Consulting to PE with market/commercial due diligence experience

I'm currently an associate with a boutique strategy consulting firm that specializes in market due diligence, serving primarily mid-market PE shops. I have been with the firm for about 1.5 years after graduating with a Bachelors degree in finance from a non-target (Miami of Ohio).

I took the job mainly for mentorship and a shot at breaking into PE from a non-target school. Since I have deal experience, and really good excel/powerpoint skills, along with mastery of company and industry research, do I have a chance? 95% of the projects I've been on are buy-side diligence.

I'm worried about my lack of modeling skills being an issue moving forward. I have produced market models, but I'm not typically doing LBOs, DCFs, etc.

My boss is extremely well-networked in the mid-market (former banker). Do you think I will need to work as a banker before PE for the modeling skills? Would it make sense to do an analyst program now? I'm positive I can get interviews.

Or should I work another 1-2 years as an m&a consultant and then try and break into PE pre MBA.

I'm open to any advice or suggestions.

Comments (8)

Nov 13, 2018 - 10:23pm

Shooters gonna (and gotta) shoot man - can't hurt to try and get in directly but I would caution that it's likely a long shot. The tried and true path of doing using IB as a stepping stone has worked for many others, and there should be a fair number of Miami alums on the street that you can try to network with.

The benefits of banking over your current role are also not just limited to modeling - it's also general understanding of deal processes as well as more intimate understanding of companies themselves. Depending on the projects you're working on, you may or may not get this exposure in consulting.

Most Helpful
Nov 14, 2018 - 10:28am

Thanks for the quick reply. Projects I'm working on are custom in nature, depending on the clients investment thesis. However, it is usually some combination of the following:

1) Assessing market dynamics (market size, growth rates, etc.)
2) Understanding purchase, channel dynamics
3) Evaluating the strength of the targets value proposition
4) Assessing the competitive landscape, points of differentiation

I think that marrying these skills with those I'd get in banking would be extremely valuable for a potential career in PE. Our MD has agreed to do some 1 on 1 valuation/modeling training sessions with me over the next couple of months. Any self-study books you'd recommend?

And since I wouldn't be going through university recruiting (I'd be going through my professional network, ACG, etc.) when would it make sense to start reaching out to these banking folks (or having our MD reach out on my behalf)? Like I mentioned previously, he knows a lot of senior bankers in the area.

Thanks again. This has been super helpful.

Nov 14, 2018 - 10:51pm

You can basically reach out whenever to your contacts for IB. Banks constantly recruit for openings since turnover is high (though particularly high after bonuses for obvious reasons). I'm not sure I would have my MD reach out - does he know that you're looking to leave? Depends on your specific relationship with him but use your discretion here.

BTW you can also reach out to PE guys too, which might be more helpful given you are a bit of a nonstandard candidate. I found that PE guys were happy to talk but had less influence over hiring decisions relative to bankers of similar seniority.

Self study: macabacus was always helpful. training the street is pretty good too, but when i did that it was always an interactive class through my bank/school and it definitely wasn't cheap. Someone else may be able to help with other book ideas since I'm not sure - most of my learning was just on the job.

I agree with your thought that marrying your current work with more financial analysis would be very helpful - it seems you're well aware of what exposure you are missing.

Nov 14, 2018 - 4:10pm

Currently a 2nd year BA/A/AC working at MBB and successfully landed a job at an UMM/MF fund without any financial modeling experience. Of course, it's easier to get interviews from MBB, but I know many people from Parthenon and other boutiques that have gotten PE jobs in the past.

If your current job involves a lot of buy-side DDs and your MD is well-networked, I think you'd be able to break into a LMM/MM PE firm without going into banking first. My advice would be to look through all team pages on the websites of LMM/MM funds and compile a list of firms that hire non-traditional candidates. In terms of prep, you should be able to find modeling resources online in case you get a modeling test. However, I assume you wouldn't get more than a paper LBO which doesn't take too long to master.

Best of luck!

Nov 17, 2018 - 4:16pm

Reading your post, I think you need to ease up on the superlatives. I came from MBB, and hire consultants frequently for DDs. The deal process / diligence is way more complicated than the small slice they're exposed to, and frankly, I'm not convinced they add much value on a good portion of the market work they do.

So "mastery of company and industry research", "really good excel/powerpoint skills" etc...just be humble, you're green, it's OK.

Life, liberty and the pursuit of Starwood Points
Nov 17, 2018 - 5:09pm

Agreed. I want to add on though, if I may. He should not sell himself short.

Coming from consulting, you have a much better perspective on how industries come and go, and how companies win or lose within their industries. What consultants don't know, clearly, is valuation, and whether a company is actually an attractive investment.

While the latter is certainly more important for PE, the former is a unique skill complement that you can really sell if you're able to effectively communicate the pattern recognition that you've been able to develop.

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