Comments (202)

Jun 14, 2011

What is "extensive training in M&A"? Lemme guess, you took corp fin in school and you read a couple books and maybe an interview manual. Please tell an interviewer you have "extensive training" but no experience. Film it and post it on youtube. Please and Thank you.

"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."

    • 1
Jun 14, 2011

Must have done the Investment Banking Institute in Switzerland.

Jun 14, 2011

It depends on what you mean by top notch M&A boutique. If you mean places like Evercore Lazard Greenhill Gleacher Perella...etc, those places will get you into PE faster than any bulge bracket.

Jun 14, 2011

I don't really think there is a question. Even if its not Evercore, Greenhill, and its a Sagent Advisors, ThinkEquity, in my experience the M&A experience will trump any "Bearingpoint-ish" experience. Go M&A man...

Jun 14, 2011

"top notch M&A boutique "

this is good. you take this. you take this now. i cook little children for dinner.

Jun 14, 2011

not that prestigious - think one notch below those shops

Jun 14, 2011

I would go with the boutique. While there are people who make the transition from tier-2 consulting to private equity, this is extremely rare.

Jun 14, 2011

again, what is 2nd tier consulting? If we assume first tier are places like Bain,BCG then 2nd tier is like Oliver Wyman? obviously bain and wyman are amazing for PE (and bain is as good as if not better than any bulge bracket). oliver wyman would be much better than like a place sargent

Jun 14, 2011

think along the lines of deloitte, capgemini, ibm, etc

Jun 14, 2011
Kimbo Slice:

think along the lines of deloitte, capgemini, ibm, etc

These places suck for PE placement...avoid Go with the top tier M&A boutique (assuming you are talking Laz/Greenhill/PWP/Evercore)

Canuck

Jun 14, 2011

I would take the M&A route. PE funds like people with the modeling experience. I dont know how much of that one of those few consulting firms mentioned will give you.

Jun 14, 2011

you could try starting off at a smaller PE fund. you don't get the name of a PWP, Evercore, Lazard, etc., but you do get the best experience

Jun 14, 2011

Even the Wall Street Journal agrees - see http://blogs.wsj.com/deals/2007/09/26/mba-grads-to...
"The private-equity industry hires people that have modeling or deal experience," said Julie Morton, associate dean of career services at the University of Chicago Graduate School of Business. "So unless you have banking experience prior to school, it's unlikely you bring that skill set to the table."

People talk about transitioning over from consulting to PE and while it is possible, I think it's more common at growth equity places like TCV/TA/Summit etc. If you look at most bios of PE guys most have done banking previously, especially at the bigger places. Banking is just a safer bet if you want to do PE.

Jun 14, 2011

Not to be the bearer of bad news here, but it is extremely difficult to switch into PE post-MBA if you had not been an ibanking analyst prior to B-School. Therefore you need to ask yourself, if PE doesn't work out, what do you want to be doing in 2-3 years? Finance, consulting or something else? And, which are you going to enjoy more and get more out of in the meantime? Having said all this, your chances of PE are likely slightly better from M&A than from second tier consulting, but it's going to be a longshot.

Jun 14, 2011
ex-banker:

Not to be the bearer of bad news here, but it is extremely difficult to switch into PE post-MBA if you had not been an ibanking analyst prior to B-School. Therefore you need to ask yourself, if PE doesn't work out, what do you want to be doing in 2-3 years? Finance, consulting or something else? And, which are you going to enjoy more and get more out of in the meantime? Having said all this, your chances of PE are likely slightly better from M&A than from second tier consulting, but it's going to be a longshot.

While I understand this to be the case, why is this so? Why exactly do PE shops care whether you've gotten your IB experience pre or post mba?

Jun 14, 2011

i've heard a private equity recruiter say once that the "dream candidate" for pe shops has done both consulting and i-banking prior to business school. he showed the short bio of a guy who had done 2 years at mbb, 2years in m&a and then completed his mba at a decent school, getting hired by one of the big pe players afterwards. but then i wonder: how easy is it for "strategy consultants" to switch into m&a?

Jun 14, 2011

Regardless of how easy or hard the transfer might be, I can't see why you'd want to do it. The rationale behind PE shops hiring from both consulting and IB is that you get talented candidates with complementary skill sets. Once in PE, candidates from IB learn more about strategy and candidates from management consulting learn more about finance. Starting "fresh" in either industry would be miserable, and you'd probably spend a lot of time learning redundant things, since the core pieces of each skillset (e.g., the ability to build flexible models, attention to detail) are more similar than most believe.

Jun 14, 2011

to ex-banker: for someone who has done banking at a BB before business school and then M/B/B after that (or vice versa, M/B/B before and BB after), how easy is it to switch to private equity in a megafund after a couple of years?

Jun 14, 2011

B_m: I don't know the answer to this. I do have a good friend at M, and I will ask him if he has a sense for how many people make that switch post-MBA. i'll post here again if i get some info.

KS: I don't really have a great answer here either other than, that's just the way it is. However, keep in mind that the experience you get as an analyst is different from that of an associate. Analysts have much better technical/modeling skills. Those are pretty much the skills that PE shops are looking for at the junior level. They will teach/train/mold you the rest. Also, the average analyst is smarter than the average associate (don't take offense - i wasn't an analyst either). So, it sort of comes down to why should PE firms pay more money for less (relevant) skilled and less intelligent people on average, especially since there are so few slots in PE (unlike in banking). anyone else have thoughts on this?

Jun 14, 2011

Don't have a great answer either, but generally agree with ex-bankers' conclusion here.

Jun 14, 2011

I agree with smuguy and ex-banker about PE being extremely hard to get into post-MBA (although not impossible, plenty of associates from my bank's sponsors group landed PE jobs). I'll even take it one step further: even people with pre-mba IB experience, and I'm talking top-tier, 3 years at a BB doing good deals from top 3 B-schools have an extremely hard time landing PE gigs.

