Small PE Firm or BB IBD
What is better? I want to end up in PE, but don't know if starting with a PE firm with under £250 m AUM is too small to start off, or if its better to have a BB brand name in a couple years time...
I had an offer from EB, BB and MM PE ($8-10B). Ended up choosing BB because of the brand name and personal belief that banking would give me wider exposure to different transactions.
EB? Whats your game in the long term though? Are you planning to be a banker?
Elite boutique, I want to be in PE long run, but thought that banking will help me prepare better for PE
Wrong choice
EB? Whats your game in the long term though? Are you planning to be a banker?
I've been at a lower MM PE (~$1Bn) for about a year and just accepted an off cycle BB IBD offer. For me, and like Kimchi said above, it came down to wanting broader exposure and a brand name. For perspective, I was invited to interview with five or six banks and just one other PE shop over the past few months. I made it to final rounds/super days for four of the banking processes and received two offers. On the other hand, I didn't make it past the first round of the one PE process. While I can only offer a small sample, starting in PE may not negate the importance of a couple years in banking.
Are you planning to be a banker or someone in PE?
Are you planning to be a banker or someone in PE?
I would consider the PE role if it is at a larger fund though. Based on your current options, I would say BB IBD.
If you want to be in PE, then go into PE...
IB would provide a better "training ground," if you will. People realize you won't know shit when you come in, not sure if that's the mentality for PE, especially smaller PE shops where they may expect you to hit the ground running.
If you can't the latter, stick with IB. You don't want to set yourself up for failure, get frustrated, or even worse, getting fired because you are not performing (no training).
As I have said dozens of times on here (you can go through my posts for explanations), if you have an opportunity to go to a well branded PE firm with significant assets that does a lot of deals and a formal analyst program, go do that 1000% of the time. Else, go BB. A L250 AUM firm probably isn't going to cut it so I would go BB. Work your ass off for a few years in any of these environments, and dedicate yourself to learning, and you'll become a spartan regardless.
I am unfamiliar with the British PE market, so unfortunately, my advice may not be as applicable. I started out of UG at a similar size shop, and it was a good experience, but the shop was extremely lean and I found the professional development aspect to be lacking. As @Whiskey5 said, they would probably expect you to hit the ground running, which may or may not be the best situation.
If you joined the EB, you would stand a much better chance at getting a position at a larger fund a few years down the line. It's easier to go down market, in terms of deal size, then up market. Smaller funds see value in hiring ex-Associates from larger, brand name firms and it is much more difficult to move from a shop focusing on $100MM EV deals to a shop focusing on $500EV deals.
I would recommend you join the EB, and work to get a more senior role at a PE fund following your stint in banking. However, the hours can be grueling in IB, and you should take into account what your career goals are. If the fund you have an offer with does deals that you would like to focus on, and it's a career track opportunity, perhaps you should consider taking it; although, most people would recommend that at such an early stage of your career, you can never know what will be interesting for you 5-10 years from now, and would advise you to take the EB role.
Best of luck and keep us posted!
Thanks a lot guys. Still waiting to decide, I have an internship with the BB lined up before my time with PE so hopefully can decide off the back of that.
Thanks a lot guys. Still waiting to decide, I have an internship with the BB lined up before my time with PE so hopefully can decide off the back of that.
Dude are people here in high school? Banking for sure. It's extremely hard to move up market especially at a 250m fund which is on the very lower end, while good banks have a funnel to get kids into megafunds and/or multibillion dollar shops, as well as top business schools. Source: did 2yrs at BB IBD and 2 years as a PE associate
Not everyone wants upper MM / Mega fund experience. Some prefer lower MM.
Agreed, but it's not a bad idea to do MF or Upper MM then go down market to Lower MM if larger deals aren't your thing. Why kill off your ability to move around the PE market by starting at a super small PE fund? How would one even know if Lower MM is where they want to go for sure without having done banking or private equity already? If you don't know for sure you want to do Lower MM wouldn't you say it is better to start off at a larger fund and move if you have to?
