Top BB IBD vs LMM PE (non traditional background)?
Which would you take top BB IBD to re-recruit for PE (4 years of non banking experience) or LMM PE from a non traditional background?
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I'd take LMM PE for sure
IMO, depends on if you see yourself building a career at the PE firm.
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Top BB IBD --> tough hours, but you'll open it up a ton of options including MF PE, MM PE, LMM PE and F500 CorpDev. If you care about WLB you'll probably end up at LMM PE or CorpDev after your 2 hours. IB can really, really suck but if you're MF/UMM or bust (which it doesn't seem like you are) then that's the way to go.
LMM PE --> more manageable hours, but life as a PE analyst can be pretty mind-numbing. All the admin work that associates don't want to do gets pushed to you, and then often take care of all the modeling, etc. So you'll end up being basically an assistant to them for 2 years. Then if you try to recruit for PE, you'll find that a ton of places look for IBD analysts only, since they have a very structured training program that PE firms trust. They don't always trust PE analysts to get a thorough training experience at a 15-person shop. I'd say MF PE, most UMM PE and F50 CorpDev would probably be closed off to you. You can still probably find a good spot at a MM/LMM PE Shop or a PE-backed CorpDev. HOWEVER, if you manage to find a LMM PE firm that will for sure promote you to ASO and has a strong track record of promoting up the ranks, that could be your golden ticket.
Curious what is the training program you talked about? If it's modeling you can certainly take courses and learn it through work. Am I missing something here? Thanks.
By "training program", I mean the countless reps you'll get working on models for live deals, pitches, etc. Over time you get really good at doing them quickly and correctly and this is what PE firms really value from IB analysts
Right, but why can't you gain the same skillset from a LMM PE shop? You will be constantly looking at deals and modeling out opportunities, but from an investor's perspective which should be more valuable and closer to reality.
i think what he's implying is that a lot of the times a PE analyst at small shop won't really be touching the models, the associates will hence the "assistant" phrase. So in his scenario the PE analyst a lot of times doesn't get those countless reps a 2 yr IB analyst would be getting. Of course if the PE shop does have analysts getting extensive modeling experience then that point would be moot.
1) It’s a perception thing. Like a lot of things in the industry: “it’s always been done this way”
2) Because of the nature of the work you’ll just go through a lot more reps in 2 years of IB rather than in PE. It will also be more varied (pitch, deal, lbo, dcf, merger analysis, etc.)
Thank you this is really helpful! Is it possible to move to MF/UMM PE from BB IBD with 4 years of prior finance experience but restarting as analyst? Or is it better to go directly to LMM PE as an associate?
1st scenario is def possible BUT there's a strong possibility that you decide after a year and a half that you don't want the hours/stress of working at a MF/UMM and then you recruit for LMM/MM PE and end up two years behind. think carefully before making that choice. you'll see a ton of posts on this website talking about the hours, stress, and admin work at a MF PE shop. very rarely do you see bad things written about LMM PE. when it comes down to it the biggest downsides of LMM PE are comp and prestige but i really have not seen anyone ever complain about that.
Thank you! How possible is it to lateral from LMM PE to UMM PE as an associate? And would it be an issue not having prior IB experience once in PE?
Depends on how low the LMM PE group is. What is most recent fund size?
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Oh in that case take the PE job if that’s what you want to do in your career.
Would lateraling to UMM be possible?
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