Q&A: Non Targ -> BB Coverage Group -> Incoming MM PE
Hey y'all, i haven't been nearly as active on this website in the past few years, but this place was instrumental in my development as a prospective student, intern and also as a relatively avid reader during my time in IB, so i figured i would try and give back via a Q&A. Quick background: went to a non-target state school in the midwest, 3.4 GPA, nothing sexy, but managed to get an internship at BB in NYC, doing IBD for my SA. Interned in the same coverage group i've been full time in for 2 years, and will be leaving here in 3 weeks to go do PE in the industry i've been covering, but moving back to the midwest. Happy to answer any questions or be of help in anyway that you guys think may be helpful. A lot of individuals helped me throughout my networking process so want to give back in any way possible.
Originally from the midwest, so going back there just made the most sense. Don't get me wrong, I really enjoyed NYC and having to go out of my comfort zone to get to know new people and groups of friends, but as you get older you begin to value your personal time more and more, and i figured i would enjoy it more around family and friends.
Chose my fund based on industry focus and culture. The culture in my group has eroded over the past 2 years and i realized how important it is to work around people you like, so that was a focus for my recruiting. The people at my new fund are just all around great individuals, and the funds focus is on a vertical of my industry that i'm very interested in and could see myself staying in for a long time. So stars kind of aligned there.
In terms of comp, it's less than comparable MMs here in NYC, but not by a ton. a first year asso at a MM PE shop should expect around ~$200 all in for their first year. For reference, latest fund size at my firm was in the 500-800 range, with a total AUM of ~1.5-2.0bn. obviously at upper MM firms in the midwest, these comp numbers will be higher (think MDP, GTCR).
interview process was standard for PE - phone screen followed by a super day (7-8 interviews, and a case study which consisted of building a full 3 statement model from scratch including LBO, and also an investment pitch). This is indicative of every firm i interviewed with (which was a lot). I have a ton of experience interviewing for PE (talked to like 20 different firms over the course of my 1st / 2nd year), so i'm happy to elaborate more here if need be.
Does have a bschool track record, a few of the partners have relationships with a few top programs (sit on the board of admissions, etc.). Recent associates have placed at Wharton and Booth, with the latter being more common. As far as internal promotions, they don't have a history of promoting, but they are open to the idea if there is a good fit and a need for a new VP.
Hopefully this was helpful in answering your questions. also, like the username.
Eh, not really. i interned at a small business lender, which can definitely be compared to IB on a much much smaller scale, but is by no means similar. I just found ways to spin my experience to seem relevant, and also to emphasize the time commitment, being able to balance school alongside work, etc. which are all things interviewers look for, especially in IB.
I actually do think my school prepped me very well. my school had an undergraduate business program, with a ton of accounting and finance classes, so i actually came in more prepared than most other interns/analysts because i had taken modeling courses before and knew corporate finance decently well. but that being said, college courses are by no means necessary in order to succeed, you will learn everything you need to know on the job, so long as you have a good attitude and ask questions.
Habits is a good question, i think as of late just trying to maintain a healthy diet and working out has worked wonders for me. i struggled a lot in my first year with being overwhelmed and as a result my diet suffered and i didn't really go to the gym. Once i made fitness and diet more of a priority, i felt a lot healthier and happier and was able to be more effective at work.
I think another habit to get into is to never be afraid to ask questions. This is super important, but commonly overlooked, as analysts commonly try to just keep their heads down and grind through without asking questions, as to not bother anyone. A lot of time and effort can be saved by asking a few simple questions, and knowing the right question to ask can change an all-nighter into a quick 5 minute fix and you're out. Get into this habit early, as being inquisitive is usually seen as a good thing, and you'll learn along the way.
I think lastly, always be appreciative to those who helped you. i wouldn't be in this job if it weren't for a few individuals who stuck their neck out for me. always make sure to let people know you appreciate what they've done for you, and don't hesitate to do the same for someone else.
Coming from a BB, does it bug you that you weren't able to land a MF or upper MM position? Do you think you would have had better shots at megafunds if you had a higher GPA? Would going to a target have increased your chances?
I'm about to start at a top BB (top coverage group) and I went to a top target with a high gpa, so I'm trying to figure out how to ensure I land at a firm that pays well over 200k for associates
not at all, never wanted to do a MF. Interviewed with a few, but i just wasn't attracted to the focus. Some MF and upper MM shops are great, but as a whole they wouldn't provide the experience that you will get as an associate at a smaller MM firm. As a whole, you get more experience when you're on smaller teams and given more responsibility, which tends to happen at MM firms. i've worked on the sell side for a few deals where the buyers were the TPGs, KKRs, Carlyles of the world and they have like 6-7 people on each team. the associates role is almost like the analyst role at an IBD ( very rigid expectations in terms of work responsibility, not a ton of opportunity to play up to a higher role), and that's not what i want out of a PE experience. I also find smaller deals to be more interesting just due to the operating aspects of the business - tend to have higher growth, more malleability from a PE owner perspective and you're more likely to see considerable operational change over the course of your investment versus a typical MF investment. There is a lot less financial engineering at MM firms too, which was attractive to me.
in terms of your other questions, yea i mean having a high GPA from a target is very important, so is networking, but i think what's equally as important is the group you're in. You can have a 4.0 from harvard but if you're in a poor performing group that has not had any notable exits in recent years, it will be difficult to get interviews, as headhunters rely on 2nd and 3rd years from banking groups to provide them with the 1st years that should be considered for top positions. so keep that in mind.
I will say though, if you're in it for the money, you are going to be miserable. You should want to go to a MF for the network, for the exposure to large, potentially landscape changing deals, and for a 2 year continued learning program that will ultimately result in bschool. If you're doing it for the money, you will burn out and hate your life. Work/life at MF's is arguably worse than most banks.
100% agree. I'm at a small shop in the Midwest and I don't see the appeal to MFs after working here. Hours are better, people are great, and as an analyst I get way more exposure to the business than I would anywhere else. First month on the job I was building models, doing our waterfalls and returns analysis, helping out with operations of our portfolio companies, and sitting in for DD interviews. I learned more in a month here than I had in I did in a year of undergrad classes.
Not a ton of people in my class have recruited for PE thus far to be honest (some left for corp dev, some are looking at/going to hedge funds, others aren't really focused on recruiting), but those who did want to recruit got hit up for a fair amount of the firms they were looking at. To be honest, those in my class who are leaving (there are 5 of us), none of us really wanted to do upper MM/MF PE, but almost all of us interviewed with upper MM or MFs along the way, so the opportunity was definitely there. So long as you have a good resume and are a solid performer, you shouldn't have an issue interviewing with these caliber of firms from coverage groups at any BB, assuming your interest in these firms is communicated to headhunters.
Big differentiators to getting interviews:
Deal experience (you want to aim to have 2-4 M&A deals on your resume, know these like the back of your hand)
Class rank (recruiters will ask more senior analysts in the group who is performing well within the 1st year class, and who should be considered for top roles)
School and GPA (less important, but can certainly be a factor)
Networking (headhunters control the interviews but networking can be a massive differentiator when it comes to getting interviews, as people inside the firms you want to interview with can pull your resume out of the resume book that the recruiter sends them)
Those are the big things from what i've noticed in my recruiting process.
In terms of travel for interviews outside of NYC, for some i took vacation days, other times i just told my teams i was traveling for personal reasons and would be away from my computer for part of the day, but would work remotely when i wasn't busy. This is generally allowed in my group, but again my group is more open to recruiting so this might not be the best approach to take depending on your groups approach to junior recruiting.