AMA 2 years MBB > PE

skdude's picture
Rank: Senior Baboon | 187

I've been around the forums for awhile now and always appreciated people willing to share tips/advice. I have some free time before I start my PE gig so happy to answer some questions.

Graduated from target undergrad, worked at MBB for past 2 years and now going to deal side at MM PE fund.

Only request is please try not to ask too many questions about MBB/PE recruiting because I doubt I have any special insight beyond what everyone else has already said.

Comments (22)

Aug 21, 2015

Congrats!

Did you work on the FS/PE projects at your firm?

Would you say that office location matters for PE exits? For example NY office vs city like Charlotte

Do you plan on getting your mba and moving to a top fund?

Thanks

Aug 21, 2015
nick3912:

Congrats!

Did you work on the FS/PE projects at your firm?

Would you say that office location matters for PE exits? For example NY office vs city like Charlotte

Do you plan on getting your mba and moving to a top fund?

Thanks

FS isn't relevant for PE since the work is for the industry (e.g. banks, insurance, asset managers), but typically not related to corporate development or valuation. DD / Corporate development work (across all industries) is very useful for PE recruiting. When I interviewed, I hadn't done much, but did a lot after my offer.

PE firms like tier 1 cities as a signalling factor of your quality as a candidate - NYC, Chicago, SF. However, people place fine from other cities. There is clearly a hierarchy of sorts though.

I may get an MBA down the line. It depends on how much I like my job, what the opportunities there are in the fund or elsewhere and how I feel about my personal life. At this point, I won't learn much from an MBA and it's a huge opportunity cost so it depends on how I feel about the brand and vacation. I definitely don't care about a megafund. Personally, I hink it's a much better to have a spot at a junior level at a high performing, growing MM fund with opportunities to move up than a stagnant Megafund with little room to move up the pyramid. Also work life balance and culture matter to me.

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Aug 21, 2015

Thanks for doing this, I think it's great that users like to give back.

My understanding is that there is a ceiling around the VP level and it can be extremely difficult to get to the levels with meaningful carry. Based on your experience, what's your impression on that?

Aug 21, 2015
Haus:

Thanks for doing this, I think it's great that users like to give back.

My understanding is that there is a ceiling around the VP level and it can be extremely difficult to get to the levels with meaningful carry. Based on your experience, what's your impression on that?

Honestly, I'm not sure. My understanding is that once you make VP there is a good market for lateral hires between funds. I think the hard part is probably getting VP and doing well in the role, but I don't really have a great perspective on this yet.

Aug 22, 2015

I appreciate you taking the time to respond, wish you the best of luck in your new endeavor.

Aug 22, 2015

Thanks for doing this!

When did you start getting interested in jumping to PE? Why did you make the switch? If you could go back, would have started in MBB?

Best Response
Aug 22, 2015
epiphany:

Thanks for doing this!

When did you start getting interested in jumping to PE? Why did you make the switch? If you could go back, would have started in MBB?

I have thought about PE for a career path for quite some time. I started to seriously consider it after my first 6 months at MBB when the headhunters were aggressively reaching out. While I liked MBB, I realized pretty quickly that it wasn't the career I wanted long-term. Too much volatility in cases, people, clients and work. It's also client services in the end of the day, which is not for everyone. I also felt there was diminishing returns to what you learn after 2 years (honestly more like 1.5 years). A great opportunity came along so I interviewed, really liked the people and the fund and signed on. In my view, even if I hate PE I'm still better off in the business world for having the experience. Consulting is always there as a fallback so there is no real downside to the switch.

I would absolutely go to MBB again. I had drinks with my buddy at a top investment bank last night and he told me "He wouldn't wish investment banking on his worst enemy". Admittedly this is an extreme view, but none of my friends at banks enjoyed their experiences or learned (in my biased opinion) as broad a skill-set as those in consulting do. The rockstars in banking placed great on the buyside and know more than I do about finance / accounting, but typically lack a broader business perspective. Of course, they now recognize the value of the experience but it was hell for them going through it.

I actually enjoyed consulting. Learned a ton about business (and finance if not to the level of a banker), got close with great people, traveled everywhere, interacted substantively with c-suite execs and had a pretty great work/life balance (at least in comparison to others). It was a good experience that sets you up well for anything you want to do - PE or otherwise.