I'll tell you why.

Think of it from a PE shop's perspective. Banking and top tier consulting make for great feeders into private equity early in one's career (i.e. after two years out of undergrad) because you usually have very smart, capable candidates with usable prior skillsets, yet they are "moldable" enough to learn the additional skills needed in PE, and do them well. If you do not have prior IB experience and have a top-tier MBA, you will still find it near impossible to break into PE because you're competing against people with PE and IB experience pre-MBA.

Ok, so let's say you do two years at a bank as an associate and want to break into PE. Still extremely difficult. The reason is that the post-MBA associate in a decent sized PE firm is expected to take on a MUCH MUCH larger portion of responsibility than an associate at a bank. Associates at banks are oftentimes just like analysts, not alot of thinking, alot of processing. Post-MBA's at bigger PE shops are expected to run entire processes, help negotiate credit agreements, work with the pre-MBA associate to develop the model, a memo to the investment committee, and initial views on investments. On top of that, they need to weed through the diligence materials with a fine-toothed comb, and juggle the lawyers, auditors, bankers, company management, etc. PE shops simply do not want to entrust this role to someone who's never experienced it firsthand as a pre-MBA associate. And with plenty of qualified pre-MBA's out there looking for good positions, why would they choose someone from banking?

While I was in banking I ran across a few people that did three years as an analyst, went to top b-schools, and came back to banking. Why? Because they couldn't find PE jobs and no other industry paid as well. Plus, they figured they could wait a few years and get into PE. So far, they've been unsuccessful. It's not that these people aren't smart and entirely capable of doing the job, and PE shops know this. But no one ever said PE shops needed to be reasonable about their hiring, either...especially in this market.

Jun 14, 2011

gametheory, great post

Jun 14, 2011

thanks for the perspectives GameTheory -- terrific post

Jun 14, 2011

Gametheory, great post, thank you. Would your analysis be any different if the post-mba banker also had a law degree and had some legal practice experience?

Jun 14, 2011

Every additional skillset you can bring to the table is a potential advantage over other candidates. The hardest part is getting over that initial barrier that recruiters for PE and PE firms themselves may have against any non-"cookie cutter" candidates.

This line of thinking transcends to more than just your situation. It also applies to people from outside the bulge bracket banks, non-target schools, non-target "groups" (i.e. FIG, Real Estate, Capital Markets, Equity Research, etc.), or any combination of the three. Even with the perfect background, it's all about fit.

I know of at least three big PE firms (one of them is a top-tier) that have been looking for the last candidate for their '08 class since April, when their process started. Believe me, it's not because they are short on interviewees...they are just THAT picky. And just because they set out at the beginning of the year to find X amount of candidates doesn't mean by any stretch that they will hire that many.

Jun 14, 2011

Here's a story for you.... I was contacted by a recruiter working for a small (as in $$ under management only a few hundred million), just barely started PE firm. They had interviewed 100+ Associate candidates for over a year and had only given out 1 offer in that entire time. Needless to say I didn't get this one, went through a few rounds of interviews and they took a wait-and-see approach.

I asked them why they were so picky and basically they said, "Because we can afford to be and because we're looking for the perfect candidate. Right now we have mostly VP-level and above people, but we can do the work ourselves... we would hire an Associate to assist us and reduce some of the burden, but they're not crucial to have unless we get so overwhelmed we really need the help."

In fact this applies to more than just finance jobs - in general companies would rather overwork employees temporarily instead of making a bad hire.

At a lot of PE shops the Associates/VPs etc. up to MD/Partner (actually even Partners in PE tend to be more hands-on from MDs in banking from what I've seen....) do essentially the same type of work. So from their perspective, why should they hire someone with no experience when they could get someone already in PE looking to switch firms to do some of their work and do it well?

Jun 14, 2011

One other thing I'll touch on...

If you find yourself as an associate in banking and really do want to make the switch to PE - I'm assuming you realize that PE is not the end-all, be-all, and that at the core of it all, if you despise the work you're doing in banking you will hate PE, as well...I encourage everyone who wants to make the transistion to PE to do it for the right reasons - I can tell you the best way to do it:

1) First and foremost, you need to learn as much as you can as quickly as you can. You need to be just as good or better technically than your competition...this is a no-brainer. You also need to be a top-ranked associate, success breeds success...attitude is everything and being a well-liked, hard worker will only bring you the best staffings and beget the best experience.
2) You need to be in a group that is pretty open to people leaving for the buyside. While no group likes to see people go (especially top performers), certain groups out there at least "get it." Meaning they realize turnover is part of the business and you might as well go to a client than a competitor. One major disclaimer: the possibility of you landing in a group like this becomes much more remote at the associate level vs. analyst.
3) During the course of your deals, you need to get close to the senior people in your group. If you manage to land interviews sponsors WILL call the most senior person they have a relationship with in your group and ask them point blank about your performance.
4) Sometimes it's just plain luck, but do some subtle networking with your sponsor clients when you work on sponsor related deals. Obviously, the name of the game is to talk through the quality of your work, not gush to the nearest principal about how badly you want to leave banking.

1-3 (sometimes 4) obviously thoroughly apply to analysts, as well.

The associates I've seen leave for sponsors have almost always been highly regarded guys that happened to work closely with sponsors on deals. It comes to no surprise that the sponsors group has had the most success...

Jun 14, 2011

GameTheory, do you know which BB groups are "pretty open" to people leaving for the buyside? Head of my group told us that he doesn't like associates leaving for the buy-side and he's well known for being very aggressive in retaining strong performers (vs. buy-side or other banks), and he doesn't give good references.

Jun 14, 2011

Banana_Milkshake: Just my two cents worth- Doesn't that depend on which team you are in rather than the bank in general? I would be surprised to find BBs with uniformed practices on things like these.

Jun 14, 2011

yeah - it's group specific.

Jun 14, 2011

I could only tell you a few of the specific groups at my former bank, so probably not that helpful to you specifically.

