Breaking into MegaFund from non target BB group

I was just wondering if anyone had ant advice/ experience on the feasibility of breaking into a PE Megafund (Blackstone/KKR/TPG) from a non target IBD group. For some background, I'm a diverse senior at a target school entering a renewable energy coverage group at a mid-tier BB. Half of the deals you work on are funded by the bank itself and the other half are funded by PE firms. The group is fairly small so the modeling experience is stellar. To be even placed in the group, I had to construct an LBO given certain conditions. Anyway, I'm just wondering how feasible it'd be for me to place into a solid megafund and any advice for going about PE recruiting next year.

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Comments (5)

Oct 29, 2017 - 3:52pm

Hi jr982, check out these links:

Or maybe the following pros can chime in... idragmazda CompBanker Mephistopheles

If those topics were completely useless, don't blame me, blame my programmers...

Best Response
Nov 2, 2017 - 6:28pm

This is entirely doable. Sometimes the guys with the most unique experience have the easier time in recruiting because of how their experience stands out.

Your deal work, for instance, may be stronger than your peers because you have the advantage of the bank funding half of everything with balance sheet capital. Maybe you'll have two or four done by the time recruiting comes around.

Your references then may be stronger, because the seniors in your group will know your work product better than the guys who've been staffed on a whole bunch of pitch work or deals that died and thus never really got put through the grinder on a live transaction. They may also be incentivized to help an analyst place well into a fund that may turn into a client of the group.

This is all before we get to the fact that your specialized coverage puts you in a great position for some of the specialized funds that have launched in the past few years.

TPG, for instance, should be at the top of your list. There's TPG PACE (their permanent capital group) which includes PACE Energy. There's the Rise Fund (which if you aren't a bang-on candidate for, I don't know who would be). There's the legacy buyout group which has an energy vertical.

Blackstone has a dedicated energy buyout strategy. Fund II was oversubscribed at $4.5b in 2015. Its predecessor was a $2.4b vehicle. There's also the newly-formed infrastructure vehicle with that $20b commitment from Saudi Arabia.

GIP closed a $15.8b vehicle in January. You should also include them.

I'm running tight on time so I won't write out everything about KKR's energy practice that's easily Google-able.

Prepare just like any smart analyst should. Do all your modeling work early in your first year. From your post it sounds like you're still in school. This is even better. Be able to do the PE modeling exercises cold now. Check out MultipleExpansion.com, it's new but one of the single best resources out there.

I'd also recommend doing your GMAT now; if you take it in your senior spring, your scores will still be active (five-year window) for a b-school application if you did the standard 2+2 banking/PE track. Opinion is mixed on the value it adds, but adding a 750+ score on your resume during PE recruiting is at worst a no-value-add datapoint and at best may help alleviate some of the prestige question mark that a headhunter has thanks to your non-target background.

Good luck. In short, you're in a strong position. Story matters way more than you think in recruiting. Think about how to craft the narrative of how and why you got to the group you're in, then how that meshes against your future goals and how X-fund's Y-strategy perfectly matches that.

I am permanently behind on PMs, it's not personal.

  • 8
Nov 8, 2017 - 9:00pm

Appreciate this response. More or less in the same position as OP. How would one go about networking when it comes to PE? I understand the cold calling more or less from IB recruiting but are PE associates as responsive to this and is networking with them as "socially acceptable" as it is with IB?

Nov 8, 2017 - 2:04am

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