Alternative routes into PE

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Aside from IB (and people who do PE right out of undergrad) where do the most private equity people come from? Is corporate development the next most common transition?

Comments (119)

 
Jan 30, 2016 - 9:37pm

msc0702:

How common is the move from leverage finance or mezzanine finance to private equity?

Ton of PE guys were ex-lev fin bankers as analysts; especially in more credit focused shops (like turnaround and distressed PE shops). On mezz shops, this is usually post IBD stints, so I would think more difficult from mezz to PE as a lateral hire but definitely still doable; just maybe not as likely going from 2 yr lev fin analyst stint to PE associate standard path. @msc0702

 
Feb 1, 2016 - 5:15pm

Commercial banking is another avenue. Much more common to see ex-commercial bankers in MM firms that utilize regional banks as their primary source of debt financing. Not only is the ex-commercial banker's relationship with his/her former employer of value to a PE firm, for a niche PE firm specifically, an ex-commercial banker brings valuable relationships and a knowledge of the focus industry that can enhance deal flow. These guys are essentially salesmen...

 
Feb 9, 2016 - 10:06am

straight cash homie:

Commercial banking is another avenue. Much more common to see ex-commercial bankers in MM firms that utilize regional banks as their primary source of debt financing. Not only is the ex-commercial banker's relationship with his/her former employer of value to a PE firm, for a niche PE firm specifically, an ex-commercial banker brings valuable relationships and a knowledge of the focus industry that can enhance deal flow. These guys are essentially salesmen...

Link or it didn't happen.

Play the long game - give back, help out, mentor - just don't ever forget where you came from. #Bootstrapped
 
Mar 30, 2016 - 5:09pm

I don't think I've ever seen someone go straight from commercial to PE. Commercial banking provides a fine middle class American dream, with a decent salary and a 9-5 lifestyle on most days, but it basically a salesman going door to door to meet monthly quotas.

The best route is likely Commercial Banking at a shop that has an IB arm, then to PE. Comerical > IBD (Corp. Banking > PE. This is still very difficult.

 
Feb 12, 2016 - 6:50pm

I just found some old threads where people said that you could move into energy PE from project finance... thoughts? I called a project finance guy and he said that technically project finance is a type of commercial banking, so is it an exception?

 
Feb 15, 2016 - 7:45pm

Yes, that's correct.

The path in the UK is usually: Big4 Audit > Big4 CorpFin > MM PE.

Sometimes people break into CorpFin straight out of uni, but the above is more common. Would add that some people break in straight after they're ACA qualified and skip the stint in CF altogether. Same path applies for breaking into IBD.

Array
 
Feb 15, 2016 - 1:28pm

So, recently admitted to a top-mba(HBS). I want to work in PE but have no prior finance experience. I heard that it is really tough to go MBA>IB>PE. Is MBA>MBB consulting>PE more viable?

Or is it more likely that PE is not a realistic career goal for me at this point.

 
Best Response
Feb 15, 2016 - 1:43pm

Lots of doorknobs in this thread treating PE as one uniform group when in fact, there are many layers to the PE landscape.

Of course, if you focus on top-tier PE firms (Blackstone, KKR, Apollo, Bain, etc.) the only paths to there are from consulting outside of IB.

However, the farther down the food chain you go, the more unstructured the hiring process is and the more likely people from non-traditional backgrounds (commercial banking, Big 4 advisory, etc.) can break in. There are more firms than you can imagine with sub-$500M in AUM that are plenty busy doing lots of regional and middle-market work and almost hire entirely through local relationships.

Think about, what does a smaller local player want to hire? Someone already embedded in the local deal scene or some know-it-all from Wall Street that doesn't give a shit about the community? (An exaggeration to make a point) There are a lot of qualitative factors that people don't consider on this board.

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw
 
Feb 17, 2016 - 10:18pm

LeveragedTiger:

Lots of doorknobs in this thread treating PE as one uniform group when in fact, there are many layers to the PE landscape.

Of course, if you focus on top-tier PE firms (Blackstone, KKR, Apollo, Bain, etc.) the only paths to there are from consulting outside of IB.

