Consulting, MBA, PE FoF. Breaking into PE direct?
Hi everyone, here my long story in short: 5 yrs strategy consulting tier 1/2, MBA top 5 worldwide, M&A for an institutional bank, now entering as VP into an LP/ PE FoF, where I will focus 50% on direct coinvestments.
Got exp in strategy and operational consulting over large companies, portfolio company management and transformation, DDs in the context of transactions, and I have followed the whole life cycle of direct minority and majority transactions (including a lot of modeling), even though not as much as someone that has spent 6 years in a BB or in a direct PE.
My strategy is to leverage on strategy consulting background + direct M&A and transaction experience, adding now a lot of GPs exposure through the FoF experience (plus additional transaction exp as a direct coinvestor).
Would it be hard in your opinion to target a direct PE position as a senior VP/ senior investment manager in 2-3 years, after having consolidated my network portfolio in the PE space?
My concerns are:
1- lack of BB exp
2- lack of brand in the LP/ FoF (headhunters will not target me proactively)
Thank you in advance for your help!
Hey ModelingFrenzy, the following topics might be helpful:
Who will rescue this thread? liewwanpang andrew5019 packmate
Fingers crossed that one of those helps you.
Up
up...anyone?
earthwalker7 may be able to help
OP, why did you go into a PE FoF out of M&A?
Cause corporate-institutional banking M&A can be slow in terms of career and deal origination/ execution, and the rationale is more industrial and strategy oriented. I wanted to be more hands-on in a fund where investing at a higher pace, and be accountable for the actual performance of it - thus in the buyside I prefer the PE world, and in the FoF I was attracted by the large number of direct co-invest (and carry). Hoping to move to pure direct at some point
Pinging APAE
I think you're in the perfect position to get into PE directs:
1) you're meeting PE funds all day long, and they all want to cup your balls 2) you're looking at deals together with them, all day long, which is helping you build a track record.
The best way to get into a fund, be it PE, VC or direct or FoF, is to bring gifts - that is, show them deals you can look at / do together, until they learn to love you. One day, an opening will develop, and they'll say "hey call ModelingFrenzy and see if he/she wants to come join us..."
Thank you very much earthwalker7 , I had the same idea regarding that, which is encouraging - just concerned by the lack of brand/ traditional IB exp
Has someone of you guys seen some similar path or transition?
I have seen someone who was FoF their whole career, including direct investments, make it into a pure directs role. So, yes.
hey earthwalker7 could you elaborate what you mean by FoF, including direct investments? Could you provide some examples of such shops. Believe you are in Asia so am interested to hear about this area. thank you.
I think the biggest issue you will face is not your background, but the fact that 1) there are very few openings at the level you are targeting and 2) you'll be competing against a lot of PE professionals that have recently been pushed out (it's really hard to get past VP / Principal level as there are very few seats) and have been in PE from associate on (ie. have a lot more experience). As other have said, your best bet would be to network like hell and create relationships.
I understand the point, thanks for highlighting. Having exposure to a large number of GPs can actually help in that, maybe getting to know some potential vacancies in advance. But yes, direct PE market is indeed narrow in terms of openings and competition doesn't help - pripably a particular angle (language, country, sectoral specialization - due to my previous operating exp) could help.
Other potential exits, 2-3 yrs down the road? FoFs, co-invest, secondaries (?), LPs institutional and FO, HF (?), alternatove asset management - smtg else?
Or back to consulting / corporate world, which always represent safe spots. I guess IB is pretty impossibile at this stage (vp level hire).
Any other idea or recommendation would be more than welcome :)
Yeah, that's one of the real crappy things about this PE industry - not enough seats to go around. So if you want to make moves, it's really hard to do. In many ways, a FoF position that's doing co-investments can really help in this respect, because you're getting connected and looking at deals together.
Looking at your experience, it should not be a big deal the lack of BB. A PE VP doesn't spend that much time modelling actually... Why not target some of the more "hands-on" PEs (HIG, Sun Capital and the likes) - on those, there are more consultants than bankers...
That's a good angle indeed - do you have other names (maybe also niche, MM, not bb) of some other fund that could be included in this group? Such as more transformational and operational approach to PE. If smaller even better - cause less on the usual radars
Most midcap PE tends to have an operating/turnaround angle. Depending on your region the names change. With international focus besides HIG and SunCap I think Platinum is also hands on. CoBe is tiny but also comes to mind...
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