Jun 14, 2011

Through some luck, I managed to get a job in PE straight out of undergrad. I work as an analyst in the PE group of a large multistrategy hedge fund with a niche industry focus (ex. energy). The fund is very well respected in the industry and has major industry heavyweights as advisors/board members and ~10 billion AUM. What I'm wondering though is if large buyout funds would prefer to hire an analyst from a major BB with generalized training and small exposure to massive deals, or an analyst with 2 years doing specialized private equity / hedge fund investments of a smaller average size in a particular industry?

Jun 14, 2011

instead of consulting, how about three years doing pe law at a top law firm (as a mid levl associate) instead of the m&a boutique? Which would be a better bet for switching to pe? How about switching to banking at the VP level?

Jun 14, 2011

Wow, congratulations. That's great stuff. Assuming you're accepted to either one of those schools, I think the best thing would be to talk with someone there about your concern. Obviously they know exactly what you're talking about, so they might be willing to help you devise a strategy. As you may know, they are now helping their 2+2 applicants complete two year stints at various firms, include many consulting/IBD groups. My hunch is if you come to them, they will help you out.

Good luck!

Jun 14, 2011

just have your dad make a phone call to some pe guys and ask them if they could take you on at a measly $120K a year (thats the base salary only, obviously you'll bringing in at least half a million in bonuses/carried interest) and go from there.

We're about to enter a Great Depression.
Don't you want a president who's already dressed for it?

I'm making it up as I go along.

Jun 14, 2011

Thank you for the advice Alphaholic. I had spoken with someone at HBS during their college seniors day, and they simply mentioned the possibility of deferring matriculation for 1-2 years while gaining some work experience. This wouldn't be helpful, as it would simply allow me to gain IB work experience, but not pre-MBA PE work experience, which is with what I am most concerned. I feel that most of the adcom don't actually have very much experience with employment recruiting.

Jun 14, 2011

Uhm... Ibanking is the closest experience you can get to PE... If you understand the sell-side deal processes then you'll definetley understand the buy-side alot more.. Plus, you need the modeling experience. PE firms are lean, small deal teams where the Associate handles the bulk of the work so modelling is highly preferrable unless they have a template... What you'll learn at in your MBA theoretical finance class is crap compared to learning about legal documentation and real finance termanology and work...

Jun 14, 2011

I was under the impression that HBS heavily favored some work experience in their candidates.

Jun 14, 2011

MezzCat, i think his point is just doing banking before going to HBS/GSB won't position himself that much better than anyone else without any pre-MBA PE experience... which i think is partially true. if you don't have PE on your resume before going to HBS/Stanford, the people who do at those schools are going to get most of the PE interviews when the firms get to campus

the reason i say partially, getting a PE job w/o pre-MBA experience has been done before, but i hear it's tough... it's gotta be near impossible without any work experience at all.

Jun 14, 2011

FreeCashFool - yes, that is my concern. Would it be advisable to reapply in 4-5 years after doing both the IB analyst program and a pre-MBA PE associate program or is there a way around this? Time-wise, it would make much more sense to just do the MBA now, but I fear that I am closing future doors by doing so. The reason that I applied to HBS so early is because I feel that at this point in my life my profile is unique enough where it might get me in. I fear that if I pass up this opportunity and reapply a few years down the line, I might not be able to get in.

Jun 14, 2011

and the concensus on these boards, PE shops big and small do favor 1-2 years in banking and 2-4 in PE before b-school as you've said.

Find someone else at H/S and talk with them. Explain to them your situation, and ask their advice. Once you're in, look to speak with someone from their career center. Obviously they will know better than adcomm.

Jun 14, 2011

If you go directly to an MBA program from undergrad rather than gaining some work experience, you are going to close a lot of opportunities, not just PE....

Jun 14, 2011

I'm from Europe and MBAs are not so common over here as opposed to the US, so I was wondering why someone would go back to business school when already having a job in a PE firm? I always thought people would do it after 1-5 years work experience in order to reach another level career-wise or just to switch industries, like from IT into Finance or more common from I-Banking into PE. If they are already in PE, what's the sense? just to build a network? one could assume by then they would have built a strong network already anyway..?

Jun 14, 2011

@uru: personally, i wouldn't go to b-school right after undergrad because i do believe it closes some doors... plus you're not nearly as marketable as the people you're competing with in your class (when they already have 2-5 years of experience). it's the same idea from a PE perspective.. you won't have PE experience or any modeling/due diligence experience from banking/consulting, so why would any PE firm recruit you?

i think it's a worthy gamble... defer 2 years, go do your IB stint, interview with PE firms, if things don't shake out, then go to b-school. if things do work out, tell HBS/GSB sorry that you have to defer longer or you'll reapply when the time is right.

of course this is all moot if you don't get in, but here's hoping you do.. you have some good options ahead of you.

@panta_rhei: my sense for this is that people are burnt out after 2 yrs of banking and 2 yrs of PE... you need time to recover and b-school is a perfect, sensible way of doing that without sacrificing your career. PE firms generally are big supporters of their pre-MBAs going off to b-school too because they feel the network is quite valuable. that said, if you can withstand the grind and you do get an offer to stay, then getting an MBA is probably suboptimal

Jun 14, 2011

If I had an offer to continue on as a post-MBA without getting one, I would. Most bigger funds require MBA's, though.

Jun 14, 2011

follow-up question: how possible is it to go from being a banking Associate to a PE Associate (Undergrad -> MBA -> IB -> PE)? Would this be at all possible?

Jun 14, 2011

Blackstone, Silver Lake and Bain have hired PE "analysts" this year - Silver Lake in particular has recently increased the size of this program. These are jobs right out of college and they work on deal teams with "associates" - the pre-mba former banking analysts.