However, the farther down the food chain you go, the more unstructured the hiring process is and the more likely people from non-traditional backgrounds (commercial banking, Big 4 advisory, etc.) can break in. There are more firms than you can imagine with sub-$500M in AUM that are plenty busy doing lots of regional and middle-market work and almost hire entirely through local relationships.

Think about, what does a smaller local player want to hire? Someone already embedded in the local deal scene or some know-it-all from Wall Street that doesn't give a shit about the community? (An exaggeration to make a point) There are a lot of qualitative factors that people don't consider on this board.


This exactly.
 
Feb 18, 2016 - 10:45pm

No way. You think a $350mm PE shop in, lets say Dallas, gives a shit if you care about the community? If you're a commercial banker in Texas? Seriously, think this through. PE seniors (I'm at the VP level and in charge of hiring associates) give a shit about 2 things: (i) someone that can get shit done well and timely and (ii) someone they can get along with. The first part is extremely important, and is very risky. PE shops don't have the ability to take a chance on someone. If I'm hiring 2 associates a year, they need to kill it. I can't take a chance that one or both of them will suck. Deal teams are way too lean. And whether it's true or not, given that most PE guys came from IBD background, we're going to prefer guys with that background as well because we know it's a much safer bet than anything else and don't want to take a chance on a Big 4 guy no matter how brilliant he may be.

It's sad but true. Put yourself in my shoes. Two guys, both seem brilliant, one is Big 4 and one is IBD. I'm going to go with the IBD guy every time. At the minimum, I know he has no qualms working 90 hours a week if needed.

 
Feb 19, 2016 - 3:55am

I understand this mindset. However, it's entirely dependent on the fund. Lower-middle market funds that operate in a niche market segment are more prone to straying from the conventional IBD-->PE candidates. The partner in charge of hiring at my fund (a banker himself for 10+ years) has stated his preference for not hiring associates from IBD.

That's not to detract from your two hiring criteria. We only hire based on inside referrals, which mitigates the risk of hiring some piece of shit associate.

 
Feb 19, 2016 - 9:47am

I'm much more of this attitude. I didn't get into PE through IB so I don't have that personal bias but I'll hire an IB'ER 9/10 times for a generic associate role, and I'll leave aside niche products like O&G or HC where a specific engineering or science background may be helpful. Like everything you've said, deal teams are too lean to take a risk and I know that a decent performing IB analyst has the skill set to at least be good, so from the employer's perspective there's isn't much reason to take a risk on someone outside of that. It doesn't mean I haven't hired outside of IB and it's worked out but I play the odds and the odds tell me that someone who's been an analyst will almost certainly be able to perform the job and will hit the ground running. If we're looking for more niche roles, like someone to be more operational we'll look towards consultants, and I'm more apt to bring on a Big 4 type if I know them, have worked deals with them and thought they were top notch (after you ask to circumvent the NDA and contract about poaching employees...). Honestly I'm more likely to hire a non-IB person into a higher level role because they have some sort of professional background and accomplishments that would fit us and/or a need we have.

I'm not saying that non-IB'ers never get hired into PE associate roles, but as someone who has been in the lower MM to MM for a while, the vast majority of the people I know in PE come from an IB background, especially for the last 10-15 years.

 
Dec 21, 2016 - 7:12am

My path:

MBB -> bank long/short prop desk -> $40Bn+ PE fund -> SWF PE

Very, very unusual though.

Also, I have seen one case of Corp Dev -> HSW MBA -> PE MF and one case of Corp Dev -> PE MF, though 70% of the investment professionals I've met there had banking background, ~20% MBB, ~10% other PE funds/etc.

 
Dec 21, 2016 - 7:13am

Post-MBA path to PE (Originally Posted: 12/04/2015)

All,

The path College -> IB -> PE has been discussed to death and it is clear that right after college, a two-year investment banking stint positions you best for private equity.
Likewise, a (direct) post-MBA PE position is (generally speaking) only for the students at top-tier schools who have prior PE experience.