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Aug 24, 2015

Thanks, and good AMA. However, I definitely disagree on the below. While I'm sure you are exposed to a much broader work flow in consulting and thus potentially skillset, any good analyst will learn a ton about broader business perspectives. If anything due to the fact that analyzing a transaction is at the company level, as opposed to a lot of consulting work, which can be at the divisional level or even business unit, analysts likely learn more about company analysis / business models / competitive positioning / industry cycles. Also, I can't speak for you personal experience, but I am confident in saying that MMB consultants don't learn nearly as much about finance as a banking analyst.

I am not trying to knock MBB at all. I'm sure its a great experience ,one learns a ton and has a very valuable skill set afterwards. However, your claims in regards to the lack of business knowledge gained by analysts vs. the ability to gain the same level of finance skills are just off base.

skdude:

Admittedly this is an extreme view, but none of my friends at banks enjoyed their experiences or learned (in my biased opinion) as broad a skill-set as those in consulting do. The rockstars in banking placed great on the buyside and know more than I do about finance / accounting, but typically lack a broader business perspective. Of course, they now recognize the value of the experience but it was hell for them going through it.

I actually enjoyed consulting. Learned a ton about business (and finance if not to the level of a banker)

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Aug 24, 2015

Could you share which headhunter firms reached out to you for these PE opps?

Aug 23, 2015

Thanks for answering these questions - super helpful!

My question is around the timeline for your PE recruiting. From your own experience, as well as of any of your MBB colleagues who went to PE, when did you begin preparing and interviewing? Did you go through the traditional PE recruiting cycle for this placement or was this an out-of-cycle interview?

Aug 23, 2015
Usernotfound101:

Thanks for answering these questions - super helpful!

My question is around the timeline for your PE recruiting. From your own experience, as well as of any of your MBB colleagues who went to PE, when did you begin preparing and interviewing? Did you go through the traditional PE recruiting cycle for this placement or was this an out-of-cycle interview?

I went through the standard PE recruiting timeline like a candidate from banking would. Interviewed in Feb/March of my first year for a position ~18 months out. The majority of people I know interviewed in that period for a start after 2 years or interviewed in their second year for a start after 3-years.

With that said, I got hit up a lot in my second year for immediate start PE interview opportunities at both megafunds and MM so there is clearly still opportunity there. This is especially true if you are interested in ops side of business which is much more likely to hire for immediate starts towards end of your second year.

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Aug 24, 2015

Gonna go ahead and ignore your request:

How does PE recruitment prep work as a consultant? How much did you study on your own and what did you cover?

Aug 25, 2015
cubecul:

Gonna go ahead and ignore your request:

How does PE recruitment prep work as a consultant? How much did you study on your own and what did you cover?

Frankly not a ton of prep. I knew the basics of valuation from my time when I considered IBD. This includes how to read, understand and interpret financial statements as well as think through basic valuation. I was certainly capable of conducting a paper LBO and thinking through strategic rationale behind investment thesis but could not build a LBO in excel from scratch. My goal was consulting friendly funds that prioritized strategic thinking over 100% financial modeling skill for interviews though.

Aug 24, 2015

What was your major in undergrad? (Plus any other educational background if you're comfortable with that)

Aug 25, 2015
NuclearPenguins:

What was your major in undergrad? (Plus any other educational background if you're comfortable with that)

Liberal arts background from target. Also took some business related courses like econ, accounting etc. Had good internships showing business interest and acumen as well.

Aug 24, 2015

thanks for doing the AMA! i'll add up top on the frontpage a couple times this week

WSO's COO (Chief Operating Orangutan) | My Linkedin

Aug 27, 2015

Thanks a for for doing the AMA

I'm just wondering which Tier-2 or 3 consulting firms have the best representation at the PE funds you're joining and have interviewed at. MBB is out of the question for me at the moment so I'm just trying to shoot for the Tier-2 firms now.

Jul 17, 2017

does anyone have links to other good posts that discuss going from MBB to PE? tried doing numerous searches, but haven't really found anything that specifically touches on recruiting/interviewing as a pre-MBA consultant at MBB for private equity.

Jul 19, 2017
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