HBS and GSB have given people out of college two year deferrals. Not as a part of the 2+2 program at HBS

Bottom line is that given the market blows and there are so many hitters coming out of the labor market, both HBS and GSB may be more accommodating in relinquishing one of the spots this year than most. Get in. Be pumped. And then worry about the game plan to PE - which will likely be different two years from now. Good Luck.

Jun 14, 2011

out of that group of banks, i sure hope you're at jefferies. i've seen bankers from jefferies at mm pe funds, but havent really seen any from rbs, nomura and macquarie. if you're not at jefferies, you'll prob have to focus more external networking stuff and it will be much more work. i guess it also depends where your office location is too

Jun 14, 2011

I agree with ledger123. I've never seen anyone from those banks (other than Jefferies) at > $2B AUM MM PE shops. Macquarie's FIG group could be a small exception given they acquired Cochran Caronia, a fairly well-respected insurance-focused boutique.

Recruiters will put you in a database, but unless you blow them away in your info interview, they're unlikely to fight for you when they have more of a "sure thing" in Analysts from larger, BB firms who will have the same GPA and undegrad pedigree as you.

You're going to need to work the external networking or lateral to a larger bank. I know my comments make the PE recruiting process sound very shallow, but sadly, that's exactly what it is.

Jun 14, 2011

the yellow brick road.

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

Jun 14, 2011

Echo above sentiments. Jefferies would still be an uphill battle but miles beyond the others mentioned in terms of exit ops, pay, and in general. Try to lateral after a year. If you happen to be at Macquarie and are placed in Infrastructure you may be able to get into an infra arm of a PE.

Jun 14, 2011

"uphill battle" is a stretch for jefferies - you actually have a reasonable shot (though by no means guaranteed) at places in the $2-5B range assuming you interview well, though you can probably count out the blackstones of the world.

If you're at any of the other places you're going to have some serious trouble though.

Array

Jun 14, 2011

you will have a tough time even at jef. If you are in leveraged finance or something, you can get to a capital market role at some PE funds but as someone from jef generalist (i think they have a generalist pool in nyc now? not sure) or someone from jef tech...you will have a tough time competing with other BB guys fighting for the same spot.

Jun 14, 2011

^true. when i said i see people from JEF, i meant smaller MM PE funds (maybe $500m to >$1b). it'll be much tougher for funds > $2b.

Jun 14, 2011

sorry, i should have been more specific - I just wanted to say that it is possible to get to a 2B+ fund from JEF, didn't mean to imply that it is easy.

I know one guy who's puleed it off in the past couple years, so assuming they have ~20 ppl in analyst class, that would mean 1 in 40? still better than your chances from macq, nomura, etc.

Array

Jun 14, 2011

Greater than $2 billion fund might be tough, but JEF definitely places pretty well at MM PE shops (I'd consider >$2B upper MM) -- but I'd lower expectations a bit.

Jun 14, 2011

echoing everyone above, out of those banks JEF generally provides the best chance to enter MM PE, however I will say that it is also group specific, as levfin / M&A heavy groups will give you a better chance.

you will get less calls from recruiters than guys at BBs and elite boutiques, but don't let that stop you. If you separate yourself as a good analyst at your firm and work hard to network and secure buyside interviews, there is no doubt you can land a good gig after IB.

As jimbrown said, above $2bn might be tough, simply due to the competition, but don't let that >$2bn blind you, as there are plenty of awesome firms below that threshold. When looking for buyside shops, you should focus more on the location, people, cultuer and track record of the firm. One of the smartest kids I know is working at a sub $1bn fund, and prob does some of the coolest shit and loves his job.

Jun 14, 2011

Jefferies analysts have gone to HIG capital, ares management, matlinpatterson, sun capital, TA, summit, kkr capital markets, and a bunch more great funds. Granted alot were in restructuring when the market was busy but JEF does open doors, just not as many as a bulge

Jun 14, 2011
  • It's going to be an uphill battle from any of those; although there are a number of $2B+ AUM funds out there and with the right networking/resume you might have a shot
  • It depends on your group... obvi Restructuring / LevFin from JEF will be quite different from crap industry group from Nomura/Macq/RBS/etc. etc.
  • It also depends on YOU. How good your own credentials are. Are you at least magna cum laude from a top tier school? Does your school have a strong alumni base?

Nothing is formulaic, so anything is really possible.

Jun 14, 2011

sorry to hijak...

since we are talking MM...how does Wells Fargo place into sub 1b funds? How do they compare to jefferies?

Jun 14, 2011

wells is ok. To be honest, getting into any solid funds (talking about LBO buyout shops or credit funds here, not growth guys) will be tough with a bank that's not gs, ms, jpm. People sometimes even hype up how "you do 2 years of banking and you get a PE job!" is so easy. Reality is, if you are not at top groups, you are the beggar. Yes, there will be people from wells, jef, db, citi, ubs, barclays, etc. going to very good/solid funds, but it's far from the norm and should not be expected.

Jun 14, 2011
Ricqles:

wells is ok. To be honest, getting into any solid funds (talking about LBO buyout shops or credit funds here, not growth guys) will be tough with a bank that's not gs, ms, jpm. People sometimes even hype up how "you do 2 years of banking and you get a PE job!" is so easy. Reality is, if you are not at top groups, you are the beggar. Yes, there will be people from wells, jef, db, citi, ubs, barclays, etc. going to very good/solid funds, but it's far from the norm and should not be expected.

So someone from Citi or CS M&A is less likely than JPM or MS (insert random industry group) to land at a good shop just because of bank name, irrespective of group strength, experience, connections with senior people, etc, etc? Unlikely. GS, you can make a solid arguement for since they do all their modeling within coverage groups. Other than that, I think the prestiege monster may have bit you just a little

Jun 14, 2011

Completely echo the sentiment above.

I'm not exaggerating when I say that the conversion rate from # of resumes reviewed to offers given is approaching 2% at my fund (i.e. we reviewed 200-250 resumes this year from recruiters and our own network, we probably interviewed 30-40 kids in the first round to fill 3 spots.