What has not been discussed often, is the best path to PE if you do not belong to the two groups mentioned above (read: 90% of the MBA students, even at top schools). Say, for example, that I want to get involved in PE long-term. What is the best career path to take when admitted to a top business school? (Disclaimer: I am in this position right now)

I believe the following options are available:

  1. INVESTMENT BANKING ASSOCIATE
    Many people on this forum claim that the chances of IBD Associates / VPs moving to the buy-side are slim. I have seen a few respected members (mergersandacquisitions78) (Dingdong08) comment that this transfer does happen from time to time. Could any of these people please elaborate? Furthermore, I assume that most of these PE shops are financial / modelling focused (vs operational).

  2. MANAGEMENT CONSULTING ASSOCIATE
    Another option that has not been mentioned often is post-MBA MBB consultant to PE. I would assume that especially for operation-focused private equity firms, hiring experienced MBB guys with industry knowledge could be valuable to the firm, perhaps even more so than Investment Banking Associates / VPs. Would love to see more information on this.

  3. INDUSTRY / F500 MANAGER
    This option has not been discussed often, and I would assume that the switch from Industry / F500 to PE hardly ever happens. It can be argued that professionals with industry knowledge could be valuable for an operation-focused PE firm as well.

Could anybody shed some light on this? I assume the move from IBD MD and MBB partner to PE does happen quite often, given it is mostly relationship based on the higher levels. A few LinkedIn searches seem to confirm this. The sad truth, however, is that most of the people will never make it to MD / Partner. Is there any hope for MBA students who have not taken the traditional Ivy League -> IBD -> PE path?

 
Dec 21, 2016 - 7:14am

I don't really have much substantive to add to this thread other than that 1 is my plan and of the people I've talked in PE they have all stated it's definitely doable, you just need to have a quick learning curve and be looking to make the switch almost immediately. Also that since there are less slots its more competitive (meaning that MM PE shop that hires Stifel analysts may only hire BB associate level hires).

Definitely interested in hearing more experienced thoughts on this.

 
Dec 21, 2016 - 7:15am

I worked as a structural engineer and heavy industrial construction superintendant in an engineering consulting firm for three years prior to doing my MBA. I leveraged this experience networking with an infrastructure private equity office and was able to land a job in infrastructure private equity directly out of the MBA.

I understand you're trying to be MECE with your points above, but you don't necessarily need to set up a play to go for the three-pointer - sometimes you find yourself open and free to take a shot.

If you're set on PE then plan #1 and #2 can become great pivot points (especially if you can get a good brand name stamped on your CV), but nothing is stopping you from trying to get into a PE shop directly out of school.

My 2 cents.

Double Doubler
 
Dec 21, 2016 - 7:17am

Full time IBD/MBB recruiting is usually September/October for the following summer full-time starts. I'm not sure when PE recruiting is to be honest. The process of my office doesn't fit the typical schedule and so I got hired in August, started in September and worked the probationary period (full-time) while finishing the second year of my MBA (took all my courses in the evenings).

I don't see why you couldn't go through recruiting for IBD/MBB in the fall and try to land the best gig possible. Then also follow the recruiting process for PE and if you get a better opportunity just renege on your previous offer. I know it goes against the honour code, but you don't owe any of these companies and they won't show much compassion if you don't perform either. You owe it to yourself and your family to secure the best opportunities possible and if they're reasonable they'll understand that. There are ways to act professionally and be a gentleman about it - you're not necessarily burning bridges.

Double Doubler
 
Dec 21, 2016 - 7:19am

Career Path to PE/HF (Originally Posted: 12/03/2008)

I'm currently considering two positions:

Tech-focused middle-market Ibanking at a small established boutique firm
BlackRock Portfolio Analytics Group (PAG)

I eventually want to make the transition into middle market or early-stage PE (not necessarily technology). I've heard banking is normally the place to start. However, due to the nature of the ibanking firm, I would have little exposure outside of its niche focus. Also, because they deal primarily with equity funded start-up tech companies (often venture-backed), I am uncertain how much modeling/valuation experience I would get and how much exposure I would get to complex debt structures. Deal flow over the next few years may also be an issue with the current state of the economy. On the flip side, I know that saying I've done IBanking still gets me somewhere, regardless of how much I actually did/know.

