Post MBA PE Market Dried?

Any insight into PE recruiting for post-MBA market right now? I'm a 2Y H/S with previous UMM PE experience and market is very dry.

Even HIG (which typically hires 7-8 VPs in the fall) is taking only a small handful. Happy to exchange notes privately, please PM / leave comment below.  

 

Are the debt markets suddenly going to come back alive and Interest Rates going back to near zero? If not, not seeing the catalyst for hiring to pick up in PE by the spring.... severe market dislocation right now w/r/t TEV (similar to RE market) due to the rapid increase in rates. I'm on the debt side of funding LBOs of all shapes and sizes (pro rata, PC, Institutional) and there's been a noticeable decline in deal flow - esp. in the MM which was more resilient the last ~6mo 

The dominos are starting to fall & layoffs are picking up speed in general - Google just announced 12k layoffs today. Not to mention all the low key layoffs happening by the day (btw not suggesting Google's layoffs alone are the end all be all). 

 

Seeing the same thing for FT and internships - causing a bit of panic too because a lot of MBAs with prior PE experience try to work in Tech for a summer to chill before doing FT recruiting (now that tech has completely dried up...it's not great).

Not sure I'd attribute too much of it from firms pivoting away from hiring MBAs as a concept, since historically most post-MBAs going into PE already have 2-3 years of buyside experience just like laterals - don't imagine there's much of a discernible experience gap. A few HH's have also been confirming that they're not seeing much in the market.

I do imagine Tech PE / Growth is harder hit given a bunch of those funds aren't doing so hot.

 

I'm at HSW - we had zero offers from HIG this year. In the last 3 years (including 2020/covid year), we had 5-8 HIG VP placements from each class before the end of fall. 

Market is hella bad. I'm so fricking nervous!  

 

My thoughts from H/S - curious about other takes.

Definitely weaker market as funds tapped out on VPs last two years and fundraising has slowed (it’s very tough with LPs overwhelmed).
 

As opposed to previous years, the fall recruiting season (MM/MF) was more of a sputter rather than a wave. Those who put in the elbow grease during first year were able to get exclusive looks and processes and did fine (multiple accelerated offers), while for the rest I assume it felt a bit underwhelming in terms of opportunity.

Looking forward, the balance of firms are just starting to warm up and I think there will be a slow but steady trickle of things that pop up through spring and even summer. I expect the most of these will be smaller on average (new funds ramping up into fund 2/3), but also some new teams being built out at larger shops and natural industry turnover.

I ended up just accepting the first reasonable offer I got (which is not uncommon based on talking w my peers) and I definitely think firms outside of MFs have been able to upscale their candidate quality this year due to the market.

I will caveat that everyone in my program has either already gotten an offer or are still being picky about where they want to go, so everyone will have a job but on average I think my class will have “settled” more than if they had recruited last year.

 

Thanks for the helpful insight! 

One follow up - what do you mean by: "(which is not uncommon based on talking w my peers)" - as in, most folks are "settling"? I hear maybe '22 grads also ended up without PE jobs

 

Yeah, basically settling for “good enough”.

example of a classmate: it’s a lesser known fund and carry is a tad light, but cash comp is market and I liked the team so I’m just going to sign because there aren’t 4 other interesting opportunities with active processes at this very moment.

 

Did any of your friends have to network to get interviews? Or only a small percentage network? 

 

Probably three buckets:

High Effort (~20-30%): Starting Year 1, this person compiles short list of target funds and reaches out to 1-2 people at each fund purely to introduce themselves. Likely to do at least 1-2 investing related internships and maybe even a 3rd operating internship by the time full-time recruiting comes around. Obviously the best results with an approach similar to this.

Average Effort (50-60%): Minimum effort Year 1, probably do a non-investing internship that sounds "fun" or "cool" just for shits and giggles. Starting late summer / fall of Year 2, begin to reach out to some funds, engage headhunters, etc.

