Blah experience at MF, heading to B-school. Recruiting tips?

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Finishing up a WFH stint at a BX/KKR/TPG-level MF that doesn't give out explicit return offers (you have to "ask to come back"). Had a blah experience, bunch of frisky deals but didn't close a deal and my references are going to be pretty solid but not gushing (I was a solid resource, not the kind of place where associates wow people beyond just being a workhorse). Not diverse. Place had shitty culture (consensus here is correct that it was pretty sweaty).

Headed to H/S this fall but getting really spooked by the accounts here of the normal course for ex-PE people not being able to maintain fund "level". I'm not a prestige whore but I can do carry math, and I do believe MFs can play in certain deal sizes that MMs can't / are just generally a safer harbor when shit goes sideways. I assume that doing an MBA internship is going to be both a no-no for feasibility (not diverse) and signaling (seems "desperate", why wouldn't I wait to recruit FT, etc.) reasons. So, asking the community--am I totally SOL on going back to an MF level shop (and thus I should focus on MM), or are there steps you vets would recommend that would give me a fighting chance?

Comments (34)

 
  • Analyst 1 in IB - Ind
Jul 24, 2020 - 12:38am

Did you think about hedge funds? I’m sure a ton of them would be open to you and you can do PE in Public market type of investing

Array

 
  • Associate 2 in PE - Other
Jul 24, 2020 - 10:46am

I mean if you can do carry math, I'd recommend looking at startup PE shops with legit founders.

Unless you are going to one of the privately held MFs your ceiling for carry (in total dollars) is likely higher at a smaller shop. Especially since you can still 3x funds in the MM and that's much harder at bigger shops.

 
Jul 24, 2020 - 11:02am

I think the number of post-MBA PE guys at MFs on here is extremely low (if any), but can't imagine why you'd have trouble moving back into a MF role. Would think you would have as good a chance as anyone, while recognizing it is hyper-competitive, but getting there as an associate was as well, so that's nothing new for you. Not sure how much not having closed a deal will hurt (if at all). The funds you listed are meant to be the less sweaty MF though (with WP and Apollo being worse), so not sure why you’re gunning to get back to what will be a pretty similar experience post MBA. I get the money thing, but even a MM / UMM fund will pay you fantastically well.

I haven't heard negatives before about doing an MBA internship, is that the case (if you or others have any detail on that would be helpful)? You're right that the MFs won't bring you on for the summer since the programs are almost all diversity, but some of the good UMM funds will, Berkshire comes to mind, which have comp more or less at MF level.

 
Most Helpful
Jul 24, 2020 - 11:50am

I mean do you only want a fund with latest raise 10-15+? In which case yea who knows what happens.

Are you ok with 3-4bn+? I.e. would Berkshire, aea, other top tier funds not suffice? If not I would say you’re probably sol. But you should really think about why they wouldn’t suffice. Bc they pay a lot of money, have long histories and great returns. The choice isn’t a 750mm fund vs Blackstone. The space is broad

 
Jul 24, 2020 - 12:46pm

Emergingmarket:

I mean do you only want a fund with latest raise 10-15+? In which case yea who knows what happens.

Are you ok with 3-4bn+? I.e. would Berkshire, aea, other top tier funds not suffice? If not I would say you’re probably sol. But you should really think about why they wouldn’t suffice. Bc they pay a lot of money, have long histories and great returns. The choice isn’t a 750mm fund vs Blackstone. The space is broad

At a top MBA now - this seems right to me. Plus some (rare) move up-market so you staying at same or similar level is not quite as big of a push as you think it is

Array
 
Jul 24, 2020 - 4:35pm

This is funny and I gave it a banana, but in context OP's post isn't ridiculous. Conventional post-MBA recruiting wisdom on here is that maintaining level, especially at the top, is all about killer references and great deal experience, and if OP doesn't have those and potentially doesn't have a return, I understand the question. I hope he/she doesn't think life is over if he/she can't return to MF, but I think the tone in the post is more of a preference for MF than an end-all-be-all.

 
Jul 24, 2020 - 4:44pm

It's not as hard as you think to move "up-market". Blackstone, for one, I know for a fact actually tends to hire senior associates (post-MBA title) more from MM / UMM than other MFs. Bain also runs a summer program although they tend to fill it with former associates at other MFs.

Also you'd be surprised how much comp is at solid UMM firms... and in the case of at least one MF - some MFs pay way below street at the post-MBA level. Not to mention potentially better culture / upwards mobility...