And of the 200+ resumes we saw, I'd say greater than 80% were from GS, MS, JPM, CS, DB, Citi, UBS or BAML.

Jun 14, 2011

how big is the fund you're at?

Jun 14, 2011

In the $1B-$3B range.

Jun 14, 2011

I was talking along the lives of <1B funds focused mostly on growth/vc.

Jun 14, 2011

i havent seen any one from wells in pe. basically if you want >$3b funds, most likely they'll be from bbs (obviously some groups place much better than others) and elite boutiques. sub <$3b funds, you see a lot of the really good mm funds (blair, jef, hw). of course there are bb analysts at smaller funds and mm analysts at larger funds too.

Jun 14, 2011
ledger123:

i havent seen any one from wells in pe. basically if you want >$3b funds, most likely they'll be from bbs (obviously some groups place much better than others) and elite boutiques. sub <$3b funds, you see a lot of the really good mm funds (blair, jef, hw). of course there are bb analysts at smaller funds and mm analysts at larger funds too.

http://www.pamlicocapital.com/Team/Default.aspx
Regards

Jun 14, 2011

Oh okay, so what you are saying is that top recruits for top MM and Megafunds are everyone at GS, MS and JPM, and those at strong groups at other firms? Well, considering GS, MS and JPM all have strong and weak groups, I'm going to call bull shit on your generalization. As I said before, no matter whether you are at GS, MS, JPM, CS, Citi, DB, Lazzard, BX, Evercore, etc. its about the strength of your group and your personal experience.
So you don't work at any of these theree. Interesting. I think its safe to also say that you are either in a horrible group, or you don't work at a BB or elite boutique. You seem pretty disillusioned with your recruiting process. Either that or you actually haven't gone through recruiting, and you are just making general statements.

Jun 14, 2011

This is so dumb. Grow up. PE recruiting is tough. GS/MS/JPM get first looks. Easier to get in from those than from others. Elite boutiques place well too. You can still get in, and many do, from C/CS/UBS/BAML/etc. Depends a lot on the person, the market, etc.

Jesus Christ this board is ridiculous sometimes.

Jun 14, 2011

welcome moneymax...you can start in the PE section fo our FAQs: //www.wallstreetoasis.com/frequently-asked-questions...

Jun 14, 2011

Post MBA PE without pre-MBA PE Is extremely unlikely, impossible at megafunds. Maybe some people can speak to some niche small/middle market PE firms that recruit people with no PE/IBD experience, but I have yet to meet someone who can vouch for that.

Jun 14, 2011

some have made it to PE via corp dev

Jun 14, 2011

its possible but the ppl who have doen it that way often come from very different backgrounds (as you can expect). for example, some PE firms like ppl with MDs and other advanced degrees, so you sometimes see these folks there. Naturally, they come from a different background and don't have that 2 years of IB post college. that said, it's pretty rare.

Jun 14, 2011

I worked at a peg last fall that hired "Operating Associates"

"Respect others in their view, and demand that they respect yours. Love your life, perfect your life, beautify all things in your life."

Jun 14, 2011
craigje1992:

I worked at a peg last fall that hired "Operating Associates"

Thanks. Could you be more specific what kind of responsibilities you had? Was the position something like a internal consulting role just like the KKR capstone? In terms of career development, what is the typical path and is there any chance to transition to a traditional PE role (e.g. investment)? thx

Jun 14, 2011

Perhaps smaller PE houses wouldnt mind taking on people with experience in valuations work?

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Jun 14, 2011

Blackstone undergrand and the like.

Jun 14, 2011

When does Blackstone start looking at applications?

Jun 14, 2011

If you get that far professionally after 2-3 years in BB banking then the school only matters insofar that someone at the firm is an alumnus. e.g. so middlebury might have helped the most if you were applying for a HF job early on at moore capital.

I don't know about GPA. I think it only matters if it was low. I don't think anyone would differentiate between a 3.7 and a 3.8. That's just splitting hairs!

Jun 14, 2011

Will be pretty difficult, there's just an excess supply of people with IB + PE + MBA trying to go back. Plus, lots of MBAs want to break into PE.

Jun 14, 2011

you might be able to make a value play on your management/industry experience if you get an MBA and go to a top consulting firm and then lateral into PE...the problem with this approach is that there are only some funds which hire consultants, and you need to be at one of the top 3 consulting firms to even have a chance.

Jun 14, 2011

They're higher than most I would imagine. A number of people at our shop made the move after working on mostly sponsor backed deals. It'd make your case that bit stronger if you had good visibility with the seniors at the PE shops too - not just your peers. Make sure that you're not just seen as the IB monkey doing the modelling, but get involved in the structuring etc etc. Even if its just getting your voice heard on those conf calls or attending (and speaking up) at all transaction meetings. A lot of the best moves, as you well know, aren't advertised. Contacts and word of mouth are where its at baby.

Good luck!

Jun 14, 2011

thanks for the help

Jun 14, 2011

i had a friend at MS/GS type shop and he said that headhunters would just call them and schedule apts

Jun 14, 2011

networking, emailing firms directly <- do it, it works.

Jun 14, 2011

...and i had no prior banking experience.

roofstreet:

networking, emailing firms directly <- do it, it works.

Jun 14, 2011

Headhunters. Half of them you email and half of them emailed me (this was at a mid-tier BB).

Jun 14, 2011

Networking/cold calling. I had front-office banking experience but not as applicable as M&A/LevFin. Of course, I still got vetted and had to do an in-depth case study to make sure I knew my shit, but I was lucky that someone even gave me a chance to prove myself.

Jun 14, 2011
mrb87:

Networking/cold calling. I had front-office banking experience but not as applicable as M&A/LevFin. Of course, I still got vetted and had to do an in-depth case study to make sure I knew my shit, but I was lucky that someone even gave me a chance to prove myself.

If you did some networking to get into IBD (as an undergrad, lateral, etc.), did PE networking differ at all? If so, what were the main differences?