At BlackRock, I would have the name recognition and the potential to be promoted within to another type of Asset Management (they have alternative investment groups as well). Therefore, after 2-3 years, I may or may not have to look for another job, where I would have to in the ibank. However, the transferable skills from PAG to traditional PE are probably minimal.

In your opinion, how difficult would the move from BlackRock be into PE, later in my career. Also, if not into PE, which one would make it easier to get into a HF? Would I have to get an MBA to make the transition? I have summer experience in a mid-market PE firm.

 
Dec 21, 2016 - 7:20am

Geez kid,

You need to be a little more laconic in your posts. I currently work at a fund. BlackRock is the better bet in this case. The demand for i-banking backgrounds has suffered abeyance until further notice. (At least 5 years) Good luck.

"In the end, there can be only one..."

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time
 
Dec 21, 2016 - 7:21am

Alternate route to energy PE (Originally Posted: 03/20/2011)

Hey guys,

As I've mentioned before I'm a junior looking to enter energy infrastructure PE in the next 5-7 years, and although I have the opportunity to go the traditional energy banking + MBA route, I'm more interested in the industry itself than the aspects involved in IBD. I understand that the corporate strategy/development route (via Oil Majors) is more difficult/circuitous and less lucrative but it would be preferable given my interests. Long story short, I heard about a very selective small dual degree program offered concurrently between the Colorado School of Mines and IFP School (French Petroleum Institute). The Double Masters program in Petroleum Econ and Management seems to place very well into Corporate Strat. and top oil majors.

http://econbus.mines.edu/Dual-Degree-in-Petroleum-Economics-Management
http://www.ifp-school.com/Petroleum-Economics-and-Management/38/114/117

My question is really to the energy guys on this site, although it's a Euro intensive program, do you see guys with these kinds of masters degrees, and more importantly, how hard is the path through corporate strategy to PE when it comes to the energy space?

Thanks,

‎"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."
 
Dec 21, 2016 - 7:22am

I don't know enough about that program to comment on it. But as far as how hard the path through corporate strategy to energy PE is, well, take a look at the management bios of First Reserve, Riverstone, Lime Rock, etc... How often do you see non-financial services backgrounds? Not that often, right? There's your answer...

 
Dec 21, 2016 - 7:24am

For energy PE your best bet is energy finance, meaning, IB (think Barclays and JPM, big players in Houston IB). An engineering focused job plus MBA can land you into PE, but in an "engineer" type role (still not a bad gig) where you can help analyze the operational aspects of energy companies.

Joining as a financial analyst in big oil won't do you any good. Commodities S&T is not as removed but still specialized in the sense that it's not PE related.

If you are interested in industry but not finance, then I wouldn't recommend PE for you. Your best bet is geology or petroleum engineering, then join an integrated oil firm (XOM etc) where you will be a revenue generator, not a cost center. Being a geologist, chemical engineer, mechanical engineer, electrical engineer, etc. will be very lucrative and you can even have a great work/life balance like a 9/80 schedule. You also have opportunities to work on a rig for two weeks then off for two weeks. Those roles are far more hands on and industry oriented. IB and PE are purely finance, and industry knowledge isn't as prized as financial knowledge. So by the end of the day you should ask yourself whether you want to do something industry or finance.

 
Dec 21, 2016 - 7:25am

@ electriclighto: Thanks for the advice. I'm not an engineer, although I started university as an engineering student, so even though I'm interested in this rather quant/science oriented graduate business program, I'm still more financially than operationally motivated.

I would never be a "financial analyst" haha, I'm looking for something of comparable selectivity (sp?) to IBD, which of course I may still pursue.

The main question is what is best for energy INFRASTRUCTURE PE? Of course PE guys dealing with portfolio companies, LBOs, etc. are likely to be bankers as they're focusing on the value of firms. I, however, would like to end up at a team like First Reserve's Infra team, Denham, or Highstar's Infra. where I could invest in midstream and upstream ASSETS over long holding periods.

