AMA: Tier 2 consultant to UMM/MF PE

Bubba-'s picture
Rank: Senior Baboon | 200

Happy to do an AMA to give back and talk about how I went from a tier 2 consulting shop to UMM/MF PE.

My background

Multiple interviews

I had dozens of at bats for over a year before successfully landing this offer. I interviewed everywhere from VC to sourcing growth to regular growth to MM to impact investing to MF to HFs to M&A IB to RX. Seriously.

PE was the place to be

I quickly realized PE was the place to be and so I made sure to only get DDs and strategy. When interviewing, nobody cared about my strategy projects. They only wanted to hear about the biggest deals I worked on, not because of size, but because there was so much to talk about and I really got to put on my investor cap and show them I could think critically and creatively about these deals.

How I learned modeling

I went to a semi-target school. I came out of college having no idea what an "income statement" was (non-technical major, think something like philosophy or French). I learned modeling and accounting by spending most weekends modeling and through trial and error at interviews. You can learn just about everything you need from Multiple Expansion. They even added a sensitivity analysis module a few days ago. I also recommend picking up old tests from peers.

Interviews

Two consecutive years, I did not get a single invitation to interview on cycle (unlike my MBB counterparts) and so I really had to hustle. For the most part, I received all interview invitations through headhunters, though 2-3 I received from networking.

Ask me anything

Happy to answer any questions. The best advice I got on this forum was to have a never give up attitude.

Comments (21)

May 15, 2019

Thanks for doing this.

You mentioned that you didn't get a single invitation to interview on cycle. What change did you make in terms of how you approached the process / the meeting with the headhunters in order to receive interviews?

May 16, 2019

I stayed in good touch with the headhunters. Contrary to most advice, when I highlighted specific roles or reasons I wanted them, I don't think it made much of a difference. I even had a headhunter laugh at me when I suggested I interview with one of their flagship UMM clients because of a strong fit of interest and experience. Some headhunters generally reserve some opportunities for MBB.

What did help though was reminding HHs that I had been improving and working hard towards placing. I once did not do so well on an interview and so I emailed a headhunter to say: "I'm not sure if [fund] told you my error in the interview, but it was [x] and I've been practicing how to do not only that, but [y] and [z] as well. Thanks again for including me in the process and I'm looking forward to the next one."

I also was nice to headhunters. I don't think this is common. Sending thank you emails after each attempt saying how appreciative you were to be included in the process, sending thank yous for setting things up.

Headhunters are perfectly willing to give you off cycle interviews because they may not be able to fill up their spots with all MBB consultants. I also recommend really getting in touch with them, all, upfront. You never know where a good opportunity will come from. If you don't hear from them for a while, reach out and ask for a quick catch up phone call.

Lastly, I highly recommend CPI. They are the most professional and they treat you humanely. They also have great opportunities.

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May 16, 2019

Thanks for doing this! I greatly appreciate it. I am in a similar situation as for background (non-finance degree). Currently working at Tier 2 with only DD project experience so far (mix of sell-side and buy-side). Both buy side projects have been MF clients though, but much of our diligence was around market sizing, competitive landscape, customer segments, etc. rather than deep financial due diligence as I assume the banks/PE firms handle that. Wondering your thoughts on how I could best leverage this? Other general questions I have are:

1) Did you wait for HH to reach out to you or did you actively reach out to the big names? Did the offer you end up landing come from a HH?
2) What do you mean by you were able to show how you think critically and creatively about the deals? I feel I would be able to do this with market dynamics, positioning, etc. and add-on acquisition opportunities, but not as much with the finances, so I wanted to get your thoughts
3) When would you say is the ideal time to start recruiting (tenure and time of year)?

Thanks in advance for doing this. Greatly appreciated.

May 16, 2019

1) I actively reached out to them, and you should too. My offer did come through a headhunter. Of the 20+ interviews I had, only a couple were from networking, and those weren't at great firms.

2) You should read the CIM and understand the financial reasoning behind the deal. If you can show them you understand your markets and competitive dynamics, and get behind the thinking of the finances, you will be an attractive candidate. You should even model out the companies you work on when the project starts. It's good practice and you can understand where your client is coming from.

3) Now. It doesn't hurt to get in as many reps possible. I think you need lots of practice for in depth interviews.

It's very cool that you've done MF clients. Generally I found that those deals are with businesses that have multiples products or business lines, which means you can get more creative with your thinking about upside and downside risks. One of the deals I spoke to most involved talking about cross/upsell opportunities through an add on acquisition and how that drove potential for multiple expansion, and margin expansion on the newly purchased product line, yet talked about other downside risks. That's not terrible specific on purpose, but hopefully gives you an idea of what I mean about how there are lots of directions to go with your creative thinking. At the end of the day, you as a consultant are hired to not only do a perfunctory check-up on the business, but to get creative to figure out if your client should have any reason to kill the deal or find something that allows them to to pay a turn higher in a competitive process.

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May 16, 2019

No bank or PE firm does its own FDD - that's gonna be outsourced to a Big 4 firm. FDD is all about the accounting.

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May 16, 2019

Thanks for doing this!

As someone who works in a consulting-type role and dreams of working in PE for a career, I've tried working with headhunters but they typically bucket me with the tier 2 consulting firms (at best) even though my role has a lot of overlap with tier one quality even some M&A work.

