Advice for Asset Management Breaking Into Private Equity

Brojam23's picture
Rank: Senior Chimp | 22

Hey Guys,

Wanted to get some advice as an Analyst at a Asset Manager ($1-5B AUM) trying to break into PE. I started applying this weekend and just got a call for a first round interview. However, I am a little worried because I have very little experience with real world valuation/modeling as my previous role was more research and analytical based (Our strategies were all run by algos). I have done a decent amount of prep and feel comfortable answering basic DCF, WACC questions but I don't want my lack of work on deals to hinder me too much. I was wondering if anyone else has run into this or knows if it is that big of an issue. I've wanted to do PE for a while now and feel like I have a chance. I just need to move the conversation towards what I am capable of more than previous experience similar to PE.

Thanks

Comments (19)

Dec 31, 1969

Although I can't comment exactly on this situation.

CFA and CAIA: Don't assume that you'll have it by then unless you're already pretty far along in the process. It takes a brutal amount of time for CFA. Also, I think having both is really unnecessary and the CFA designation is probably more favorably viewed.

MBA rebranding is probably best here but at the same time I'm not sure about how easy it will be to lateral to a FO analysis position without the previous experience in an investment analysis type role (Not quite sure what biz development for private funds means here).

    • 1
Dec 31, 1969

It's going to very difficult to work on the deal structuring / negotiations side of private equity when you have no relevant experience, no modeling experience, and haven't worked in banking. I am not sure the MBA will alleviate these issues, though the fundraising route / investor relations type of path may very well be achievable.

    • 1
Dec 31, 1969

dont know why people never understand this. without pre-mba private equity experience, it is EXTREMELY difficult to get a job in pe post mba. hell, even candidates with prior PE experience are having trouble getting jobs out of bschool - it's that competitive.

    • 1
Dec 31, 1969

Thanks for the replies.

Floppity - Definitely did not mean to downplay the amount of effort for the CFA. I'm taking level 3 in two weeks and while the gmat/applications/work substantially limited my studying this round, I should be able to pass within the next few years (if not in 2 weeks). The CAIA was just purely because I had the extra time last year; I passed level 1 and I've heard level 2 is on par with CFA level 1. Plus, the CAIA is following a very similar development track as the CFA, so I thought I would prefer to pass the tests while there is a ~65% pass rate as opposed to the CFAs 40%. A few years ago, the CAIA had a pass rate of about 80%.

Biz Dev for our private funds basically means understanding and clearly articulating the investments in our private equity and hedge fund styled master funds; but, you are correct, my actual modeling experience is limited. In addition to consulting, I did work at a boutique business valuation/IB firm straight out of undergrad, but all three 1st-year analysts were laid off after 9 months (plus it was almost 5 years ago).

Do you think obtaining a decent internship during my MBA is possible, and would that constitute as PE experience? On the fundraising side, how is the growth for a firm that does it's own internally? I may be biased, but it seems to me that it would be better for me to stay in AM if I stayed on the biz dev/client service side because post-MBA I would probably be paid ~250-500k.

Dec 31, 1969

At least it looks like you're well off regardless. It looks like you have the right background except for having that PE experience so maybe networking into your first one would set you up nicely.

Way too many people on here talk about getting their CFA designation in 3 yrs and X certificate without actually knowing what they're getting into so sorry for making that assumption. It looks like you're making good use out of your time.

Dec 31, 1969

Actually, I'm glad you made the assumption. I like to see people sticking up for how rigorous the CFA is. I personally can't wait for it to be over.

I have another question. Do business development roles in PE require more technical prowess than HFs?

My primary reason for asking is that I came across a description of the Business Development Department of a company called Platinum Equity out in LA, and the role sounds like a mixture of analytics and IR. The description is vague on exactly what it entails but interesting none-the-less. Do most firms have a similar department?

I feel that the industry in general does require a stronger understanding of company strength. Since you're diving deeper into financials, it inevitably requires a deeper understanding across all departments. If it does, BD/IR might be a good fit for me because I do enjoy working with executives and clients. It just gets to me when I'm working with an account manager and the client/consultant asks a question that is slightly more technically than what is in our pitchbooks and he/she has to differ to someone else or I jump in to answer.

Dec 31, 1969

You would be much better off in banking. Search the forums for ib to pe threads there are a ridiculous number of them.

Dec 31, 1969

bump

Dec 31, 1969

I recently posted a similar question, perhaps the answer I received will be of assistance to you:

http://www.wallstreetoasis.com/forums/asset-manage...

Dec 31, 1969

thx Scott. That seems to be the feeling I've gotten from talking to people

Dec 31, 1969

bump, any advice would be appreciated

Dec 31, 1969

last bump b4 giving up on askin here

Dec 31, 1969

im guessing that no one's answered the question because you answered it yourself.

go to an ibank.

Dec 31, 1969

blue you should be the last person on this planet to give advice to someone who actually has a job.

Dec 31, 1969
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