My logic might be flawed, but it seems that the complexity of deepwater, transmission, and midstream assets would mandate a more highly technical and broader knowledge base than would be demanded by traditional PE roles at companies like Limerock, Riverstone, First Reserve (PE), NGP etc.

‎"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."
 
Dec 21, 2016 - 7:26am

I would venture to say those in infrastructure PE are still in PE, as in those investments would need to be valued and exited. The underlying knowledge for these types of skills can be found in engineers with experience in that particular industry but my best guess is that those groups still recruit from traditional finance roles like IB. Truth is the particulars of industry (like deepwater, transmission, and midstream assets) only need so much knowledge - like fee structure, operational costs, contracts, location, competition, etc. - and not anything intensive like how a blowout preventer is designed or what not, which makes it easier for, say, energy IB analysts who have learned these things on the job to be targets for those firms.

 
Dec 21, 2016 - 7:28am

Alternative Path Into PE/Buyside (Originally Posted: 05/07/2014)

Got a couple of questions I would appreciate some assistance with.

  1. If I can't get into a BB/quality boutique for IBD do I have no hope of getting into PE?

  2. If I can get into a top tech firm eg Google/Facebook/Apple in a strategy/operations/sales role will this help for PE recruitment or do they strictly want bankers?

  3. What are my options if I go to a tech firm in a strategy/ops/sales type role straight out of undergrad?

Just trying to plan out alternative pathways. Any help would be greatly appreciated.

Thanks!

 
Dec 21, 2016 - 7:35am

Keep trying to break in.

Biz dev type roles at a Google/Facebook are for, as others have mentioned, ex-banker/consultant/PE types. You'd probably have a better chance of getting that job as a Google engineer than as a Google...IDK, whatever their business rotational thing is for fresh college grads. (That being said, marketing at Google would be pretty sick. their ad team is pretty legit).

 
Dec 21, 2016 - 7:36am

LBJ's hair:

Keep trying to break in.

Biz dev type roles at a Google/Facebook are for, as others have mentioned, ex-banker/consultant/PE types. You'd probably have a better chance of getting that job as a Google engineer than as a Google...IDK, whatever their business rotational thing is for fresh college grads. (That being said, marketing at Google would be pretty sick. their ad team is pretty legit).

If you work in corporate/business development or a sales/business strategy role at Google/Facebook/Apple can you move to the buyside?

I've seen people at these firm start off in another role (on the business side) and lateral to corp/bus development (without a consulting/banking background) and am therefore curious.

 
Dec 21, 2016 - 7:39am

Path to HF/PE Funds? (Originally Posted: 03/01/2008)

Hey All,

This question is for anyone familiar with how the recruiting process for post IB Analysts looking to move to a hedge fund or private equity fund works. I'm a junior currently, so this is a long way away, but I'm curious as to how the system works. Specifically, I haven't ruled out an MBA, but if the market is right I would prefer to move on to an HF/PE firm after finishing my analyst stint. It seems like these companies won't have a regimented recruiting process like most banks, and I'm wondering if those who have been through the process can elaborate on when they started looking, how they got interviews, etc. etc.

Thanks in advance!

 
Dec 21, 2016 - 7:43am

Generally easier to do BB --> anything than MM --> anything. Unless your MM shop has close contacts at certain PE firms.

People tend to think life is a race with other people. They don't realize that every moment they spend sprinting towards the finish line is a moment they lose permanently, and a moment closer to their death.
 
Dec 21, 2016 - 7:44am

depends.

the good part about some good boutiques / MMs is that you work exclusively with M&A deals, which is what most PE shops look for. A lot of the times if you are in a BB, you might not even get to close (or maybe even touch) a M&A deal your first year. However..if you are in GS or ms then it's a different story because the names will get you the interview anyway

 
Dec 21, 2016 - 7:46am

The best advice I can give you is to take a look at the MM PE shops that you are interested in working at and look at the backgrounds of their associates. MM PE shops almost always list their full members with bios. They also seem to have a habit of hiring from the same banks/groups. Some always seem to get their associates from BBs while others look to the prevalent MM banks.

