Hello Fellow Monkeys,
Longtime reader here, and seeing as this site has been invaluable in helping prep me for the switch from Big 4 to the buy-side, thought I would try to pay it forward.
As the title says, after graduating from a non-target state school (Colorado, Arizona, Oregon) with a mediocre GPA (3.3) I started in Big 4 Audit (Financial Services) before transferring internally to the FDD team when I got the promotion to senior associate. Began trying to network/recruit for IB/Buy-side roles in June 2020 before accepting an offer to join a private credit fund (Comvest/Maranon/HIG Whitehorse/Ares) last week. Was promoted to Manager in FDD in the middle of the recruiting process but don’t believe it had much of an impact on my transition to the guy-side.
Happy to answer any and all questions about my time in accounting/advisory, my recruiting process, prep tools etc
What transferable skills did you gain from working in TAS and Audit? What did you need to teach yourself. Do you see Big 4 as a solid stepping stone for this who do not have the best grades/cannot get into a bank.
John, you are a bond salesman.
JohnGutfreund 1) I would say the most transferable skills learned from audit were just a strong accounting base and knowledge of how the three financial statements link. Coming from a Financial Services background is not the best though as you don't get the revenue/inventory accounting experience that is extremely important when looking at the kinds of companies PE/PC firms invest in. In TAS/FDD, I was able to gain experience diligencing/analyzing companies in all different types of industries. This gave me a solid foundation in QofE / NWC analyses, the types of metrics companies use to track the health of their business and how to speak to the main drivers/levers of a business from a more high level point of view than in the weeds audit fieldwork.
2) Biggest thing I needed to teach myself was financial modeling, specifically how to build 3-statement LBO models (was given a modeling test for the current role that was basically just building a 3-statement LBO and then putting together data tables to model out different scenarios and how the target's credit metrics held up during base/worst case scenarios). I wanted to be as prepared as possible so I used the WSO and BIWS modeling courses and studied the WSO investment banking and PE interview guides.
3) Would absolutely recommend Big 4 as a jumping off point for those who do not have the grades to go into banking out of undergrad, although I would not recommend my path of joining financial services audit as it does not give you the right kind of experience and means you will have to work that much harder to make the transfers work. Also be prepared to work your ass of as the internal transfers are only given to the top performers/networkers. Another thing I wish I had known about as an undergrad was the Big 4 Corporate Finance teams which are MM investment banks, while exits are nowhere near as good as a reputable brand name bank, it would certainly be an easier transition than beginning your career in audit. Further, if you can begin your career in a TAS service line (FDD in some cities, valuations etc.) it will make for an easier transition as well.
How would you compare working in B4 Corporate Finance vs any lesser-known boutique/MM bank (in terms of deal experience, deal size) that pays more?
Interested b/c a decent amount of B4 CF teams underpay against the street for the two or so years you stay before exiting and it seems like a tradeoff between short-term salary and longer term potential better exits.
Will you be joining the firm in an investment or portfolio management role?
Will be joining the investment team
Fellow ex big 4 who later went to IB->PE. Congrats, not easy to make the move. If you are going to HIG Whitehorse, can you PM?
Just curious, how difficult was the transfer to FDD? Starting in audit soon but really want to get in that group... any advice to get in there?
I will say that I had an easier experience than others that I have spoken to in my group and at other Big 4. I was introduced to the lead partner in the group by one of my audit partners who was willing to help me and from there I had an initial screen with a Director in the group and then a case study interview. I applied about a month or two before making senior in audit and then transferred approx. 3-4 months later without having to do another busy season. I would highly recommend learning as much as you can about what the group does, what typical QoE/NWC adjustments look like etc. so you are able to speak to it with some knowledge when the time comes to interview. As early in your audit career as you can, try to start networking with those in the group so you can learn the things I mentioned above and potentially have some people on your side when attempting the transfer. You will also have to be a high performer as a top tier rating will make things much easier for you, although it can be done with a second tier rating if you network well. Finally, try to build a good relationship with your coach/a partner you work closely with as having them be able to speak to your work quality will also be invaluable. If an internal transfer is not going to happen then look to make the switch externally, I know that all the Big 4 are trying to hire FDD professionals in droves at the moment so reaching out to someone from another firm on linkedin asking for a referral would be a decent way to go about it. One last thing to note is that while I had three busy seasons under my belt by the time I transferred it is certainly not necessary and have heard about it being done after two or even one for the right person.
Difficult. The Audit group is a natural feeder for internal transfers into the Deal Advisory / Transaction Services/ FDD practice. So everyone in audit that wants to get on the deal side (either staying in the firm or moving to IB or PE), this is the most logical path. So you're up against all the other audit kids internal and a bunch of external to make this transfer. But those FDD teams are crazy busy, so they're always looking to hire and typically have a 2 year churn also. Your best bet is to start networking internally to get on their radar. If you're a CPA, performing well on the audit side, and experience a real interest and understanding of the deal side, if they get to know you and like you then it because pretty high likelihood that they'll support you in transferring.
Any readings or guides that you used that focused specifically on credit modeling or would you say the best way to prep for interviews is general modeling practice? About to graduate and go into a valuation role but looking for a way to set myself up for PC in the future as it has become of interest to me
Personally, I just used the general modeling courses and then spoke with some colleagues in IB who had been through similar interviews and had practice models that showed how to waterfall out the debt returns. I did not end up needing to know how to do that in my modeling test (was just a standard 3-statement LBO model with scenario analyses) but thought it was good practice regardless. I wish I had some specific readings or guides for you but I think the firm I signed with knew that I was coming from a non-traditional/non-credit background and wanted to test that I knew the fundamental technicals and how I thought through viewing a company from the investor's perspective.
