Q&A: MBB BA/AC/A headed to UMM this summer and guide to off cycle PE recruiting for consultants
Feel free to ask me anything about working at MBB or the PE recruiting process. PE recruiting was a huge black box to me so I'm hoping this post helps other consultants looking to move to PE.
Background: I am a second year BA/AC/A at MBB who started in fall 2019. I did not participate in on cycle recruiting in 2019 because I didn't get any headhunter outreach before it started (and most 1st year consultants don't get on cycle interviews anyway). I did a LOT of off cycle recruiting in late 2020 and 2021 before finally getting an offer from an UMM (latest individual fund $10+bn) that does not typically take consultants (after getting cut in final/semi final round interviews by two MFs).
Some thoughts and tips:
- Off cycle recruiting is a massive time commitment. Firms think you have all the time in the world to do their 4 hour case studies and modeling tests. Headhunters will pressure you to do a 4 hour case study on a weekday at 5 AM or at 8 PM -- these kinds of requests got ridiculous and I just had to put my foot down and ultimately the headhunters relented and let me do the case studies on weekends. The firms also take their own sweet time in moving through the interview process and ultimately extending you an offer. However, it was very helpful that we have all been remote for the past year because I could interview without having to fly to different cities and I could easily hop on zoom for a 30 minute interview in the middle of the workday. Also, I was very lucky because MBB Managers and Partners literally don't care if you are interviewing for other jobs - I was very open with my teams that I was recruiting and my teams made it work.
- My interview hit rate was way lower than expected. You would think that being at MBB with a top rating and great college pedigree would get interviews at most firms but that's not the case. You NEED to network with people at PE firms in order to get interviews -- 90% of the time, headhunters are useless in getting the interview.
- Working with headhunters is unpleasant. Ultimately they work for the PE firm, not you, and they will do things like:
- Pressure you to do late night case studies on weekdays
- Call you every day when you're in the final rounds of interviews to test your likelihood of accepting an offer
- Guilt trip you and put you down for not accepting an offer
- Ghost you after telling you what a great candidate you are for an opportunity (I know I know, this is to be expected)
- Ghost you after you've done 2-3 rounds of interviews with their client
Basically these headhunters just have to be managed
- Start practicing LBO modeling NOW. Maybe I'm just not good at it, but it took my many months before I got the basics down. When I first attempted to learn the MIN MAX debt repayment formulas I just gave up because I couldn't figure them out (and then I attempted again to learn them 5 months later and it finally clicked). It's a huge time commitment to learn how to do LBO models from muscle memory.
- The headhunters might miss you in their initial outreach (several headhunters definitely missed me) so YOU need to reach out to them to get on their email distribution list
- If headhunters ask you if you are involved in any other processes, probably say no. Definitely don't tell them that you are interviewing at a firm that's more "prestigious" than the one that HH is representing because that will make the HH think you may turn down the offer you get through them
From a consultant's point of view, there are four categories of PE firms
- PE firms that exclusively or almost exclusively take consultants
- Charlesbank, Invus Group, maybe Golden Gate?, maybe Sycamore?
- PE firms that reliably take multiple consultants every year, but also take bankers. Often, these firms will have a different interview process for consultants that is heavier on consulting-style cases and lighter on finance/financial modeling:
- Bain Capital, Hellman and Friedman, Advent, New Mountain Capital, Berkshire, THLee, Onex, AEA, Cove Hill, AVALT
- I would also put Permira here but they hire consultants into a one year value creation role (with way lower pay) and then promote them to the investment team
- PE firms that are open to interviewing consultants, but do not take them every year (basically, you have to make sure your modeling skills are on par with those of a banker and the interview process is a level playing field - no special interviews for consultants in contrast to the firms in group 2):
- PE firms that will not consider consultants:
- KKR, Apollo, Blackstone, Carlyle, Vista, Silver Lake CD&R, Kohlberg, Thoma Bravo, Providence LOTS of others
Details on Interview processes:
- Charlesbank: standard consulting cases
- Invus: standard consulting cases, though fwiw I found them difficult, even coming from MBB
- Bain Capital: first round is an Excel test (consulting-style though, no financial modeling) and a consulting-style case. Superday is 5 consulting style cases focused on ROI
- Hellman and Friedman: Not quite sure but have heard it's a lot of conceptual questions on what makes a good business (though bankers have a different process)
- Advent: Varies by group and by year - have heard very different things from my friends who interviewed here. I have heard of:
- Very behavioral/deal focused interviews with a difficult modeling test (Healthcare group)