CompBanker

 
Dec 21, 2016 - 7:47am

Route to PE (Originally Posted: 02/15/2007)

A Private Equity Senior Associate at Citizens Capital came to my class today to speak with us. He told us about his unusual route to PE.

First off he explained that in order to join PE you usually must have had at least 2 years experience in IB. I knew this already since that is pretty much the standard.

However, he told us that he got to this position by doing an internship during his MBA. They offered a job and he took it. Now he is 25 making 200k+ a year with a good bonus.

Has anyone else heard of this route to Private Equity?

 
Dec 21, 2016 - 7:52am

This guy is 25 with an MBA in his pocket, and is a PE Senior Associate ?

So this guy graduated from College at the age of , let's assume, 22. Went straight to Grad school, got a job offer during his internship from a PE shop despite having no prior experience. So he graduates and joins them at the age of 24, and is suddenly now a Senior Associate at 25 ?.

Unless of course he graduated early from high school and College which would give him two years work experience in between, which still isn't enough I believe, to land a spot in a good MBA program.

There are a lot of holes in this story mate, he's probably 27-29 at the very least or simply a genius that was in high demand.

 
Dec 21, 2016 - 7:54am

Planning my path to PE (Originally Posted: 10/22/2014)

Good morning!

So I've been thinking through my career goals and have decided that my end all goal is to break into private equity. I would like some advice on what path I should take from here.

Background: B10 Finance degree, 2 years in an FLDP program, currently at a boutique financial services company doing valuations of inventory.
Location: Chicago
Others: Eligible to sit for CPA exams

My question is, where should I go from here? As I see it, I have three different options:

  1. Try to break into PE w/o B-school. I'm not sure how possible this would be, but it would be a lot easier on the wallet. Are smaller shops possibilities after I'm at my current company for a year or two?
  2. 1-Yr MBA at Kellogg in 2 years (So I'd have 2 yrs corp fin, 2 yrs valuations exp) Th 1-yr program would be easier on the wallet.
  3. 2-yr MBA (Booth, Kellogg, Ross) - Staying in the Midwest.

Would a CPA or CFA be of any value as well? Any suggestions/advice would be much appreciated...thanks!

 
Dec 21, 2016 - 7:55am

Take a look at the websites of some PE firms you'd be interested in, specifically the team pages. 90%+ of the associates will have come from IB, so your best bet is to get into an IB analyst program. Start contacting headhunters (Oxbridge, Glocap, HSP, Dyanimics Search, etc.) and networking with alumni so you can try to lateral.

CFA may be of some value, but probably moreso if you were looking at HF's. A better use of your time would be talking to headhunters and networking to get into IB.

 
Dec 21, 2016 - 7:56am

You might want to do some research into the one year program at Northwestern, it has a good set of requirements and is mainly for people interested in staying in the industry they are currently in.

Play the long game - give back, help out, mentor - just don't ever forget where you came from. #Bootstrapped
 
Dec 21, 2016 - 7:59am

Best Path to PE? (Originally Posted: 05/03/2011)

Have a couple of offers:

1) Fixed Income Asset Management at BB (regular BB analyst-1 pay; around 65K+ bonus), after 18 months start on a path to Credit Analyst or FI PM based on needs of the company.

2) Equity Reasearch Assistant at reputable Asset Management Firm, $18 blm AUM (low pay; 45K + limited bonus) initial 24 month contract, eventually leading to PM position in ~10 years.

Which would provide the best exit to PE? Would the brand name of the BB be sufficient to propel me into PE, despite the position being in Fixed Income, and not Equity? The pay at option (2) is low to say the least, and there is no guarantee that I can make it into PE, since I dont' have good Asian language skills (I'm basedi n Asia).

 
Dec 21, 2016 - 8:04am

Best route to PE after entrepreneurship (Originally Posted: 02/19/2011)

Suggestions on theoretical best way to get into PE after entrepreneurship for 5-8 years after college:

-Worthwhile to try to be an IB analyst (assume don't mind the workload too much, but not easy to get and might suck a lot at age ~28)?