Jun 14, 2011

I was more direct in PE recruiting

Jun 14, 2011

I made the rounds with most of the main headhunters and had a few calls on postings that really intrigued me and that they were pushing so I went through the processes.

Jun 14, 2011

assuming for associate position?

entrance into pe most always from 2 backgrounds: IB or top-tier consulting. otherwise, very difficult to come by. mba won't be too helpful as most assoc positons are pre-mba. post-mba, most vp hires had previous pe experience.

moving into m&a is step in the right direction. shops want to see deal experience, that you can run a process, etc

Jun 14, 2011

thanks for that, I am also getting worried about my age I am 27 and so doing a stint in M&A now will mean starting as an associate in PE at like 30? Am I wrong to think that a lot of people start later in that career? or will I be competing against a lot of young kids coming out from M&A?

Jun 14, 2011

I have the same situatio at being 29! lots of competition

Jun 14, 2011

my experience has been shops generally recruit IB analysts who have just completed 2-3 yrs... puts them at about 24-25 by the time they start as associates

Jun 14, 2011

IB, restructuring and consulting are the most ideal path into PE, but at the lower end of the food chain you could probably pull of something off with the right experience relating to the everyday activities of a PE associate, such as modeling and credit analysis. I say this because now a days PE firms conduct an array of transactions to make money other than buying out whole companies. But, in order to accomplish this you might need to network your butt off and convince someone to give you a chance and the MBA should help as well.

You know Blackstone has a credit fund called GSO, and so does many other PE funds. I am pretty sure your background in structured products must have something to do with their daily activities.

Jun 14, 2011

dnt do much modelling I am afraid, but we do do credit analysis, do you think that maybe a course in financial modelling would make up for not having taken the usual IB path? thks vm for previous answer

Jun 14, 2011

.

Jun 14, 2011

While it's obviously not ideal, starting as associate at a PE firm at 30 would be absolutely fine. Many of the best / most selective PE firms only hire associates who have already been associates at banks / other PE shops for a while, and who had substantial experience before they did their MBA.... average age for associate at some top PE firms is like 28-29... it's not uncommon for an associate from a different background to be 30-34...

That being said, you better start moving in the right direction quickly!

Jun 14, 2011

1) You're definitely at a disadvantage -- I wouldn't say you have no shot

2) Eh, probably not as big as you'd think, but definitely in an advantageous position

3) Incorrect, but sort of. As an IB analyst, you can pretty much always go to a generalist PE firm, even if you were focused on a particular industry in IB. If you were a healthcare analyst, you could certainly join a non healthcare PE fund. Same goes with TMT. It is less-so the other way around. If you want to go to a HC or TMT focused PE fund, you're at a big disadvantage if you don't have HC or TMT experience. On the super specialized groups like FIG or "Gaming," you may see more specialization issues than you would with HC/TMT/Industrials.

Jun 14, 2011

banking is def. the most common routes. consultants can also get into pe. if you do bschool without prior pe experience (pre-mba associate stint), its REALLY REALLY difficult to get into pe afterwards

Jun 14, 2011

Is it as difficult for someone who has worked in research & valuations then gone to a top 20 MBA to get into PE?

Jun 14, 2011

A lot of PE shops only recruit MBAs from a handful of schools (i.e. HSW, Col, Chi , etc.) and without prior PE experience it is exponentially more difficult. PE recruiting is competitive bc demand is high, shops run lean and you are competing against some of the brightest/most qualified applicants in the world (in finance).

PE (esp now relative to 3 years ago) is not nearly as exciting as people make it out to be. It is literally the same deal cycle and due diligence process over and over again (granted each transaction comes with its own skeletons and idiosyncrasies). My responsibilities today (portfolio management, cost cutting initiatives, refinancing, trying to stay in business) are a lot different from those of 2-3 years ago (reviewing tons of deals, submitting bids on everything, going to closing dinners/parties/etc., even the due diligence process was much less granular and bidding processes were more streamlined/competitive).

IB to PE is your best bet

Jun 14, 2011

Read the Glocap and the WSO PE guides. They answer this question in exhaustive detail.

Jun 14, 2011

If you have an idea of what industry focus you would like to have when you get a PE gig you can try to gain operational experience in that particular industry. Ultimately IB and consulting backgrounds give you the best shot but there are other ways. As far as recruiting at certain schools...this is true for most funds but if you aren't set on working for a large/mega fund, PE shops tend to be very loyal to their schools. UVA is one of the schools that seem to just be as loyal as they come. I can't tell you how many times I have ran across a middle market PE firm with a MD from UVA that has nothing (or nearly nothing) but UVA grads. Best of luck to you.

Regards

Jun 14, 2011
Jun 14, 2011

Senior in undergrad right now so discount any and all input.

Business Performance Services is a severe backup for me right now. The work does not seem to tie into PE at all into me. It seems like Management consulting with a strong focus on accounting.

Just my take on it.

Jun 14, 2011

i feel like this question has been answered 100 times...but it is extremely tough to get into PE post mba if you do not have PE experience prior to bschool. i'd assume the same for bb arms.

Jun 14, 2011

Undergrad here, just my 2 cents (correct me is i'm wrong)

I banking experience is the key to PE, no i banking experience means no PE with or without an MBA. In tough times like this they don't take a whole bunch of career changers. So i feel that your better of trying for a BB, but even that is tough to do with an MBA and no ibanking experience. Look at it this way, If i was GS why would I hire the MBA with no banking experience as an associate versus a 3rd year analyst or MBa with banking experience.

Goldman is tough to get in as an analyst, so I could only but imagine how tough the PE arm is (Goldman Sachs Capital Partners), which is a huge player in PE

Jun 14, 2011

Based on your situation and level of exp, your chance is close to none. Sorry.

Jun 14, 2011

Let's face it. You aren't going to get this job on skill. Guys who have been in IBD building 3 models a night are going to run circles around you.