I am about to graduate and start in a TAS role at Big4 soon too. I have heard from some of my connections that the best time to leave for IB/Buy-side is after 2-3 years. Does this seem right to you? Were you able to obtain a decent amount of interviews/offers? What made you choose PC?
Good post. All very good points about the career path to transition from audit to FDD to buy-side IB or PE. But am I the only immature one that giggled at the typo about OP "transitioning to the guy-side".
lol I had a good chuckle when I re-read that myself, think i'll just leave it
PM?
just PM'd you
Hi and thank you very much for doing this.
I am in the UK, currently six months into my career in FS audit.
I initially had hopes of following your path, however I am struggling an unusual amount in keeping up with the workload during busy season. Do you have any advice for me to speed up so that I can become a better performer? Do you think if I got average ratings, that I could network externally at other big 4 to make the move?
Would doing level 1 of CFA help me position myself to make the move?
Would you say the Excel modelling course on WSO is the best bet for a trainee accountant to acquire the requisite knowledge to make the move?
Thanks.
Hey - first off, congrats on starting your career! I certainly don't envy you beginning your first job in a virtual/remote environment, I can't imagine how difficult that has been. Unfortunately I don't have much in terms of good advice to get up to speed other than continuing to work hard, ask lots of questions to your seniors/managers and don't beat yourself up too bad when you make mistakes as we all do (especially at the start of our career). I would say do your best to avoid repeat mistakes and try to actually read the procedures/tickmarks from PY etc to really understand what it is you're doing instead of just trying to recreate prior year and hope it works out. In terms of the ratings, I was actually rated as an average performer after my first two busy seasons due to not pushing myself as hard as I could have and a coach who didn't have my back. I ended up switching coaches and getting a top tier rating before I began conversations about a transfer so don't beat yourself up to bad if you don't get a top rating after your first year. I definitely think you would be able to network externally after a couple busy seasons even if you're an average performer throughout your time as I believe it would be difficult for another firm to get your actual ranking unless they had friends at your current firm. Just make sure to study up to make sure you're ready for an interview should the opportunity present itself! In regards to the CFA, it was never something I considered but I know of a couple people in my group who have them. I would say that it won't hurt you and could be a good way to show you're serious about finance/making a switch but it won't benefit you much more than that. I think it would matter more once you're already in FDD and looking to jump to the buy-side to show that that is where you really want to be. Finally, yes I believe the modelling courses on WSO or BIWS would be your best bet to get up to speed as those are what I used myself.
Remember to take it one day at a time and good luck with the process going forward!
How did you decide on private credit vs IB or other lateral opportunities that were available to you?
I've seen varying amounts of comp for private credit funds - what is your comp like? What is comp like at the senior level (MD/partner)? Also, I've heard that some funds (I think a couple that you mentioned) mainly recruit from levfin at banks, and pay a lot more for people coming out of that 2-year stint, is that true?
Is it normal to move form a role at a private credit / direct lending shop to a fund that focuses on higher-yielding debt or emerging markets debt? What about a product group at a bank?
Thanks for doing this.
I just replied to a comment above explaining my decision to go PC instead of the IB offer I had but basically came down to wanting to get investing experience as that was my end goal and Big 4 IB seemed like another stepping stone that may not even get me to where I wanted to eventually be (buy-side). Further, the brand name of my future firm on my resume is better than Big 4 IB, which no one outside of Big 4 TAS professionals seem to even know exists.
In regards to comp, my base is slightly decreasing from where I am at currently but my bonus potential is much higher and the firm is giving me a chunk upfront to coinvest and allowing me to put as much of my own money in as coinvest as well. All in comp excluding the coinvest is a little less than ~200k. Unfortunately, I do not have the answer to the comp at the senior level as I didn't feel comfortable asking the MD's I spoke with during the interviews what they make. Further, I do not know if they pay those coming from a LevFin stint more but can tell you that when I tried to negotiate my base salary upwards to get closer to my current base they said the amount is standard for all the associates they just hired and would not move it. I would be pissed if I later found out they gave a LevFin person coming in at the same time more but it's certainly possible.
My understanding is that it would certainly be possible but I am not absolutely certain, just like anything I'm sure it can be down with a lot of networking/effort but am not able to give a firm answer. Similar to the banking question, I didn't come from banking so not sure how often people boomerang back to the sell-side but am sure it can be done with the right network/interview experience.
Happy to help! Let me know if you have any further questions.
Please PM me. I can’t PM you for some reason.
What is the all-in salary like in your firm? Also average hours?
Adipisci culpa maiores aut dolor. Laboriosam rerum aut esse at. Beatae amet cupiditate harum et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Velit nisi qui id asperiores voluptatem reiciendis. Suscipit laudantium earum earum ut ipsa. Dolores et facilis sed voluptatem. Voluptatem neque non quia rem voluptas animi. Repellat excepturi explicabo sunt rerum.
Id assumenda sapiente quia aut. Corporis vero quis error nisi distinctio velit eos sint. Quia autem velit dolores optio quas est ut. Quia qui ut fugit reiciendis est. Itaque delectus nihil magni alias.
Voluptas vero quia incidunt modi explicabo. Iure impedit provident nihil qui ut voluptatem illo consequatur. Placeat ut maiores commodi consequatur quia. Maiores nam neque non et voluptates ex autem. Sit distinctio itaque placeat asperiores. Ut possimus unde magni voluptas iusto incidunt officiis. Consectetur et deserunt aliquam consequatur officia dolor rem.
Qui ut illum maiores culpa. Veritatis sit delectus sit a non ipsam. Assumenda occaecati ipsum sunt soluta consequatur sint. Alias error autem aut nihil. Itaque sed ea voluptatem corrupti qui veritatis necessitatibus.