Thing to keep in mind is funds that run summer programs will hire out of that summer program more often than not. So rule of thumb is - if there's a fund with the right size, location, strategy and culture that makes you really excited that is offering a summer program - apply and go for it. What you shouldn't do is take an at-bat with a firm that you don't feel strongly about because then if you don't get the return offer (very possible with PE internships), then you're in potentially a worse-off position.

 
  • Prospect in IB-M&A
Jul 25, 2020 - 3:16am

Even though the culture at your MF wasn't good it's not like any MF has "great" culture. From your experience it sounds like you'd be in a much better position if you focused on a MM or UMM fund where you'd fit in and where they'll be more likely to keep you on long term on the partner track.

 
Jul 25, 2020 - 6:14pm

Hello monkies. I graduated HSW last year and now am VP at top 3 MF.

Maybe I’m naive but most people don’t do PE for the culture... To get a step up in culture, you’ll have to take a huge step down in pay and performance typically. Even UMMs are very sweaty, including the names mentioned here (looking at you AEA).

Unless you’re joining a first time fund, the economics will be meaningfully better at MF vs. UMM (with exception to BX) post MBA. It’s 600/700 vs. 400/500 from what I’ve seen.

But to your points, who cares about a small difference in cash comp anyways. Don’t think of it as $00k delta in your first year. You would join a MF over UMM because of the lifetime earnings potential. You’ll make shtton more over long term at MF vs. MM, unless you plan to get in early and take disproportionate share of carry, in which case you might as well join a startup...

 
Jul 25, 2020 - 7:42pm

Congratulations on the H/S start and wrapping up 2 years! At a MF post-MBA now so some color on a few points:

1) I'd say if you weren't sponsored and aren't diverse, the odds are ~50% or less that you go to a similar-level fund--don't underestimate the talent you're competing with from UMM associates who have great deal experience. Your best shot is probably to ask to come back if that is your priority.

I'd also say there is a trap that a few MF people get into where they are extremely picky about where they get offers and end up much lower on the totem pole. Something to take into consideration.

2) Shouldn't feel bad about gunning for select summer PE positions if you are worried. Not all of the programs are diversity-only; if anything the MF programs are more diversity-oriented and below that, firms are trying to test out candidates and get a jump on recruiting. There is definitely a bit of "swallowing your pride" but can work. And second year is much better once recruiting is out of the way.

3) Everyone here is correct on the carry math potentially being worse at a MF than at a solid up-and-coming shop. In 20 years the richest people from your business school class will not be those who stuck with MFs but those who joined near the ground floor at good funds who afterwards expoded. There is just much less variance at the MF level on both the upside and downside. You can't benefit as much from fund growth. fund success or accelerated promotion in a large shop. Moreover your individual contribution will never be needle-moving. If you're a "bet on yourself" type of guy a MF may not be for you.

 
  • Analyst 3+ in IB - Ind
Jul 25, 2020 - 11:32pm

what do you think differentiated candidates at the VP level? even if you have the typical BB--- UMM/MF background and are not diverse? is it investing intuition? reference from banking/PE gig, personal qualities? currently going to UMM fund with great rep and a bit worries about the brutality of the post MBA vp recruiting and considering staying in IB as it seems like a more risk averse option

Array
 
Jul 26, 2020 - 11:48am

To get to the interview you need a good enough brand name (MF / UMM / maybe MM) and good deal experience (more important the lower in the totem pole your fund is)

To get the job then it is references from PE, investing intuition / finance knowledge, some personal qualities. PE is a small industry so references matter more than you'd expect (especially from people you didn't volunteer as your references). There will be case studies and technicals so being able to grasp an investment opportunity quickly and completely is very important and a skill to be practiced.

To be honest though you should not be losing the job interview based on personal qualities ever.

 
  • VP in PE - LBOs
Jul 30, 2020 - 5:37pm

IMO, industry experience is most useful for those looking to expand/burnish credentials in a specific industry. If you want to be a more credible healthcare investor, for example, actually working for a sponsor-backed business is probably a better return on your internship than a summer gig without return offer potential. If your goal is to be a generalist, I'm not sure I see the same value (unless you're gunning for the psychic benefits of having a low-key summer).

Fortunately, you will likely be able to manage this opportunity cost. If your goal is to summer at MBB and then re-recruit for PE (I had a friend who did this and traded up in fund size, but that is another story), you will have to commit pretty early on. Recruiting for big tech and unicorns is also fairly rigid, but occurs later. It may be possible to dual-track a summer PE role (being selective based on those firms that do make return offers) and tech, and it is certainly possible to use sponsor-backed operating roles as a fallback if the cards don't fall your way for PE recruiting.

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