Since there's very little to change headhunters' perceptions of your role, what are the best ways to really stand out with them coming from non-IB and even non-MBB? Also, you mentioned CPI, but are there any other HH who come to mind as being really good from your background?

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May 17, 2019

Don't be disheartened: only the MBB name matters. For some, you can't get past that. I've learned that despite having a top notch experience, sometimes you need to just recognize that you don't have the name. I also think you should consider that people know what the MBB experience is, and are looking for that, even if you also have a good experience. This process has given me a lot of respect for MBB and I now believe they are better firms than the Tier 2 for a reason.

You need to show them that you can do the modeling as well as any banker, and that you have a deep understanding of the transaction process, to prove that you are "safe". You also need to be able to, as I mentioned above, differentiate by thinking about the commercial side of deals in depth, specifically with regard to TAM/MS/growth/share, and competitive dynamics. You should also show that you can deeply research a company because most people will come just wanting a job, but if you can prove you know what you're signing up for, they'll be impressed.

May 17, 2019

Question on your comments about believing MBB is better than Tier 2. I feel the experience at my tier 2 PE DD shop is highly comparable as we do heavy modeling (TAM/MS/growth/share) as you mentioned along with examining competitive landscape, customer perspective, surveys, etc. Wondering what part of their experience differentiates them?

May 17, 2019

I would say CPI is the best, and also add HSP, Ratio Advisors, Dynamic Search Partners, OxBridge Group, and Bellcast partners to the mix of HH's you'd want to reach out to as well.

May 17, 2019

I would agree with this but add the following color that I think is specific to each fund:

  • HSP treats you poorly. They won't let you know when you got rejected, even after a superday. They are a bit disdainful of non-MBB and will dangle names they'll never send your resume over for. I had two interviews through them, both of modest quality. I would recommend working with them as an unfortunate necessity, and nothing more.
  • Ratio is a bit disorganized and won't include you with their flagship clients but will give you some interesting HF looks if you can show them that you have some relevant experience and strong interest. I would recommend working with them. I had an overall positive experience, though some frustration at not having access to some names they cover that I wanted.
  • OxBridge doesn't have many great opportunities, and they point blank told me that MM and larger PE firms won't recruit non-MBB consultants. Limited interaction, but otherwise pleasant.
  • DSP were very humane and willing to work with me. I never got much traction on them for anything other than Endowments & Foundations, but they tried to include me with HFs and PE. I don't think it's their fault I never got traction through them. They were the most "human" to work with and even gave resume advice. Overall nicest headhunters and very encouraging.
  • Bellcast gave me some good opportunities. One of them I performed very poorly on and then I did not hear from them for a while. They're a bit disorganized, but they have some good clients. You can probably get a job at HGGC as a tier 2 consultant if you really hustle.
May 21, 2019

Agree on most of this. Bellcast was pretty good to work with and friendly. In my experience, Oxbridge / HSP were the best for MM/LMM PE.

May 19, 2019

Thanks for the AMA-

Were you based in NYC? If not, how difficult was it to get interviews at NYC-based funds? Did you mainly interview with funds in your city?

May 19, 2019

I am based in NYC. I never found geography difficult regardless of where I was interviewing: N, S, E, or W.

May 19, 2019

What was your school background? Target/semi-target/non-target and what was your GPA like? Did some funds have stricter GPA/school policies than others?

May 19, 2019

I went to a semi-target and graduated cum laude. I can't comment on cutoffs for GPA but often enough had people not grill me on my academic background because high marks signal academic success and effort, even if a non-traditional major.

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May 21, 2019

Thanks for this! I'm currently in my first year at an MBB. It looks like I won't get to work on any DD's before on cycle recruiting starts. Will this put me at a disadvantage? How can I spin my existing experience (One year in an organization model case)?

May 21, 2019

That's tough. I'd ask @embeebee . Is there any chance of rolling off your current project and on to your PEG rotation?

It might be easier if you're at BCG because my understanding is that they're trying desperately to play catch up, and so you could be thoughtful around your skill set and positioning.

My best advice would be to be perfectly clear with headhunters that you tried, and point to something to show your interest. Perhaps network with 1-2 clients of each headhunter you meet with, and let them know. They'll recognize the hustle.

Most Helpful
May 22, 2019

Happy to give my two cents:

Not being involved in a DD won't necessarily put you at a disadvantage, but that's only if you can spin your experience to be semi-finance related. When HHs or PE firms read through your resume, they don't want to see how you spent a year helping a company improve their organizational structure and decision making capabilities. You don't have to do a PEG rotation, but they want to know their future associates will have analytical horsepower and financial acumen.

I agree with @Bubba- - you should push hard to get 1 diligence under your belt before sending your resumes to HHs. (having 1 DD and 1 case should suffice). If you're unable to do a PEG rotation, try getting on a case ASAP that touches upon something finance/PE related like post-merger work.

Also, completely agree on the networking piece prior to HH interviews. If you mention during your meeting that you've already spoken to 1-2 associates at a fund you're interesting in, it'll significantly increase your odds of landing an interview there.

Last, recruiting as a second year will be very beneficial to you. Since on-cycle is earlier every year, 1st year IB analysts have nothing on their resume (unless you count doing 6 weeks of training and binding decks). Your 1 year of experience is still valuable, and you can mention that you will be doing a PEG rotation over the next few months.

Happy to answer any follow-up questions on this, and best of luck.

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May 25, 2019
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