AMA: 1st Year Private Equity Analyst at a MF (KKR, BX, TPG, SLP, WP)

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Rank: Baboon | banana points 142

Hey everyone - this forum has served me greatly over the past couple of years and so I thought I'd give back to the community.

Given the lack of info on PE Analyst programs on WSO, I thought it would be helpful if I started an AMA. More info on myself: graduated from a target school and currently working as a 1st year analyst at a MF PE fund (one of those listed in the title) in NYC (interned there in my junior summer and went back directly after graduation).

Won't answer any specific questions about my background other than that for anonymity's sake, but happy to answer any other questions about the work, lifestyle, recruiting, etc.

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Comments (51)

Nov 15, 2017

Just would like to hear your opinion on whether you have considered IBD instead and why did you choose to start in PE over IBD.

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Best Response
Nov 15, 2017

I had considered IBD and had offers to BB/EB's, but chose my PE offer for a couple reasons:
1) The work seemed more interesting to me as I'm passionate about investing and wanted to start in the industry right off the bat. Also thought it would give me a leg-up if I were to recruit for a HF or go to business school after (as recruiters view PE analysts more favorably given how few and difficult to get these jobs usually are)
2) Seemed like the most risk-averse option given how intense MF PE recruiting has gotten in recent years and considering I would have pursued that path had I done 2 years of banking
3) Pay and lifestyle are better at my firm (and PE generally) compared to IBD

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Nov 15, 2017

What is the typical trajectory like? Is there a promote to associate available after 2-3 years, or do people switch to hedge funds, or go to bschool, etc...

Nov 15, 2017

You pretty much mentioned all the options. I would say half of the analysts stay on as associates, while 40% move to HF's and 10% do business school or something non-finance.

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Nov 15, 2017

what kind of work do you guys get? I feel like if I had an analyst id just make them do templated models and take over once we got deeper in processes / give some of the more annoying work like DD lists & NDAs etc

Nov 15, 2017

Think this really depends on the firm. I know at least at my firm, analysts get just as involved as the associates do on deals. This results in analysts getting to run models (although the associates will usually get more reps at this given they already have 2 years of banking experience), lead various work streams, engage across all aspects of diligence, etc. The one downside is that at the end of the day, you are at the bottom of the totem pole and so will have to do some of the work that no one else wants to do (although this would be the same in IBD).

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Nov 16, 2017

Is it possible to break into a MF analyst program through FT recruiting? What was your GPA range like for SA recruiting?

Nov 16, 2017

Definitely possible to break in through FT recruiting but you will most likely need to be in a top banking group (GS TMT, MS Tech, BX R&R, etc.) and network early on. My GPA going into SA recruiting was a high 3.8.

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Nov 16, 2017

Can you explain what you do on a day to day basis?

Nov 16, 2017

Really depends where you are on a deal process. So if we're at the early stages, we'll do a lot of higher-level research into the industry, company, P&L, and potentially building out a simple model to get comfortable with valuation/returns. If we're later along the deal process, we'll be working a lot more with advisers (bankers, lawyers, accountants, etc.), managing various work streams, and putting together decks for IC. Usually you're on 2-3 deals at a time so you'll be doing a variety of work. At the analyst level, a lot of it is power point and excel analysis, working with internal and external teams, and process management.

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Nov 16, 2017

How's the learning curve at the beginning? Is it hard to ramp up, or just naturally happens in the first few months?

Also, what are hours like typically, and how has weekend work been so far?

Nov 16, 2017

The learning curve is definitely tough and the job itself is more stressful than banking (higher expectations, no hand-holding). I think it was slightly easier for me given I had already worked a summer at the firm and knew how we did things, but ramping up from a SA to FT analyst is still difficult. After the first 3-4 months you start getting the hang of it though. Hours are between 60-80 depending on active deals and weekend work is minimal (although does pick up greatly when we're cranking on later-stage deals).

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Nov 16, 2017

Recruiting wise - how many analysts do their summer with your shop versus doing their SA with BB/EB and then recruiting for full-time PE analyst positions? Could you provide any more color into how you recruited / prior internships you had, etc?

Nov 16, 2017

I would say 75% of our FT analysts previously summered with us, with the others coming from BB/EB or other MF's. I recruited for my firm via OCR since my school is a target (went through normal on-campus interviews, super day at the office, etc.). I previously interned at another PE fund (although smaller) in my sophomore summer.