I think you have the right idea to go in for the experience at this point. Networking in is possible. Just have to find the right opportunity. Just be honest with everyone. Tell them what you want. I would pass on the gift this go around and be more focused on communicating your thanks and being humble.

Jun 14, 2011

So what do you want to do at his firm? Be an admin?

Srsly though, give more details - does he have any analysts working for him? What deal size does he specialize in? What experience can you offer in sourcing deals, if the size of his deals would warrant such a need for a person to do that (prob signified by investments under 10M)? Have you interned in a PE shop before? Any experience modeling?

"...all truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."

  • Schopenhauer
Jun 14, 2011

They do not currently have analysts. As a matter of fact, they have 2 partners, a VP, and 2-3 interns in grad school. Typically I would shy away from this, but I do have a close relationship with the individual. The typical deals they're involved in is micro-cap, usually 1-5M, which I feel would be a great place to learn the basics.

I have no experience modeling aside from what I've been trying to learn from some friends in IB and have not interned at a PE shop.

Jun 14, 2011

Any tips?

Jun 14, 2011

Impression I get is that they do not need full time junior people. That is precisely why they do not have any full time worker below VP level in the fund now. Most micro-cap funds are very cautious on their expense. If they can use the intern resources from grad school for free or marginal cost throughout the year, then why should they hire someone that they need to pay?

Jun 14, 2011

i am in a similar situation as you. I just graduated with a degree in Maths in 2011 and luckily got a chance to work in a PE shop ( they are studying my resume now) by some sort of relationship. I'm really aiming at a low salary/apprenticeship position to learn from the ground up.

All i know is LBO from now, and i just start looking at it. Are there any other basic concepts i need to know to get myself prepared ?

Jun 14, 2011

If you want to join the buyout team of an LBO firm, not only is it worth switching groups, you need to switch. No modeling experience = no exit ops into a megafund or MM PE firm.
Assuming that by "top tier BB" you mean GS/MS/JPM, you are not going to be able to transfer into M&A from DCM. GS doesn't have M&A, and considering JPM & MS M&A are top of the street, you'd be hard pressed to transfer into those groups for a thrid year stint from DCM. Realistically, if there are lateral spots available in any M&A team at any BB, you will be at a disadvantage to get that spot since you have no modeling experience, and other applicants probably will.
Your best bet is to try to lateral into an industry coverage group at your firm for your second year. Or maybe if you have friends at other firms, have them shoot your resume to HR. Try LevFin (product group) instead of M&A. At least you can spin DCM experience to being related to LevFin.
Good luck to you.

Jun 14, 2011

Any pe is going to be very tough coming out of dcm. "megas and top MMs" will be impossible.

second the above about moving into a lev fin group - pe shops like lev fin and it will probably be easier to lateral there than to an m&a group since dcm is at least slightly relevant there. Avoid GS/ms/Citi though, no modelling there either. Try to get a spot in lev fin at one of the lower tier bb's (UBS, DB) if they are hiring right now.

Jun 14, 2011

So switch in my 2nd year is preferable over moving within my firm in a 3rd year in M&A(lateral move within the firm shouldnt be a problem)?

Btw i know people from DCM/Structured Finance backgroup (with no operating model experience) getting in a mega post their 3rd year (when they recruited in their 2nd cycle - knowing that they will do a 3rd year in M&A).

I can / and am prepared from an interviewing perspective for the LBO funds - i just wont have the day-to-day modeling experience going into these interviews vs. when i join (i.e. summer 2013)

Jun 14, 2011
aj88:

So switch in my 2nd year is preferable over moving within my firm in a 3rd year in M&A(lateral move within the firm shouldnt be a problem)?

Please re-read my post. A switch is not preferable, its necessary. You won't be able to switch into M&A from DCM for a third year role. Try lev fin and switch ASAP.

aj88:

Btw i know people from DCM/Structured Finance backgroup (with no operating model experience) getting in a mega post their 3rd year (when they recruited in their 2nd cycle - knowing that they will do a 3rd year in M&A).

All the Mega-funds have employee profiles online which show school and prior bank/group experiene. Would you mind sharing a link of people who went from DCM w/no modeling experience to a buyout team at a Megafund? I really would like to see their bios. Thanks.

aj88:

I can / and am prepared from an interviewing perspective for the LBO funds - i just wont have the day-to-day modeling experience going into these interviews vs. when i join (i.e. summer 2013)

Previous deal/modeling experience is the most important aspect of the interview. If you have none, you will not get the interview.

Jun 14, 2011

FYI... you'll be interviewing next year (i.e. Year 2 of ur analyst stint) for jobs starting the following year, so M&A experience in your third year isn't of much use.

Jun 14, 2011

lol mega funds from dcm.

Jun 14, 2011

Would see if you can switch into Leveraged Finance or HYCM. Both would give you better exposure to what the buy side looks for. Don't sweat it - if you want to work in PE you will find a way. It's not the Illuminati - plenty of opportunities to find a good shop if you're persistent and make connections with people.

Jun 14, 2011

Mezz or distressed debt funds could be equally attractive opportunities from DCM if these interest you.

Jun 14, 2011

even then - show me a single profile of a dcm person at any decent distressed debt or mezz fund. its basically all lev fin or restructuring, with some banking coverage and credit research mixed in

Array

Best Response
Jun 14, 2011

Are you in GOLD? Try to do the full program before you lateral. If not in GOLD or FLDP .... get out. Your chance at PE without ibd or consulting is small. How small you may ask? This period small.

    • 2
Jun 14, 2011
karypto:

Are you in GOLD? Try to do the full program before you lateral. If not in GOLD orFLDP.... get out. Your chance at PE without ibd or consulting is small. How small you may ask? This period small.

I'm not in GOLD. That's one reason I'm looking to jump ship ASAP. Should I apply to different LDP rotations or get this Deloitte consulting position if I can? I was stupid and didn't apply to LDPs right out of college. What will also look the best on the resume for the m7 MBA programs?