- Intense technical interviews combined with verbal consulting-style cases (Generalist on cycle)
- Very behavioral interviews with a paper LBO (Tech group)
- New Mountain Capital: Behavioral interviews with a case study about two businesses that doesn't require financial modeling knowledge
- Cove Hill: Consulting style case followed by financial modeling test (though doable by a consultant) followed by 4 hour case study where you're given a CIM and have to make a presentation about the business
- AVALT: Lots of consulting-style cases with some finance concepts (though doable by a consultant)
Compensation (most recent figures I have. May be out of date):
- Advent: 150K + 150K
- NMC: 110K + 110K
- TA Associates: 300K all in (depends on how many deals associates source per year)
- Cove Hill: 200K + 125K
- Invus: 265K all in
- Permira: 175K for value creation year, 300K all in once you move to investment team
Headhunters (ranked):
- CPI: up up and away #1 for consultants. Has basically all the top consultant-friendly funds. Initial meeting took a deep dive into my case experience, motivations for doing PE, and what kind of firm I'm looking for. Prep hard for this because it's the most in depth HH meeting I had and they cover 60+% of the PE firms you would want to work at that take consultants. They seem to have a CRM system but clearly are not using it because I got asked for the same details by different CPI recruiters lol
- H&F, Advent, NMC, AVALT
- Ratio: Lots of pretty good opportunities for consultants. Weird initial meeting - it was conducted by an intern (I think?) via FaceTime. Got weird vibes at first but they have good clients.
- Golden Gate, Capital G, Cove Hill
- Amity: Easy initial meeting. Did not ask me to walk through one of my cases. Just asked about my motivations for PE. Was pretty annoying that they wanted to get on a call for every single little update that could have been done by email.
- Charles Aris: Time consuming initial meeting and time consuming follow ups when you want to be considered for a role they are recruiting for -- I guess they really want to screen candidates before they put them in front of their clients.
- Charlesbank, Invus
- Dynamics Search Partners: Easy initial meeting, no case walk through. Struck me as internally disorganized (seemed like they didn't have a CRM)
- Apax, GI Partners
- Gold Coast: TPG, other tech MMs on the west coast
- Bellcast: Seemed very professional to me but they only represent MM and LMM firms.
- Oxbridge: Easy initial meeting where they ask you to name firms you're interested in so find out who their clients are beforehand and name them. Represents MM and LMM firms in cities in that are not NYC/Boston.
- HSP: They have some great clients but most of their great clients only take bankers. Initial meeting took a deep dive into one of my cases.
- SG Partners: Don't remember this meeting but I still get their emails.
Thanks for the tips! This is very helpful.
What materials did u use for LBOs? Thank you.
WSO prep pack, 10xleverage, multiple expansion, previous years' modeling tests that my banking friends sent me
Why switch to PE?
Higher pay, more optionality for my future career, I can return to my MBB at any time so it was a no brainer to do something different for a couple years even though I really enjoyed my MBB experience (though I know not all people enjoy their two years as a junior consultant)
When you mean more optionality do you mean purely in the finance / investing world, or outside of it too? That is to say, would 2 years of consulting + 2 years of PE get you to a higher position in tech, for example, than 4 years of consulting?
Great info! I believe for the operations side, KKR and Silver Lake do recruit from MBBs.
Yes, I know some megafunds take consultants for ancillary functions like ops teams, credit investing arms, non US offices, etc. but my post is solely about associate positions on the investment teams for corporate private equity for US offices since that is what is relevant to the vast majority of people on WSO
Can you talk more about the networking component? I’ve heard conflicting things about the benefits/drawbacks of networking with Junior investment professionals at the UMM/MF level.
You absolutely have to network unless you are in GS TMT with a 3.9 undergrad GPA. I started seriously recruiting for PE (off cycle) in summer 2020. I sent my resume to headhunters for almost every opportunity they sent my way in 2020 but didn't get a SINGLE interview. Around January 2021 I started seriously networking and started getting interviews at the firms where I networked with people (I might have gotten interviews at 2-3 firms where I didn't network but that was the exception). In rare cases you might piss off the headhunter by networking but nothing bad will happen really, the headhunter might send you a note saying please contact me with any questions about the role or process but you won't get blacklisted or anything. I networked by going through my undergrad institution's alumni directory and my MBB's alumni database and sending ~60 cold emails to associates and VPs at any firm with >$6B in AUM. My hit rate for undergrad alumni was like 10%, hit rate for MBB alumni was like 40%. Some of the conversations went well (the ones where I asked specific questions about deals the firm had done recently - you really have to prep for these meetings) and I got introduced to more senior people and got put on the interview shortlist. It's a slog but it's the only way to get interviews.