-If not, some sort of other finance job? Suggested jobs and length of time?

-If not a finance job, MBA (assuming could get into top 5)?

-If yes a finance job, MBA afterwards (assuming could get into top 5)?

-If MBA, then do IB associate (seems very doable, but hard to maneuver from associate to PE)?

Basically seems like there's no traditional path unless you're an IB analyst.

Suggestions related to hedge funds also helpful.

Finally, will taking the CFA be useful since I'm not currently doing anything finance related (have passed L1 so far, not taking L2 this year)?

 
Dec 21, 2016 - 8:06am

It's kind of random without knowing more about your experience, undergraduate school, test scores, etc.... but my guess would be that you should try and go for your MBA ASAP (apply this year for start in 2012). If you can get into a top school, then you'll probably be able to get a job at a good bank in IBD afterwords (though there's no guarantee, even out of a top school, as you'll be a career switcher).

If you work at the bank for a while, and make the right connections / gain the right skills, you could move over to PE. That said, associates in banking do not move over to become associates in PE that often (of course they do sometimes, but you don't see it much)....from what I've seen, top PE firms generally want associates who've been analysts in banking or started in PE as analysts (superior modeling skills, etc.), but they do sometimes bring in veteran bankers at the higher levels (director, etc) to help with capital markets activities and do other "banker stuff".

I stumbled on an example of this the other day when I was masochistically reviewing the resumes of managing directors at HF - http://www.hf.com/team/Team.aspx?membercode=tWatt

 
Dec 21, 2016 - 8:10am

The entrepreneurship is theoretical and should be considered as at least a few steps up from crack slinging. Int Pymp, entrepreneurship is ongoing so can't go to bschool now.

VC is a solid idea.

Assuming around age 30 it seems like paths will be MBA ==> IB associate/VC, straight into VC, or maybe IB analyst (since exit opps are best, but age might make this not possible)?

 
Dec 21, 2016 - 8:12am

Try and work for a portfolio company of a PE firm in the industry you are/were an entrepreneur in. If you kick ass there, they might want to keep you around full-time, or for other projects. It's a gamble, obviously, but it might be your best shot. I've met 2 Associates that came from the portfolio company route, and both are now at respectable PE firms (one at a megafund, the other at a well-liked MM).

 
Dec 21, 2016 - 8:13am

Better route to PE - Management Consulting or Investment Banking (Originally Posted: 08/15/2010)

I've asked several questions on this board in the past week, and I've gotten a lot of great, great answers. So, please, don't take me posting another new question as a sign that I've been ignoring your other answers (one or two posters seem to think I'm doing this). I'm just posting this new thread in the hopes that it's specific title will attract more specific opinions.

...I'm getting the idea that IB is generally better path to PE than MC...and in the cases where MC does lead to PE, its McK/BCG/B.

So...

1) is that correct, that IB is a better path than MC to PE? If so, why!? lol. It seems like the general business skills learned in MC would be a great asset to a PE firm restructuring a newly purchased company.

2) are MC's and IB's generally hired for different roles at PE firms? If so, which is hired for which.

Thank you in advance for any wisdom!

Best,

Blue

 
Dec 21, 2016 - 8:15am

1st of all, you need to define which size of fund that woud be for. Small caps recruitment has few things to do with hiring in the largest funds.

Second, assuming you're speaking about upper midcaps/Large caps funds, it is true that IBD is the most common path. From my XP, I would say that is (i) because hours at KKR and the likes are closer to those you put in in m&a than in consulting (ii) still, at associate level you tend to do a lot of analysis / modelling which you've been trained for during your previous IB experience.

I would also say that it depends which fund you're talking about. Some big US funds have string hiring pipelines (like GS IBD for PIA, or Bain consulting for Bain Cap), and hence have different profiles.