I mean I'm 23, I couldn't have already permanently fk'd myself over for the rest of my life...right?

Any tips/suggestion on what I should do next would be greatly appreciated!

Jun 14, 2011

Thanks!

Anyone else have any thoughts?

Jun 14, 2011

Why would you be tired of working 8h per day?

Jun 14, 2011
schuoh:
Ion26:

Im tired of working 8-10 hrs a day type thing. I want something where I can be in the office 15-16 hrs a day.

I'm amazed I just that, but good luck if that's what you really want.

JJSaurel:

Why would you be tired of working 8h per day?

I'm not making enough money to enjoy myself the way I want to enjoy myself. I wait tables part-time/nights to make more money/stay occupied.

Jun 14, 2011

ok so you're not tired of the 8h day, but of the pay which is totally different. The grass is always greaner i guess

Jun 14, 2011

yes, that is totally different...you might be in for a rude awakening going from ~9 hours to ~15 hours. make sure you are switching for the right reasons. there is more to life than a few extra $

Jun 14, 2011
JJSaurel:

ok so you're not tired of the 8h day, but of the pay which is totally different. The grass is always greaner i guess

username777:

yes, that is totally different...you might be in for a rude awakening going from ~9 hours to ~15 hours. make sure you are switching for the right reasons. there is more to life than a few extra $

Well the main thing is that I'm bored, and I want to get into something more interesting to me like PE. I'm up all the time, and don't sleep much anyways.

My main thing is what should I be doing to fast track myself to PE? It's going to have to be an M7 MBA. I'm 9 months out of undergrad. Where should I be trying to work that will look impressive on my resume?

Jun 14, 2011

You are far away from PE. Best course of action is try to lateral to Deloitte/E&Y/PwC/ACN type place in their operations groups (not MBB, cause they won't take you, and don't make a fuss when you are slotted in as an entry level analyst). From there try to do MBA (cause PE firms don't hire PwC analysts). Since PE straight out of MBA without prior experience is really difficult, try to do MBB or IB and see if you can end up in some smaller PE shop from there. In summary, going to PE asap might not be possible, now or ever. But you can move towards a job with longer hours/better pay if that's what you want.

Jun 14, 2011

Thanks for going into detail there! That's what I'm planning to do Deloitte/PwC/EY/etc. Is MBB after 1-2 yrs at those big 4 firms possible before MBA?

Jun 14, 2011

No.

Jun 14, 2011

Even if I could get into a LDP or some rotational at big company?

Jun 14, 2011

"I wouldn't mind getting into consulting at bigger places such as BCG, McKinsey, and Bain."

Wouldn't mind? Nice. I've got MBB in the bag if those PE guys miss this opportunity to hire greatness.

Jun 14, 2011

I meant that in the long run. It would be easier to be hired at MBB than PE. I didn't put a timeframe on it. Of course neither is easy.

Jun 14, 2011

Still no.

Jun 14, 2011

Okay. I'll keep working at it...

Jun 14, 2011

I suggest you do a lot of further reading on this site. Nothing is impossible, but some routes more likely than others.

Jun 14, 2011

It is improbable that you will get into PE without work experience.

Jun 14, 2011

For MM i'd say MBB could be a good feeder. At least i know at least two guys who followed that road. That is MBB. then MM PE, then MBA, then MM PE. For megafunds I'll let who's more knowleadgeble than me answer.

Jun 14, 2011

Masters programs are utterly useless for PE, IMO.

You're better off with the MBB experience.

Jun 14, 2011

if you have a position at MBB that's almost definitely your best shot at transitioning to PE over the long run... do that for a 2-3 years and perhaps transition to banking of get a top MBA.... then you'll be a candidate for PE.

Jun 14, 2011

Thanks all for your comments.

I'm surprised by the consensus that MBB would be the better choice. I thought it was a close call since the master of finance is a very practical degree and from a top uni.

Jun 14, 2011
abcdef123456:

Thanks all for your comments.

I'm surprised by the consensus that MBB would be the better choice. I thought it was a close call since the master of finance is a very practical degree and from a top uni.

The problem is you still won't have extensive practical experience with the Masters degree and there will likely be dozens of experienced IB analysts looking to take that position. Not to mention that as you move up in the PE food chain the most important aspect will be your network, of which you will have very little...so you are "less" competitive at each level. MBB will be your best bet, but as others said, it's still very much an uphill battle. Good luck.

Regards

Jun 14, 2011

master of finance will do absolutely nothing for you unless you have experience. even the mbb route will be an uphill battle for you, considering you'll be competing against bb and mm ibanking analysts.

Jun 14, 2011

Why PE?

Jun 14, 2011

Based on your comments, I think it would be more reasonable to target Private Equity in 2 years instead of 1 years. In this case, which of the following is better:
A) 1 year master in finance + 1 year MBB
B) 2 years MBB

Jun 14, 2011
abcdef123456:

Based on your comments, I think it would be more reasonable to target Private Equity in 2 years instead of 1 years. In this case, which of the following is better:
A) 1 year master in finance + 1 year MBB
B) 2 years MBB

B. You maximize your chance of getting a larger quantity of good, solid experience. You also minimize any additional debt you would have to take on plus you would be bringing money in instead of just paying it out. Additionally, you can sometimes put yourself in an awkward place recruiting wise when you have extra credentials that aren't typically the norm. Someone might look at you and think "great! He has a Masters so he must know his stuff" others won't even look because they recruit by fairly strict guidelines and the people they look for don't need Masters degrees. I'm not saying this is necessarily the case for you and your situation, but it's also something to think about.

Regards

Jun 14, 2011

Stacking master's degrees isn't going to be a replacement for work experience, IMO. We have a guy with multiple MA/MS degrees from big name schools and he works for guys who went to semi-targets the same age as him with more work experience.

Jun 14, 2011
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