Low Effort (remainder): Purely rely on school's career board and headhunters.

 

Does anyone knows what folks are doing for internships lol? As someone mentioned above, traditionally lots of PE people do "something interesting" over the summer and then recruit full-time.

Combining this with the fact that way fewer PE firms even do MBA internship programs (plus the tech market stuff), this is a weirdly uncertain time for people who already "made it" to be unemployed, especially as MBAs have been getting IB / consulting jobs.

Like...is it a big red flag for FT recruiting to NOT have a good/legit summer gig?

 

It’s a tough fundraising environment with prolonged fundraises, hence makes sense to slow down hiring (compared to prior 3-4yrs).

What I see in the market is higher activity on the add-ons vs platforms. Large number of funds deployed at the peak of cycle, requiring heavy add-on flow to make the returns work (plus dry powder conservatism). Unfortunately, this translates into lower hiring numbers for most likely 2023/24.

 

Not sure why I got shit, sorry if this is a dumb question. Genuinely curious cuz I haven’t heard of it

 
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MBA hiring is absolutely dreadful this year and probably next. I am some time out of my MBA now but have many friends in the top schools (HSW):

1. Buyside hiring, which was always extremely difficult unless you came from a MF AND are willing to trade down in fund size, and ignoring the c. 1-3 seats every year at top hedge funds (Elliot etc.), is even worse this year across the board. MM funds have generally lost any headcount they would normally have, MF's are hiring way less and even then only the people they sent to B-school in the first place, if at all. VC is a nightmare (extremely easy to score an internship where you get paid nothing, next to impossible to convert).

2. Even consulting, the refuge of the terminally unimaginative middle of the road B-school student, is decimated. I know people who have had their FT post-MBA offers at MBB deferred for TWO years, and getting paid like 30k USD for the privilege lol. This is globally - US, Europe, Asia, with the exception of the middle east which is booming. There are just no projects. Ordinarily, MBB literally hoovers up anyone who doesn't defecate themselves during the case interviews.

3. Banking is also extremely rough - might be better in the US, but other markets are completely screwed. GS London for example took maybe 15 summer associates last year and converted maybe 30% - and those that DID convert, many of them got told close to graduation and commencing their FT roles to go to regional offices (Frankfurt, Milan), or get fucked lol. Same with this year's summer associates. Insane

4. Tech - lol. Tons and tons of shitty low-paid / unpaid start up internships on offer, and tons of "chief of staff" (read: glorified PA) roles up for grabs though. The majority of these are often started by other grads who think applying their first year marketing course in practice will make them the next Apple - good luck lol

5. Diversified industries / large corporates - no idea tbh.

The MBA value proposition is basically dead, unless you need a geographical shift. My 2c.

 

Any chance I can pm you. Currently considering a MBA (ignore title) and in pe right now. Would love to get more of your thoughts 

 

Are you an international? I’m also curious what role you’re in from your title. Thanks

 

Diversified companies / large corporates unfortunately are getting more competitive with all the consulting strike-outs (one of my classmates got a very highly sought after LDP internship in a cool industry and I was surprised that even before our first year summer, he planned to re-recruit for consulting anyway - he struck out in first year recruiting). Some classmates simply want the highest paying jobs post MBA and outside of banking, consulting is really the only other option. Most of the LDP summers got return offers. Some industries barely look impacted in terms of job postings though. Saw a ton of healthcare opportunities (which I'm going into) posted on our school boards earlier this month. Comp for these roles are around ~125-140 base. 

Consulting recruiting is insanely competitive. Not seeing what you're claiming in IB within the States tbh. Have a friend re-recruiting for other banks and it does seem like he's gotten sizable traction at the first or second bank where we have active alum within certain groups actively looking for 2024 associates. Tech is fairly bad right now but I've seen some friends get traction already (a classmate of mine got a small tech company internship, loved it and started prepping / networking right when they got to campus and already had at least 1 interview - not sure if they got an offer though).

 

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