Are top PE opportunities really only for the super stars?
Seems like this site really exaggerates the candidates who make it to the top MM and MF firms have to come from elite backgrounds, graduated top 5%, and worked at GS or Evercore. I see a lot of the guys at these top places don't always fit that profile, for those of you in the industry that work with non-targets or kids from not so elite backgrounds at the PE shops, is there some kind of hook you see in them that helped them get there?
Hey johnnybanks1, I'm the WSO Monkey Bot...do any of these help:
No promises, but sometimes if we mention a user, they will share their wisdom: Anish23 Middle Market PE mvaline
You're welcome.
Unfortunately, I think it somewhat is. From what i've been told megafunds love marketing to their LPs that they are hiring the best and brightest. Said another way they love to tell their LPs that 99% of their associate class came from MS/GS/Evercore/Moelis etc. and 90% of their class received undergraduate degrees from Harvard/Wharton/Stanford etc.
Obviously there's exceptions to the rule, but from what I've been told marketing to LPs is their biggest concern. Not what your deal experience is or how much more technically sound you are than the Harvard Goldman kid.
I work at a middle market and we've sent two kids to one megafund (think Apollo/BX/KKR). The first kid that went recruited the second kid. And the first kid got extremely lucky. Was a third year anlayst who sold a company in a niche space to one megafund then we got hired to sell a similar company who ultimately sold to the megafund he ended up at. Basically he was an industry expert and really impressed sponsor with his industry knowledge, modeling and ability to execute key parts of a deal at a very junior level.
thanks for sharing. always wonder how those rare few end up where they are
met plenty of idiots at mega funds dont sell short
how so?
What you have to realize is that junior-level talent is actually more common of a commodity than most people in the first one or two roles in their career think. The real differentiators for long-term success are all soft skills:
Since all these firms are trying to find investment staff to stick around for the long-term, they're not solving for best technical skills (which matter at the junior and intermediate level), they're solving for the soft skills (which matter at the senior level).
If it were the other way around, they'd run a computer-driven assignment and let it be completely meritocratic: take the best performers on the assessment. Note how many startups have tried to create some kind of platform-driven recruiting solution for these firms and have all failed. They were all started by an ex-banker in their 20s who didn't grasp this.
So for the sake of time, the best funds draw only from the places that are statistically most likely to yield them candidates for a pre-MBA associate role who have the highest likelihood of proving themselves on all those qualitative dimensions and thus meriting a partner-track role.
The unfortunate truth is that those people tend to be concentrated at Ivy League or similar schools.
Because of the admissions standards those schools have, the people who comprise the student bodies there tend to come from upper-middle-class families who are likely to have invested in giving their kids exposure to private education / volunteer opportunities / tutoring / other enrichment programs.
Because of the information gap that exists between socioeconomic strata regarding career professions, the Venn diagram between (a) the people from such undergrad schools and (b) the people pursuing a career in high finance makes such academic institutions an even more concentrated pool for a big, prestigious private equity firm looking for junior staff.
In short, while everyone admits that qualified candidates exist outside that norm (of course there's a rockstar analyst from Penn State at Harris Williams or from Emory at Suntrust), it's a hell of a lot easier to just tell Dynamics or Henkel to pull only HYPSW 3.8+ from Evercore, GS, MS, and PJT.
Part of it is also complacency. "If they deserve to get through somehow, we'll take 'em." That's how the guy alphajon knew got through. He stood out and sure looked like he deserved it. A combination of right place (the middle market bank doing a deal that successfully brought a megafund into process) / right time (having bandwidth to receive the staffing) / right guy (smart enough to perform well on the first deal such that he was rock-solid on the second deal to the point the megafund on the second deal loved him).
It's shitty, there's no getting around it. I don't subscribe to that thinking, but I've been in enough rooms that I can tell you how it is.
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