Hello All:
Long-time reader of WSO but first time poster here. I've read much as possible on related topics but would much appreciate any direct guidance on this particular situation.
I'm currently at one of the lower M7 MBA and was in PE Co-Investments and Big 4 M&A pre-bschool. Have received two offers: one from a BB IB (BAML/CS) in Sponsors or M&A and the other is from MBB (in PE group/DD).
If my goal is to do control buy-out PE (MM or otherwise) and perhaps ultimately to start my own fund. What would you recommend to take? Does the advice change if the situation is in NYC vs London? Unfortunately the PE recruiting directly have not gone as well and now have to decide between these two offers.
Many thanks in advance!
The general rule is that IB sets you up better for a PE role.
In simplifying terms, you have consultant friendly PEs and banking friendly PE. For the banking friendly PEs (eg. KKR, and not Capstone), it's very hard to get a job coming from consulting. For the consulting friendly PEs (eg. Bain Capital), you are close to equal footing if you come from banking or consulting (not sure if some have a preference for either). So banking sets you up for recruitment for both. I'll let other comment on the strength of the Sponsors or M&A groups at CS/BAML.
The other bit is, NYC vs London matters. In the US, recruitment for PE is more standardized, so there are not many entry points as a post-MBA mid-level banker/consultant. In the UK (and Continental Europe), it is more flexible. So, based on what I've seen, my view is that, post-MBA, you have more chances getting a PE job in London from MBB than getting one in NY from a BB. If both offers were in NY, I would've recommended banking.
Thanks for your insights very helpful! Would you say the chances are decent or extremely rare for either MBB/IB Post-MBA to PE? Would my pre-bschool PE Co-investment Associate experience be a differentiator?
Also given you suggest BB is overall a higher chance, why do you believe MBB is better for London? Wouldn't there be also more firms open to BB with the same logic? Sorry for the multiple follow up questions! It seems you're quite knowledgeable on this and would love to hear some more thoughts.
I think you’ve misread my answer. I said generally banking is better, so that would apply to London as well. But MBB London (PE/CDD team) would be better for PE in London than banking in NY for PE in NY. This is because of how recruitment to PE is structured in US vs UK.
I would say chances are from decent-ish for BB to PE in London, to rare BB to MM PE in US to extremely rare for BB/MBB to PE MF in NY.
PE Co-invest will help in recruitment, depending also on brand and how reliant your firm was on the lead GP (eg. some co-invest do their own modelling, while others can be quite passive throughout the whole process) Presumably you could use your network with GPs from your co-invest days. Still, most important is to understand the different entry points in PEs in NY/London, time recruitment when funds are raised etc.
Thank you for the insights. Sorry that's my bad I see what you mean now and make sense. My last follow up question on this would be - do you think Mck/Bain brand value is materially better than CS/BAML (since i see Mck/Bain more on par with GS/MS) that it can "offset" the aforementioned banking preference somewhat? If it was GS/MS i think i would choose that without much hesitation. Much appreciated!
As an overall brand (ie. prestige), I would classify MBB as GS/MS/JPM. So on that I agree with you. But you said you were interested in PE, for which working at a BB gives you a better chance. With IB, if you are in the same rank (ie. BB/EB), the exit opportunities are quite similar. More than being at GS/MS, it matters to be in the right group at a BB so you end up on the best deals in the sector/geography. I don't know which are the best groups at CS/BAML in NY and London. Other users from teams there may be able to help out.
If you want to diversify your exit opportunities, then MBB would be better. If you want PE, generally a BB is better.
How did you have time to recruit for banking and consulting at the same time? Just curious
Good question - the course-load can be managed at bschool level, much more than undergrad from a GPA perspective particularly. Also only banking requires a lot of networking whereas consulting is primarily interview performance, many applicants will get a first round from MBB (from MBA business schools">M7 MBA). I was very fortunate and lucky to performed at the MBB interviews, while playing the banking networking game. Hope that helps answer your question.
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