After the IB -> PE -> -> B-School -> PE path, most post-MBA associates do not make it to the VP. So, where do the post-MBA PE associates end up eventually? Does anyone have the estimates in terms of the percentage breakdown?
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I have no data to back it up, but I'd estimate that most post-MBA PE associates make it to VP. I'm not saying your comment is wrong, but do you have a source?
From what I have seen, most post-mba PE associates do become VPs. If they are not internally promoted, they will look at other firms. Someone who has done the education/career path you indicated is most likely dedicated to a career in PE.
On a side more, what's the point of doing B-school after PE if the plan is only to return to PE. I know it's because firms boot you after 2 years, but WHY do they do that?
It seems that most firms have more pre-MBA associates than post-MBA - basically a thinning out of the herd. You do see occasionally people leave a PE firm, get an MBA and then return the same firm, but I think that is somewhat rare. The 2 or 3 and out system reduces the funds' risk when hiring someone straight out of a banking or consulting program.
I don't have first-hand insight because I'm not on the buy-side yet, but my guess is that for the post-MBA role:
a) The fund wants someone who is credentialed. The elite MBA provides that credential, which means during fundraising cycles, investors know that they're entrusting billions of dollars to a team of HBS, GSB, and Wharton guys.
That credential also means something (for good or not) to portfolio companies; when you're putting someone as young as 27, 28 on the board of a company you've acquired and in a role that the company's C-suite needs to report to, you want them to believe that guy has some legitimacy. The MBA provides that, at least nominally; in some cases it actually works against you (guys who rose through the ranks at blue-collar manufacturing firms by the sweat of their brow getting irked by the 'high and mighty' attitude of the guy from HBS).
b) The fund also wants someone who has a healthy and expansive network. An elite MBA also provides this; if you graduate from HBS, your section alone gives you 90 other people with whom you share an extraordinarily close bond. In addition, you have access to the entire HBS network. All around the globe, HBS loves to take care of its own. Same goes for the GSB, except there the graduating classes are so much smaller than HBS' that the entire class is fairly intimate.
This bears dividends during fundraising (it's easier to get money from the IBM retirement fund, CALPERS, the NYS teachers' pension, or Blackstone's FoF arm when you know someone working there), in deal-sourcing (a guy in VC who invested in a startup three years ago in the seed stage calls his classmate who works at a MF to let him know that startup would be a perfect bolt-on for one of the PE fund's portfolio companies), and in numerous other scenarios I'm getting too lazy to type out in detail.
c) The fund wants to make sure it has someone who's in it for the long haul. If you are willing to endure an opportunity cost >$500,000 in terms of foregone earnings and tuition expenses for a chance to return to your firm or another in the PE industry, you're certainly making a fairly lasting commitment.
d) The fund wants the best of the best. As mentioned before, the ratio of post-MBA associates to VPs is pretty skewed. You have to cull the herd somehow, and if you can do that by putting all the would-be-VPs through a screening process as tortuous and challenging as the MBA admission cycle while gaining all the benefits (a, b, c) mentioned above, you've got a win-win.
Very helpful as always. SB'd
The following thread says there are 5 or more associates for every VP at most megafunds.
http://www.wallstreetoasis.com/forums/what-do-most-megafund-associates-…
Granted that number includes both pre-MBA and post-MBA, I would think the post-MBA associate to VP ratio is still pretty high.
You are making too large of a leap here.
Three reasons: lack of space at the VP level; pre-MBA associates want to get top MBA and PE helps you get there; having a seasoned PE associate return with a top MBA is more meaningful and PE firms can continue with this model cuz they CAN - given the adverse nature of the selection process and "supply" of smart ppl that want to do PE.
What Happens to Post-MBA PE Associates that are Asked to Leave? (Originally Posted: 10/17/2015)
I am aware that some post-MBA Associates are eventually told that there is no path to VP for them, and are kindly asked to leave the firm. What do they do after that?
Is it possible to move over to another firm in an Associate or VP role? Or do they move on to a completley different industry?
as you said, they move to other firms or leave the industry.
How do other firms view someone like this? Do they view them as damaged goods?.... why would they be good enough for my firm if they aren't good enough for the one they came from is the mentality I would be worried about.
It's common to move to other firms as Senior Associates or if you know how to play your cards correctly and can spin a story / interview well, be a VP at a smaller firm.
Is it possible to move to another firm? Of course. Is it easy to find partner-track Sr. Associate / VP roles? Not necessarily. But there are plenty of other options: portfolio company finance, M&A or ops role, corp dev or corp fin role at a public company, hedge fund, back to investment banking, etc.
Great advice and comments, thanks!
Post-MBA PE (Originally Posted: 08/23/2012)
Can any (*with experience) shed some light on the post MBA PE path assuming you started in IB as an analyst then went to PE as an associate.
Most PE talk here regards breaking in but now that I have entered the banking industry I see that breaking into PE is the easy part...staying in PE and moving up seems to be the greater challenge. I'm curious to hear insight on career progression within a fund, how hard it is to find a post MBA PE role assuming your pre-MBA firm did not invite you back, etc.
From what I understand the field is much much harder to succeed in than analyst would like to think. And while the short-term lure of slightly better hours and slightly more money might be there, it seems like a much less secure long-term job than banking. Would be great to hear people with experience comment on this.
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