Hot Take: On-Cycle Overweights the “Leftovers” from Target Schools
With the rise of PE analyst programs, many of the smartest and most strategic students at top schools are skipping banking altogether and going directly into top buy-side seats. The implication? The students who end up in IB at those same target schools are often the ones who didn’t prep early enough or weren’t sharp enough to land a PE analyst offer right out of undergrad.
A decade ago, going to a top target school → IB → PE was a well-worn path. But that logic feels outdated in a world where top PE firms now pull directly from target schools (ex. Harvard, Wharton) for analyst roles. By the time on-cycle rolls around, the truly top candidates at those schools may already be off the table. Yet PE firms continue to prioritize target school resumes when selecting on-cycle candidates, even though these individuals may represent the "second wave" from their class.
Meanwhile, there are candidates from semi-targets or non-targets who didn’t have access to PE analyst pipelines out of undergrad, but still fought their way into top IB programs - the same ones that feed the megafunds. These are clearly high-caliber individuals, and arguably more battle-tested.
To be clear: this isn’t saying target kids aren’t smart or hard-working; they obviously are. But the idea that on-cycle interviewees represent the absolute best talent available is flawed, especially if headhunters filter primarily by school brand rather than actual banking performance.
Yes, I get that firms want to tell LPs “we only hire from Harvard and Wharton.” Yes, the volume of target school candidates at megafunds makes this self-reinforcing. But the current model is not optimized for merit, it’s optimized for pedigree of school. If anything, firms should be going deeper into the semi/non-target pool at top banks, because those are the candidates who couldn't go straight to PE, but proved themselves anyway. I understand they have limited data points this early, but I think school reputation is over-emphasized compared to bank, experience, leadership, etc.
Curious to hear others' takes. Is the school prestige filter still valid, or is it just lazy sorting?
you're building your argument on made up assumptions
He’s perfect for PE!
Not just PE. He's perfect for all of finance.
Hot take: PE is beta going forward. Let's not do this shit anymore.
Did bro really take all that time to write a long ass essay on this…
Are you saying that PE is prestige and pedigree focused??? I’m shocked I tell you, shocked. No one has ever thought so deeply and profoundly. This post will go down in the historical cannons in the same way as Socrates or Aristotle.
Sorry you went to NYU but I don’t think that’s entirely why you aren’t getting girls
Heyyyy I go to NYU! It’s not THAT bad! 😟
Not entirely wrong but why take the time to write this shit
I kinda get what you're saying and agree that the very top candidates are probably going to the buyside programs out of college
But don't think this is as incremental as you think - BX has like 6-7 spots a yr for Corp PE, maybe across Bain, Vista, WP etc. its like ~20 people.
That's prob not more than 15% of the aggregate MF class size
So maybe marginally deteriorates candidates across the tippy-top but i would argue that there's always been such an oversupply of qualified candidates for ~150 or so MF spots that it probably doesn't justify expanding the interview pool / changing how things have always been. I also suspect that the analyst classes at banks have gotten larger relative to a couple years ago and the bar continues to go up as college kids get more sweaty, so most of the seniors doing interviews don't notice a difference in candidate quality
BX is nepo/diversity, the top KKR industry groups hire 2-3 combined, and WP/Bain/Vista are T2 MFs. Tippy top candidates would rather shoot for APO/BX/KKR/H&F when they are guaranteed an interview
VERY nepo/diversity for WP/Bain/Vista as well, so wouldn’t even twist those as “standard hiring” for MF PE analysts:
Source: I am one of the above (ignore title lol).
OP needs hobbies and medical help
The way you guys describe “tippy top candidates” who are literally college seniors with zero work experience is certifiably insane.
They are highly accomplished good students who go to good schools, but yall wanna suck them off as if they’re god’s gift to earth. Wtf.
Two kinds of haughty bullshit here:
Which Rubenstein interview are you talking about? Would love to give it a listen
All alts investment is is raising money. No one’s giving money to someone from Rutgers vs someone from Harvard, ceteris paribus. This general thinking drives all decision making in finance.
Congrats on Penn State!
Sorry man, the Ivy kid in the EVR M&A analyst program can read through a CIM just as well as you can. I'm not sure what being "battle tested" has to do with being a good PE professional, but surely this EVR Ivy kid will be just as "battle tested" after their analyst program concludes. Meanwhile, while they were in College, they likely played a sport/did un-finance related academic research/wrote for their newspaper/a variety of extracurriculars that will likely benefit them more in the long run than somebody who is better at paper LBOs because they grinded them all throughout college instead of exploring new things.
Im sorry but this reads like a freshmen/sophomore who never met anyone in finance. They are the same set of ppl. The ivy kids at EVR M&A are also finance nerds whose extracurriculars consists of the 5 finance clubs on campus and spent a good amount of their senior years grinding PF. Most of them also recruited for MFPE analyst programs for both SA and FT as well but just didnt work out.
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