
Pretty difficult move, MM market knowledge and deal execution is just very different from the MF world.
BB or EB now wouldn't be too difficult, and while you may not land MF from there, you could go UMM and then trade up to MF down the road.
Would I be able to network with you somehow and ask for your input? I’m currently recruiting now.
It's tough definitely but I've seen it before ie. Leonard Greene to APO. Strong networking and a compelling story could help secure the move
I agree it is possible. This isn’t really a good example though, LGP is competing for the same deals as the main MFs (i.e., KKR, BX, etc) pretty often
Yeah I know you're right haha I just thought of a guy I know who did that exact move. But on linkedin have seen moves from MM (usually the larger MM funds) folks going to MF.
Derivative question: for those that have made or seen such a move, what did you find was the main difference on the ways of working and in DD process?
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