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Nov 16, 2017

Also, how quickly did headhunters start reaching out to you for recruiting elsewhere? Do they still reach out, or is that something you have to be more proactive about? I assume you get top-tier looks easily?

And how are you enjoying the work? Is it better/worse than you thought it would be? Why?

Nov 16, 2017

Assuming you're asking if HH's reached out over the summer. I did get a couple of emails from other funds who were running exclusive processes but I was really enjoying my summer and felt no need to switch. Have a couple friends at some of the top IBD groups and I got most of the same emails as they did.

I'm definitely liking the work so far, obviously it's still a grind as a 1st year and a lot to learn. I felt like I had a pretty good view on what the FT work would be like since I summered here so nothing too surprising.

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Nov 16, 2017

Thanks for the reply. l mean are funds/HH's already reaching out to you now as a 1st year analyst? Or not?

For the people who leave your fund, how do most go about finding their next job? Is it mainly through HH's/funds reaching out to you, or you reaching out directly to them (either HH's or specific funds)?

Appreciate the insight!

Nov 17, 2017

The standard HH's/funds that reach out to the banks are starting to reach out, however you have to be a bit more proactive. The reason being that HH's have dealt with banking analysts and placing them into PE for decades, but PE analyst programs have only been around for the past 5-10 years or so. A lot of the people that leave the firm, often go through HH's or via networking with some HF's (think tiger cubs) that don't do formal recruiting.

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Nov 17, 2017

What's the candidate pool for those HFs? Does it solely consist of MF PE analysts, or do they also consider IBD analysts

Nov 18, 2017

Thanks for the reply again! PM'd.

Nov 16, 2017

Thank you for doing this. Very helpful for certain. Going straight to MF PE from Undergrad is mighty impressive :)

Thus far, have you been tasked to do modelling intensive work? Or have you been more involved on other parts of the transaction process (e.g., due diligence, drafting IOI's, research, among other Ad hoc tasks). Have you felt at any point that a 2 year stint in banking would have been helpful for you?

Tangentially, do PE analysts have the same structure as associates with respect to 2 years and out? Or do you stay on as associates until you are asked to go to business school?

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Nov 16, 2017

In the 3-4 months I've been here, I've felt like I've gotten a pretty broad exposure to all the work responsibilities you mentioned. Do think its been a bit less modelling-intensive as I may have anticipated as the associates usually get staffed with those given they already have 2 years if banking experience (although I've been told this will pick up as I get more reps and ramp up fully). I think banking is helpful if you want a less stressful environment to learn basics (financial concepts, excel, modelling, putting together powerpoints). I never thought this would be helpful for me as I already had two summers of PE experience and didn't need the formal training.

Depends on the firm, but many will allow analysts to get promoted to the associate level or even past that. A lot of analysts however decide to leave to HF's.

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Nov 16, 2017

What do you think a freshman at a target (Ross) can do (besides getting a great GPA) to begin to differentiate himself from the competition if he hopes to work in PE one day? I've been told its too early to network, and I feel that investing in stocks isn't really relevant. Any advice? Thanks!

Nov 23, 2017
  1. Club leadership
  2. Win some kind of recognizeable competition in something that you can put on your resume.
  3. Be interesting. Work abroad, have some kind of adventure.
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Nov 16, 2017

Thanks for doing this. What does comp look like at the analyst level?

Nov 16, 2017

All in comp is around $200K

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Nov 17, 2017

Wow.. is that number for first year analysts or for analysts across the 2-3 years cuz it's alot more than the 150k for first year BB/EB IBD analysts.

Nov 17, 2017

1st year comp is closer to 180-190k, while 2nd year and up gets you to ~200k. Many funds also let their analyst co-invest, which isn't factored in but in reality would raise your comp in excess of this.

Nov 17, 2017

Still a staggering amount. Is PE analyst pay in line across the MF board (eg. KKR, BX) and top tier MFs (eg. LG&P, Silverlake)? THanks

Nov 16, 2017

Do 1st year banking analysts at other companies get their PE associate offers to join your firm before you do, after, or around the same time? If PE offers went out in mid January of analysts first year, when would you expect the firm to say that they want you to stay past your two year analyst stint? How do you hedge your bets, and are you allowed to recruit with competing PE firms just to ensure that you definitely have a pe associate spot somewhere?

