Best Route into Middle Market Private Equity
What do you feel is the best route into middle market private equity? There is lots of talk on this site and others about banks/groups that place well into megafunds, but no one talks much about middle market buyout shops.
Are there specific groups that set you up well for these funds? Are they different than banks/groups that place well at megafunds?
I don't think there's much of a difference. In the end bulge bracket banks give everyone a good diversified set of experience and prepare you well for most opportunities in finance. Also, it sounds like you're not working yet. I suggest that you try to get a job at a bulge bracket first. Who knows whether you're still interested in doing mid-market PE after a year of banking. I tend to find that this site has a strong bias towards mid-market PE. I'm not saying it's wrong, but you should give yourself the opportunity to figure out your next steps on your own.
you might want to consider the consulting route, and in particular, bain. some of the best middle market shops- golden gate, berkshire, charlesbank, new mountain, etc- tend to hire a lot of people out of bain and some of the other consulting firms. i know that the conventional wisdom suggests that banking is a better route into PE than consulting, but i think if your goal is MM PE then you'd have very good odds of landing in a good place if you came out of bain with 2-3 years of PEG experience. McKinsey/BCG can get you there as well, but I think its easiest coming out of Bain given that it is a very established route and the Bain PEG partners have relationships with most of the relevant MM PE firms. good luck- hope this helps.
it's the same candidates who didn't make it to the mega funds.
top banks, top groups.
You should always choose GS/MS or some good groups in other banks over Bain if you want to move into PE
I think there's a myth around here that the GS/MS goes to KKR and middle-market banks go to MM PE shops. It depends on what you mean by MM PE.
If you mean Berkshire, H&F, CD&R etc. those are phenomenal funds that primarily take the extremely smart, well-rounded GS/MS/Blackstone M&A and restructuring candidates (barring exceptional deal experience or senior recs). Even coming out of an average group at a great but not top tier bank (JPM, LAZ, CS) it'll be an uphill battle to break into one of those funds.
Coming out of an MM bank only becomes beneficial at the lower middle market funds (think sub $1 billion), and even then there are plenty of $1 billion funds who really prefer GS/MS analysts
Can't comment on consulting, but there seems to be a couple of guys from McK/Bain scattered across the top MMs.
Thanks to all for the advice.
Bottom line is to get the best job you can and see what works out in the end. Most people on WSO take a 'never say never' approach, but an analyst coming out of a top group at a top BB will have more choices than someone coming out of a good MM IB...and that's not to say the latter won't have sold opportunities available to them.
What I'm saying is, don't shoot 'low' because you "only" want MM PE in the future. Make your job search as easy as possible by coming from the best shop you can manage to get into.
Regards
you should note that virtually every private equity firm in the world is a middle market private equity firm. only 10 firms or so (with a broad definition of megafund) can actually be called a megafund. some funds with huge fund sizes ($8+ billion) also do tons of smaller, mid-market investments that some middle market firms even do larger deals despite smaller funds.
the top tier middle market funds are virtually as selective as "megafunds" (again broad definition) and most are quite finicky about pedigree (top tier undergrad, top tier job out of undergrad, or both). if you have hundreds of quality applicants for maybe 3-8 associate spots and even only 30% of those applicants from MBB or BB banks, it will be tough to justify "dipping lower."
networking is key. get in touch with school alumni now. just establish relationships and connections. not only will those people have similar experiences and potentially be good mentors, but they'll also be able to vouch for you. if they have a good rep internally (kind of necessary if you want to survive from mid level higher), then that will really mean something. pe is similar to banking in that it's a very relationship-based business.
brace yourself for a tough process. pe firms are small groups of people and the investment professionals are constantly gauging/reading people. people will form strong views of you early on and in my experience, you will know somewhere mid-way people's interest in you. it may take some time for you to find that group of people that clicks with you. plus, naturally, it's a super competitive process.
It really depends.
If the fund is $1 billion and up, then working at a BB bank will be best. Below $1 billion, you can definitely do it from a top MM bank. If it's regional, then you can probably do $1B funds out of a MM bank. If it's $500M and below, you'll probably get there out of a middle market bank (this is what I did.)
Non dolores necessitatibus eaque quis nostrum. Facilis doloremque itaque et sint dolore. Assumenda dignissimos sit aut. Nam nostrum aperiam quia sed. Libero qui autem ex iusto magnam cumque ratione. Quo facilis ut quia eligendi ut aut eius.
Sint molestiae et voluptatem modi est vitae aliquam. Quos quis optio officiis soluta nihil consectetur.
Qui quia non perspiciatis ut harum sed. Aut ipsam qui aut non similique saepe voluptas. Repellendus est illum autem et id perferendis enim voluptate. Laborum est dolores ut quisquam beatae. Temporibus deserunt sint enim magnam ut rem suscipit.
Sit architecto dolorem laudantium earum. Atque animi animi qui occaecati sint ea. Dolor quia ipsa asperiores aut iste. Rem voluptatum quaerat sequi ex blanditiis. Pariatur dolores cumque temporibus fugit omnis libero. Quia quo error est optio animi.
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...