Whilst I agree with your point that the management consulting XP would turn out to be a great asset, I would also keep in mind:

(i) that the transposable skill set acquired during a consulting experience is largely dependent on the types of assignments you've worked on. The kind of experience acquired by someone who's worked on XX vendor due diligences for PE funds is very different than the one of someone who's mostly worked on macro and organisational studies. Not saying one is better than the other, just that relevant work experience differs.
When they hire you from IBD, they know exactly what you've been trained at.

(ii) that, once again, you're still in for analysis and modelling when reaching PE. How involved you are in taking the strategic decisions for your portcoms depends largely on how senior you are.

 
Dec 21, 2016 - 8:16am

interesting. it sounds like industry-specific mc experience would be more valuable for the same industry-specific pe firms, but at the higher levels. and it sounds like the more generalized IB skills will be more valuable for all PE firms, and at the starting levels. sounds like IB is generally the better way to go.

thank you very much for your insights. they are greatly appreciated.

best,

blue

 
Dec 20, 2017 - 6:31pm

Guest1655
TexasMonkey1868
ledger123

I am having trouble breaking into investment banking and landed a corporate banking role. It might be my only door into finance. I really want to get into VC or PE one day and am okay with small shops, not aiming for bulge brackets or large PE shops. Would any of the routes be possible below? I know it will be tough and unlikely, but are they still doable?

Corporate Banking > VC/PE

Corporate Banking > MBA > VC/PE

Corporate Banking > MBA > IB > VC/PE

Corporate Banking > IB > VC/PE

 
Dec 20, 2017 - 6:32pm

PE: bankers vs consultants (Originally Posted: 10/21/2011)

I know that most PE guys have an I-banking background and a few have a consulting background. I have also heard that the guys who go into PE from a consulting background handle the strategic side of PE, as opposed to the financial side.

My questions:
1. Are the guys with consulting backgrounds capped in their career advancement and income at a PE firm compared to the IB guys?
2. How about a guy with a consulting background and an MD degree, without an MBA?
3. Are there opportunities in PE for guys who want to make the move after the associate consulting level? (vs the analyst consulting level). Or in other words, when's the best time to make the jump assuming you're past analyst consultant?

 
Dec 20, 2017 - 6:33pm
  1. Depends on what kind of consulting and which consulting firm you came out of. Assuming it's a top tier mgt consulting firm (McK, Bain, BCG, etc), then no.
  2. If you're older than 30 (which i assume you are if you have an MD and spent some time in consulting), pre-MBA assoc will be almost impossible to get. Post-MBA assoc could be a possibility, but strong likelihood it would be in an operational role and not the investment team. From there, you could do a lateral move onto the investment side, which i've seen done many times. Another option is going to b-school if you're willing to spend $ and time on another few years of school.
  3. Similar answer to #2 - There are definitely opportunities in PE for guys like that. If you've recently been promoted to associate consultant, the time is now to apply for a pre-MBA assoc job. If you've been in it for a while, the time is still now, but I would apply to both pre-MBA and post-MBA and see if you can get traction with either. If nothing works out, b-school is probably the last option.
 
Dec 20, 2017 - 6:35pm

In short, my thoughts would be that : If your MD/UG are from good school and then you get a consulting gig and Mck/Bain/BCG you can simply apply for a PE gig in a few years time and you shouldn't have a problem. If your MD/UG aren't from good schools and/or your consulting firm is not a great firm it'll be more complicated and you may need to consider an MBA down the line

it's PE and you're taking a non-conventional path... so a prestigious resume is key to making things work smoothly.

 
Dec 20, 2017 - 6:37pm

Banking or Consulting for exit into PE? (Originally Posted: 07/29/2012)

Hi WSO,

The answer to my question seems fairly obvious from digging around but I recently spoke to someone who works at a BB and I asked him this same question. He said that consulting would be better as PE firms are looking for people who understand the operations and management side to things rather than just plain investing. He even went so far as to say that PE firms (through headhunters) recruit "60 - 65 % of associates from consulting and this is especially true at the megafunds." This is all pre-MBA.

What do you guys think? Thanks a lot for your advice!

 
Dec 20, 2017 - 6:38pm
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