Not in Highschool, leaving undergrad with a few things lined up.
In the UK, I would go for BB IBD. If you want to end up at a megafund or decent MM shop, they do the vast majority of hiring out of BB/EB, just because it's an easy way to screen for technical competency.
From a practical perspective, BB IBD is a good training ground especially if you can get exposure to PE transactions. Experience you get at a £250m AUM shop is not necessarily going to be as relevant to the larger shops because the investment process is quite different in terms of sourcing, participating in auctions, financing, DD process, etc.
Thanks guys. Finally what can I do to guarantee I get a spot in IBD after an internship? in a financial sponsors group but I study non-finance subject and to be honest i know not that much and am not hugely proficient in excel. without dropping hundreds on wso training courses what can i do?
easy, if you want PE you need to go PE...
Wrong (see my thoughts above)
I see going to a BB with name recognition as a career hedge. It minimizes your downside because if you want to go into another industry, it helps to have a name on your resume that people at least recognize.
Unless you want to do lower MM PE for the rest of your life, do the BB which will you give you a better variety of exit opps.
I worked at a small ($350 AUM) PE firm during the summer before my senior year. After the internship, the fact of the matter was that the firm could pick any IB guy and he would know exactly how to do my job before I even began training materials. Although that was not a total shocker, it led me to pursue IB following that summer analyst stint for the sole reason that branding/formal training mean everything. In short, you have to learn to bale the hay before you go searching for the needle in the haystack.
I know many stories from my friends about switching PE with IB and vice versa. If you see yourself In PE in LongRun then go in PE what are you waiting for? However, if you think that you're not well prepared for it, then you probably better star in IB. I started in PE without any IB experience and I'm glad I had an opportunity like this because you have bigger exposure, better experience (you're involved in whole deal process, while in IB you make pitches and other stuff 24/7, that's job for a dumb chimp, really). And you will be able to switch PE with another PE and if you want get into IB without any difficulties, justifying you decision like "Guys, I moved out from PE to IB because I need more drive and ardor. That's it. Hope my comment will help you and you will make the right decision. GL
Only here to praise the picture.
No Name PE vs. BB IBD (FT) (Originally Posted: 08/02/2014)
Think no-name PE with 5 employees. Hours would be way better, comp factoring cost of living would be better. BUT, BB with have the brand name and open more doors in the future most likely. Would you ever take the PE if that's where you want to be in 15 years (partner at a boutique/mm PE)
Take the BB, from there you can go to a top MM or MF if you're good and you're lucky. What's the AUM?
Take the BB.
It'll offer up more opportunities in the future.
You'll learn more about PE at the small shop. You will learn very little useful information at the BB. So it depends on your timing and initiative, IMO.
Really?
A 5 PE shop will likely give you complete bS work like updating database, conflict checks, and other stupid admin work. At least at the BB you'll get the best 2 years work training and a strong foundation for the future - take the BB offer
This shouldn't be a question.
wait lol.
Is it really no-name or just no-name to you? Did a partner at a respected fund split off to form this? If PE is your goal and the team knows what they are doing, I don't get why you would want to fix printers for 2 years.
Top tier 1 IBD vs small PE fund (Originally Posted: 11/20/2016)
Received an IBD London offer at one of the top three tier one investment banks (GS/MS/JPM) and in the meantime have been headhunted for a fairly small MM PE fund located in Mayfair, London (around 50 employees). The fund has a portfolio of 70-100 companies valuing at around $2-3b and seeks to invest up to $300m in total per year, and up to a maximum of $100m per company. Essentially, it is a UK regional PE Fund focusing on small to medium sized businesses, specialising in supporting management buyouts. Most the people at this fund have come from big 4 corporate finance. On the downside, they said that I shouldn't expect a salary as high as my IBD offer or any of the more well known MM or MF PE funds.
Any advice would be appreciated.
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