Advice for Asset Management Breaking Into Private Equity

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.


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Comments (20)

Dec 31, 1969 - 7:01pm

Transitioning from AM to PE (Originally Posted: 05/21/2013)

I'm hoping to get a few experienced opinions about transitioning from AM to PE through an MBA.

I have been working in the business development and client service department for a top Asset Management firm for two years focusing mostly on our private funds. Prior to this, I worked at a boutique consulting firm for a little over a year. I was recently accepted to a top 10 part-time MBA program and while I fully understand the additional hurdles of a PT program vs. FT, I felt that it was a better fit for my career.

Once I get my MBA I would like to be working in PE; however, I am unsure of the best path to get there. Capital raising (CR) is the most logical path, but I would like to be more involved with negotiations and deal structuring.

As you climb the corporate ladder in large PE shops, do CR positions ever become more hands on with the deals? Also, would this type of transition be a completely rare occurrence? I am contemplating leaving my current gig and grabbing as many internships as possible after my first year. Also, I should have the CFA and CAIA completed by then.

Any additional advice would be appreciated as well.

Best Response
Dec 31, 1969 - 7:02pm

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).

Dec 31, 1969 - 7:03pm

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.

Dec 31, 1969 - 7:05pm

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.

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Dec 31, 1969 - 7:06pm

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 - 7:07pm

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 - 7:10pm

IBD or AM to PE. Ability to go from AM ---> PE? (Originally Posted: 10/28/2010)

Hey guys,

I have an entry level opportunity in portfolio management with a top group (think PIMCO, BlackRock, GSAM level) and an invesment banking analyst opportunity at a MM firm in the real estate group (big player but mainly equity offerings).

Long-term I'm interested in private equity at this point cause I think the mix of financial skills and strategic thinking would suit me. Don't think I want to just do Real Estate private equity though.

My question is, would it be possible to go from AM to PE later on? Or should I just do the IBD thing and try to get out as soon as possible?


  • 4
Dec 31, 1969 - 7:13pm

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

Dec 31, 1969 - 7:14pm

Best route to PE from Asset Management?? (Originally Posted: 07/08/2010)

Looking to get into PE industry, currently a junior research analyst at a AM (not a big fan of the mkt volatility and really enjoy digging deep into business model). I'm aware the typical career track for PE is 2 years in IBD, 2 years PE then MBA and then PE again. Was wondering what path should I take to get into PE side. I'm thinking MBA at the top 7 (CBS is my first choice due to location)
Just some background, I'm 25 and have been on the buy side for 3 years (got really lucky landing this job during an internship as undergrad), and I'm more of a generalist here with coverage on tech + retail, so I don't really have any operational or industry specific skill (no too sure if this is a disadvantage??) But have the learn the ropes with extracting crucial info from speaking with CEO/CFO, trading aspects of the market and fundamental analysis.
Thanks in advance for any advice

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