2 year PE MF program with MBA requirement - potential exits?
Fellow monkeys,
Just accepted an offer to join a PE MF in ~2 months time. Given that this is a 2 year program (with an MBA requirement to progress to a VP-equivalent role), would want some insight on exit opps from people who've been on the same path.
Some background: HYPSW undergrad, and 1st year associate in a BB right now (will be 2nd year if I stay, so yeah, I'm a bit late to the game)
Given my undergrad, I don't think it makes a lot of sense for me to pursue an MBA for the pedigree/brand upgrade/career reset (and also opportunity cost), but a significant amount of peers have told me that the MBA is worth it (is it though...)
Personally think it would make more sense for me to jump to another PE without an MBA requirement (even if it's an MM) post the 2 year program, or even to a L/S HF (I've heard that they are keen for ex-PE candidates), or a distressed/credit fund (have some LevFin experience in my analyst years). And I guess if I decide I don't want to grind anymore I could always go to an FOF or CorpDev role after that...
Thoughts about this?
Just a quick anecdote on hedge funds. I think there is a misconception that hedge funds actively seek out people from private equity. It depends a lot more on the candidate themselves. People who generally do well at l/s hedge funds have known that it's where they want to end up for quite some time and have actively pursued deep value research / followed the markets as a hobby. PE and IB will give you some of the arguably less important skills for a hedge fund (modelling, presentation), etc.. and some of the more important skills (due diligencing the quality of a business and how to interact with management teams.
Having done all three, I can say with certainty that understanding the less tangible skills that make a great hedge fund analyst (deep value, mispricing's, having a behavioral feel for catalysts that will unlock value in mispriced securities, etc...) is not something IB nor PE will be able to teach. These are skills you develop from being obsessively intellectually curious about the markets and investing. The only people I know who have been successful at hedge funds are just that: obsessively curious.
Sorry for the long post on just one facet of what you're asking, but thought it would be worth highlighting.
Not sure where the person below worked, but many tiger cubs / other top fundamental funds heavily target MF PE associates (2+2). So the below poster might be focused on “who will do well” in L/S but to address your post, you will get looks.
Agree - other guy is just wrong about the current state of affairs. I’ve seen several reports from the big recruiters that the supply of PE>>HF candidates has decreased substantially while there is still a lot of demand from the HFs. Candidates with PE experience (especially MF) are highly coveted in the elite HF world.
No where in my post did I say he/she wouldn't get looks. Yes you will get looks if you work at a mega fund and yes you most likely will be able to exit to an elite hedge fund.
I'm saying that you're not going to move up the ranks at Viking / Tiger / Baupost / Tiger Cubs without the intangible skills I mentioned. On the other hand, you aren't going to develop very transferable skills if you aren't the obsessively curious investor they are looking for and get pushed out. I am exclusively opining on whether or not it is worth going into something that is extremely rare to be successful at doing just for the sake of it / prestige, which is something I have seen people get caught up doing.
PE sets you up for a lot of things; hedge funds don't build nearly as holistic a skill set. My key point was only do it if you really know it's your passion. Note difference between can you and should you.
FWIW I came from one of the larger multi manager/strategy hedge funds out of UG.
Out of curiosity, given that you got an MF opportunity and knew you didn't want to do an MBA why did you recruit for this MF not an other one where MBA is not a requirement? Or even UMM funds? I guess any HH would have been fine putting yourself in front of any other fund?
I can't speak for OP, but it's always easier to move downstream than upstream. If you're willing to grind it out at a MF for another couple of years, you will be highly coveted at UMM's / MM's where career track options are available, at which point you can really have your pick of fund.
Yeah that makes sense. But some MFs allow internal SAssoc/VP promotes without MBA don't they? OP could have targeted these funds I guess.
All good/common paths from MF PE...some of the more interesting exits I’ve seen have been: - family office (heard family offices of HF billionaires and ultra ultra wealthy families with flexible mandate/directing investing focus can be very cool) - exits to port cos (supporting CEO/CFO...potentially second in line to CFO/head of strategy/Corp dev) - exits to smaller firms but with niche focus
Mainly think these opportunities are a bit more exciting given some combo of more autonomy/more responsibilities/more operating skills/more focus...focus meaning having some sort of your personal path...think a lot of people exit into the roles you mentioned without thinking long term path (i.e. long term goal to stay in HF and become a PM...but if you are one of these people, above posts on all the intangibles is probs smth to keep in mind)
By the time you are through your first year, you will have a sense of what you want to do. This can include stay at that fund, if you like the people, the cultura and the area of investment. If this is the case, the MBA is a 2 years vacation which would not hurt you. If you decide not to stay there, all the roles you mentioned are accessible. Corporate Development may have some salary cut considerations to assess though but that’s another story.
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