When you said some firms are giving you consulting style interviews, were they not testing your finance knowledge at all?
Correct -- for example Bain Cap cases only tested concepts that appear on an income statement like gross profit, contribution margin, EBITDA, ROI. And also general business knowledge (like new market entry, fixed vs variable costs, brainstorming what costs a business might have, data analysis, etc.). Nothing that would appear on a balance sheet or cash flow statement was tested in the Bain Cap interview process.
Wow so none of the regular LBO prep and stuff is needed to get an offer here?
How did you learn the finance for the interviews? Did you have any experience before joining MBB or from your case work?
I self studied using resources like the WSO practice LBO models, Multiple Expansion, M&I 400 questions guide, etc. You need to know your finance technicals in depth
Thanks for this. Did you approach headhunters yourself? If so, just an email or what was the process?
I just cold emailed the headhunters that didn't email me first. After 2-3 follow ups they were happy to meet with me. However I have heard from friends at T2 consulting firms (LEK, Parthenon, OW, etc.) that the headhunters were not willing to meet with them and were only willing to include them on the email distribution list. I guess this makes sense since HHs have limited time and they know T2 consultants will get very few looks from their clients.
If I'm currently at a T2 firm, is the only viable option to lateral to MBB before pursuing PE recruiting?
Not a consultant and not recruiting for PE but great, well-laid out post man. Solid contribution to the site with good information for people.
Happy to help! This whole process was a black box for me so I want to make it as transparent as possible.
Great post. My question: While being in MBB is it important to be in the financial, due diligence projects for PE recruiter to see that you know how finance works?
Yeah, it's very helpful to have done multiple due diligences so you can talk about them in interviews (I did 3 DDs total in the last 2 years which is less than many of my fellow analysts but was more than sufficient to talk about deal experience in interviews). What's way more important than simply listing DDs on your resume though is being able to talk about them from an investor perspective, for example:
How did you account for the covid impact in your market model? What price (in terms of ebitda multiple) would you have been willing to pay for this business? What were the three key things that made this business a good investment - don't just list of characteristics of a good LBO candidate, you need to have a more indepth answer ex. the fact that this brokerage had a CRM and performance management system compared to its competitors which had none drove higher renewal rates and therefore more stable recurring revenue. Ex., this retail chain was highly acquisitive in new regions of the U.S. but structured its M&A as earnouts rather than cash purchases which conserved cash and aligned incentives with the acquired companies. If you had more than two weeks, what drivers would you have changed in your revenue model? Which line of business for which you projected revenues was most sensitive to a 1% increase in unemployment? Which line of business did you have the least confidence in for your cost projections?
Hi! Thank you for this! Going into MBB soon, what differentiates consultants who do get headhunters reaching out for on cycle from those who recruit off cycle? Would you say majority of the recruitment happens off cycle for consultants?
Unfortunately I don't have a helpful perspective on on cycle because the year I would have done on cycle (Fall 2020), on cycle was indefinitely postponed (and still hasn't happened). I think it's simply the industry norm in PE to mostly take consultants with 3 years of experience as opposed to 2. I guess starting at MBB in July, reaching out to headhunters the day you start your MBB job, having done an IB internship your junior summer, and having networked beforehand would help but again there's nothing you can do when it's simply industry standard to include consultants in on cycle their second year as opposed to their first year.
This is such a helpful post! Was wondering if you had more insight on NMC interview - what factors do you have to consider when comparing the two companies (i.e. is it related more to financials/multiples or market dynamics)? If you have a banking background and interviewing at NMC, do you think you need to spend more time doing case study interviews?
At voluptas consequatur blanditiis rerum molestiae qui. Voluptatem ut omnis nemo ut. Vitae magnam vel quasi autem maiores hic.
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...
Nulla saepe possimus libero officiis in eos voluptate. Libero nesciunt non qui eum. Dolores omnis ipsa et reprehenderit. Illum voluptas blanditiis laudantium sint. Quia nemo quae aut rem consequatur deleniti saepe.
Temporibus iure qui eius assumenda corrupti qui. Exercitationem magnam et eum aut ut cum. Quia dolor delectus at blanditiis.
Sed mollitia ratione non non autem natus excepturi. Corporis culpa officiis provident quae id facere. Facilis sunt dolores omnis natus officia.
Autem debitis et ipsum porro. Reprehenderit consequatur dicta molestiae suscipit exercitationem ipsa est. Ut hic voluptatum eum eos consequatur et.