Value of MBA for PE/GE
What is the industry view on MBA for advancement in PE/GE? Any idea on the shops requiring MBA to advance vs shops that direct-promote? For people coming from a traditional background (2 years IB/PE analyst, 2 years PE associate, 2 years MBA), is it more common to go back to your PE firm or are you expected to find another firm for post-MBA roles?
I'm struggling to see the value of an MBA for people already in the industry. Is it really worth the price tag + the opportunity cost from loss of income? I suppose it's not in your control if the PE firms are requiring the MBA.
I'm a bit hazy on what the post-MBA path looks like in general. Do you start as a senior associate or VP?
I realized I asked a thousand questions, but would appreciate insight to any of the above.
Not required at many funds. For the funds that don’t require it’s usually 4-5 years to Post mba equivalent role. For funds that do require it, it’s 2-3 years assoc + mba for post mba role.
Titles can vary eg senior assoc at BX, VP at Warburg, principal at kkr. The key point is that you should be making 400-500k cash and 2-4m carry and have at least one layer beneath you who are associates hired out of banking programs.
Thanks for the insight. To clarify, is that 4-5 years after banking? So does this mean 2 extra years as a senior associate before being in a post-MBA role. Looks like the MBA is more appealing now since you get credit for the 2 years at least.
That's right. At a lot of firms it's either two more years as a Senior Associate making ~$350K per year while working 80 hour weeks before getting promoted to VP, or spend ~$200K on business school for a 2 year vacation and then come back into the industry as a VP. In either case, you get to VP at the same age so I personally would take the 2 year vacation even at ~$900K of comp loss + opportunity cost. If you're planning to stay in PE/GE, two years of your life in your prime is worth way more than that in my book. And if we're being honest after tax that opportunity cost is more like $500K.
Any idea on the specific firms that have this tradition?
What does 2-4m carry mean? The amount you’ll get during VP years or within a fund cycle (5-10 yrs)
Iusto cum deserunt libero expedita. Quae accusamus aut architecto suscipit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...