Worth Lateraling for PE?

Hi all - I’m a newly minted 2nd year at a lower tier BB interested in PE recruiting. I’ve only closed a lead left lbo financing and have been on a few mandated sellsides / buysides that went no where. I am in the process at MS for a group that I’m not so excited about (ie want consumer / TMT and this is different) that generally places better. I don’t want to do 3 years of IB but is it worth it to lateral? Maybe wait for EB or group I want? Goal is UMM PE

 

Two sides of the coin:

Yes - to get staffed on better deals so you can get looks from funds.

No - talk to your staffer about what you can do to get on some better deals. You have build relationships at your current bank so that might be the best option. Start working longer - whatever you have to do to show your staffer you want to be there

 
Most Helpful

Adding my 2 cents here.

I’m sure you’ve seen/heard of first year analysts who’ve gotten PE gigs just a few months after starting, and they don’t even have close to the deal experience you have. Closing a lead left financing and having in process sellsides still give you a lot to talk about (your role, work you did, CIM writing, would you invest in the business you sold, industry trends, knowledge of LBOs etc.). Even though it’s a lower tier BB, it is still a BB and already sets you up well to land a UMM interview. 

Additionally, if you lateral, you’ll again be the guy/gal who’s having to prove himself/herself and will get absolutely worked. You’re in a comfortable position now at your current gig and can use the extra time to recruit/network/study technicals. Additionally, I’m sure you’ve built good relationships with senior bankers in the group that could be helpful. Lastly, if you lateral and only stay for your second year, you’re going to be the person who’s had 3 jobs in the space of 2.5 years, which isn’t a great look.

IMO, stay at your current gig and recruit, you have deals you can talk about, will have the group’s support to recruit, and are set up well to land a UMM offer since you’re at a BB.

Sorry for the long post, good luck with your decision.

 

Agree with the poster here. to me, lateralling is only worth it if:

1) Massive prestige upgrade / skillset upgrade. Going from Nomura to PJT would be a pretty big deal. Or if you're going from an ECM/DCM group to M&A, I think that's worth it as well.

2) Sector shift into something you're actually passionate about. If you SA'd at a bank, got put into a group like Nat Res and have been doing mining for the last year, and absolutely despise it, your exits might be somewhat limited as well. If the right opportunity came along in tech, which is something you actually like, lateralling could be worth it.

3) Your group hates you and the writing is on the wall. If you're going to be shafted come review time, leave now and reset your image. 

From what it seems like you want to go upstream in BBs (minimal prestige upgrade) for a sector shift you're not even passionate about.

Pass for me. The brand equity you've grown (assuming you've been doing a good job so far) is not worth dumping. 

 

how about same prestige but bump in deal flow and pay? and looking to stay in banking long term

 

Pass. Kids that land the offer don't all have 3+ closed M&A deals. Also, at a lot of BBs you may "close" a deal but your experience may be limited (eg., if you're coverage and cranking on the CIM while M&A runs the model), so don't sweat it. Put what you can, include potential projects, and focus on what you did vs. what happened to the deal.

If you browse the team pages of reputable PE funds, you'll see a pretty healthy diversity of banks represented. Obviously some skew more favorably, but if you hate banking, I wouldn't throw away another year of doing something you hate for a marginally better shot at impressing headhunters.

Tons of great firms out there hiring now, so just grind the headhunter game and they'll toss something your way. For what it's worth, I also know of people who've left banking 6 months early to start their PE gig, so it could work out the opposite way that you're planning on (6 months less of banking vs. 1 year more).

 

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