Q&A: Principal at megafund

I feel like giving guidance to younger people is important. Unfortunately, I have a relatively straightforward background: * Target school 3.8+ GPA * Did the usual investment clubs, pwm internship freshman summer * Boutique IB sophomore * BB junior then got a return offer * Did 2 as analyst then 2 as associate then MBA * Now principal at megafund in New York. Feel free to ask me anything.

 

As others have also said, thank you for doing this.

Do you believe it is possible to learn the technical IB skills without doing the standard summer stint? Upcoming summer role will be relatively light on technicals. Want to be fully prepared to answer any technical questions for FT interviews so was wondering if you had any advice on how to go about studying technicals outside of work experience.

 

I work at a middle market fund... i did banking earlier. it seems there is a very structured path for many for some time - I.e. similar to what you did - banking then private equity then an MBA and then more private equity.... my question is afterwards, what do folks end up doing? The ones that don’t become partner in private equity?

After a while there are often limited roles that you can easily fit into - I.e. “Pre-MBA” and “Post-MBA,” etc.

What separates the folks that stay in private equity for a short time vs ones that are able to rise up the ranks? It seems like most people leave private equity after a few years.

Thanks in advance!

 

I'll be completely frank here, and I hate using the word "impossible", but it is just very very unlikely because of your age, experience, and competition. Let's assume you go get an MBA. You'll need to break into a HSW, which given your age + experience, that in itself would appear extremely challenging. HSW students are really the only ones who get looks from megafunds (or really any PE fund over a few billion in assets). Then consider the fact that these funds wouldn't even touch a HSW MBA candidate without prior PE experience (I've seen countless friends in HSW programs even with PE experience struggle to get post-MBA seats). Why do they hire like this? The question really is why wouldn't they hire like this? There's enough of a labor surplus with this type of (undifferentiated) background that these employers can afford to be selective on paper and not risk any HR capital on someone who doesn't. Now consider the fact that these post-MBAs are either coming back as sr. associates or VPs, who are expected to hit the ground running on day 1. No one is training someone getting paid as much as they are. They should know what a M&A process looks like and be able to run and manage the advisors, the docs, the bankers, all seamlessly. Now let's say you go and do the investment banking route after getting a MBA. By the time you will have picked up some of these skills, you'll probably be in your mid-30s. Where could you fit into an org chart at a PE fund? All the churn happens at the junior level. They wouldn't hire someone in their mid-30s to go grind it out with a bunch of 25 y olds... because that would just be awkward and I doubt any respectable 35 y old wants to do that anyhow. And lateraling in at the mid to sr level at a PE fund is just out of the question given how many ppl with MORE years of PE experience either at that fund or in the industry would qualify over you.

You may very well be an intelligent guy, but in life you sort of miss these small window of opportunities. I would be more pragmatic and honestly focus my energy elsewhere.

 

Either the purpose of this AMA was to give yourself a pat on the back or you're some weirdo that enjoys living vicariously through a MD principal, but this sucks. What on Earth is the point of an AMA if you're just going to vomit boiler plate answers to the vanilla questions and dodge the good ones?

"Rage, rage against the dying of the light."

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