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Nov 17, 2017

Haven't gotten that far yet so hard to answer how I plan to hedge my bets, but all PE firms will give their analysts promo offers during the same time they are running associate recruiting (so January). If analysts are going to recruit, they usually don't recruit for other PE funds, but will gun for HF's. Definitely have seen some people jump between PE funds but its just a harder question to answer ("why do you want to switch from x firm to y firm if both are MF's").

Nov 17, 2017

Hello, thanks for the great insight!
Did you receive a formal training at the start of your analyst program? (like they get for 3weeks in IB), if so were you mixed with people from other offices (london, hk, etc)?

Nov 17, 2017

Yes we had a global training in NY where all the analysts across different offices came together. Its not done through external firms however, as the training isn't as standard as banking training, and thus done in-house.

Nov 17, 2017

Thanks for doing this. Can you talk about trends you're seeing on the business school front? Does Harvard or Stanford seem more popular, and what % of people from your fund seem to get into each? Do people who get into both tend to choose one over the other? Thanks.

Nov 24, 2017

You're right, HBS and GSB are the most popular. Not sure on what the success rate is but I'd say about 10-20% of our analysts will elect to go down the business school route, with half of them going to HBS and half going to GSB (small minority going to Wharton). Deciding between them really comes down to personal preferences (Boston vs. Palo Alto) as well as professional goals (if you want to do tech / VC you'd pick GSB and if you want the more traditional post business school route you'd pick HBS).

Nov 18, 2017

What is the typical staffing on an active deal post-management meeting? How many MD/Principal/VP/Associates/Analysts will typically get staffed on a deal?

Thanks

Nov 24, 2017

Depends on how active / intensive the deal is. For our larger deals we'll have all hand on deck. This results in 1 analyst, 1-2 associates, 1 principal, 1 VP, 1 MD, and 1 MP all on the deal team. For smaller deals (e.g. bolt-on acquisitions for our portcos) we'll only have 1-2 analysts / associates and 1-2 senior guys.

Nov 18, 2017

You mentioned a few times that a lot of analysts / associates recruit for HF roles. Why is that? I may be wrong here, but I was under the impression that the hedge fund industry is struggling as of late? Thanks for doing this - your insights are very helpful!

Nov 18, 2017

I know people then have gone form PE---HF. It's because HF pay is still higher than associate pay at PE. Also, the work is more intellectually stimulating, and there's a whole lot less grunt work. Sure, the industry as a whole may be in decline, but it will still exist and pay really well for the forceable future.

Nov 19, 2017

What did you do sophomore summer? Sophomore at a HYP with a 3.7 here really hoping to break into PE out of school.

Also, what is the background of most of the people in your analyst class? Like mostly what you'd expect -- finance or economics -- or liberal arts too?

Thanks for doing this.

Nov 24, 2017

I worked at a smaller PE firm in my sophomore summer. Almost all the analysts have pretty intensive finance backgrounds (school and prior internships wise). This is a function of having to work in PE right out of school and not going through the 2 years of banking prep.

Nov 19, 2017

From your knowledge, does your MF / any MF hire 2nd year Analysts who have done just 1 year in IB (assuming that the MF already has an Analyst program in place)?

Thanks.

Nov 24, 2017

Typically not, at that point they would just wait for associate hires.

Nov 23, 2017

Lol at all the monkey shit being tossed, jealousy is fucking alive in this forum. Can't you be happy for someone else's success and use that as motivation to propel you forward. Kudos OP you're killing the game and from the looks of it making the NYU students very jelly

What concert costs 45 cents? 50 Cent feat. Nickelback.

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Nov 24, 2017

As someone looking at the FT PE Analyst recruiting process, when do the MFs typically have their interview processes? Also, when would you recommend to start reaching out to people? Spring? Early July?

Nov 26, 2017

They typically run their FT processes in late July - early August. I would recommend speaking to people to learn more about the firm as early as you can and then stay in contact with them. Once you know you're in good standing to get a FT offer to the bank you're summering with, reach out again to inquire about FT opps.

Dec 25, 2017

Sounds good. Differences b/w PE and IB aside, do you feel like you are going to miss out on the benefits of a IB program, or are the PE analyst programs these days as good when it comes to training etc.?

Nov 29, 2017

As a sophomore at HYP doing an analyst role next summer at a prominent tiger cub, how exactly do I go about recruiting for MF PE next summer? Is networking the main way in the door, and if so when should I start reaching out? Is an OCR resume drop without networking (with a strong resume) sufficient?

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Nov 29, 2017
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Dec 1, 2017
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Sep 7, 2018