Consulting to Private Equity

ThrowAway1841's picture
Rank: Chimp | 13

Quick Bio: Graduated last year from a target school and had offers from Elite Boutique IBs and 2nd tier consulting firms. I ultimately went the consulting route and ended up at Accenture MC/Deloitte S&O/PwC MC. I was competitive for MBB (Top ECs/Grades) as well but honestly those firms didn't recruit at my school at the UG level.

Now a year into my job, I'm looking for advice on where to go from here. I've killed it in reviews and multiple senior managers/partners are pulling for me within the firm. However, I just want to explore my options.

Mid-Tier Consulting Firm Exit to Private Equity

Consultants at firms that aren't McKinsey, Bain, or BCG may struggle to break into the bulge bracket private equity firms. For those that hope to break into private equity from a "lower tier" consulting firm - there are three common strategies.

  1. Lateral into MBB level consulting firm and then recruit for PE
  2. Directly recruit for smaller operationally focused PE firms
  3. Moving into Private Equity post MBA

It is important to note that while these are realistic possibilities - they are not the only paths to private equity.

Consulting Friendly PE Firms

Here is a short list of middle market private equity funds that have historically hired consultants. If you are looking to exit into PE you should consider looking at these firms.

  • Charlesbank
  • HGGC
  • Golden Gate
  • Altamont Capital
  • Bain capital
  • Advent
  • FFL Partners
  • Audax
  • New Mountain Capital
  • Sycamore Partners
  • H.I.G Capital
  • Berkshire Partners
  • Sorenson Capital
  • Hellman & Friedman

Want to learn more about private equity? Check out the video below.

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Comments (76)

Sep 22, 2013

1) Yes, Parthenon, LEK for sure. Others I think are less common (relative to size of those firms)
4) Yes if you're at a top firm. Not sure how aggressive you need to be if you're not at MBB or a tier 2 that's known for PE placement.

My question is, why do you need a megafund or top MM now? I think if you just want some PE experience, use whatever industry expertise you have and network with lower MM funds that might specialize there.

Otherwise I think you're looking at 2 moves: Either lateraling to another consulting firm, then turning around after a year and trying to find an immediate start PE position, or going to a lower MM fund, going to B-school, then going to a larger fund after B-school. Your ability to do that will likely have a lot to do with the state of the PE market 3-5 years from now.

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Sep 22, 2013
petergibbons:

1) Yes, Parthenon, LEK for sure. Others I think are less common (relative to size of those firms)

4) Yes if you're at a top firm. Not sure how aggressive you need to be if you're not at MBB or a tier 2 that's known for PE placement.

My question is, why do you need a megafund or top MM now? I think if you just want some PE experience, use whatever industry expertise you have and network with lower MM funds that might specialize there.

Otherwise I think you're looking at 2 moves: Either lateraling to another consulting firm, then turning around after a year and trying to find an immediate start PE position, or going to a lower MM fund, going to B-school, then going to a larger fund after B-school. Your ability to do that will likely have a lot to do with the state of the PE market 3-5 years from now.

I think this is probably the best advice you could receive, but I wanted to throw out another potential route. If you previously had offers, I would casually follow up with some of the elite boutiques and see if they had an immediate need. With bonuses being paid out recently, this is the time of the year to lateral.

Going forward on that route, a one or two year IBD background with a solid reputation/review history in Consulting and IB would be a very marketable candidate for headhunters. In addition, your superiors at your current office would be more likely to go to bat for you and work their network to give you a warm intro.

Most likely, you would end up somewhere in the MM, with funds from $350MM - $1.5B. Funds in that range see your appeal and like your story. Also, funds in this space are going to value your consulting background. The thing that makes associates in these funds irreplaceable are the things they can do that VP's and other associates don't have experience in.

Best of luck.

Sep 23, 2013

Thanks for the responses guys. PE is just an exit opp I want to explore, I'm not dead set on it. If I was, I would have easily taken the Elite IB offer.

I might try the lateral route after getting promoted and I've heard stories of people breaking into MBB from tier 2 firms. I'm not quite sure how common that is though. I've also heard that MBB has a policy of only hiring post-mba consultants. Can anyone confirm/deny this? In banking, it's pretty easy to hop around different banks. To be frank, I do not know a lot of people at MBB. Since they don't recruit at my school at the UG level, there is no alumni base to reach out to.

The lower MM PE move is much more plausible because my school has a vast PE alumni base. My firm does not specialize analysts so I'll need to wait for a promotion before I can reach out to MM PE shops.

Lastly the idea of going back to banking has crossed my mind and I have friends at every top boutique/BB. However, it feels painful to trade away a practically guaranteed promotion to consultant just for PE. Also the senior leaders would probably not go to bat for me in this type of a situation. In their mind, they're already trying to groom me for the fast track at their firm. Which is quite the compliment but a bit of a double edged sword. Consulting is just something I don't want to do in the long run (+5 years). I mainly went the consulting route so I could really learn what I enjoyed instead of accidentally pigeonholing myself.

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Sep 22, 2013

Bad move not taking the elite boutique offer

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Sep 23, 2013

stay for a few more years, take the lateral route and then reconsider your options.
it's quite too early for you to decide. hope it helps.

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Sep 23, 2013

I believe Vista Equity Partners might be friendly to people with consulting backgrounds. I believe they have their own in-house consulting division that entirely focuses on improving their own portfolio companies. You might need an MBA in order for them to consider you though (although, of course you do not actually "need" an MBA.. but that is just the situation at a lot of US places, I believe).

Sep 23, 2013

I come from an MBB to MM PE background and I'm now at a fund that hires exclusively ex-consultants at the associate level. There are several of these funds (Golden Gate is probably the most prominent) and a range of others that give a consulting background real consideration.

That being said, I would second PeterGibbons above in that a lateral move to a different firm is probably the best first step. Deloitte S&O / Accenture / PwC don't tend to be considered second-tier for the purposes of recruiting, in part due to the sheer size of the programs. As a standout in that role, you should have a legitimate chance at lateraling to MBB or Parthenon / LEK (both of which place into PE well enough that you will have a chance to stand on your own merit). Look into whether any of your former managers have made the move (I know several Deloitte S&O folks who went to MBB after business school) - they should be a good resource at a minimum.

The lateral move in consulting may be more beneficial than a move into IB considering you are not dead set on PE. Business schools continue to value consulting candidates more highly than those with IB backgrounds and I think the skill set and network from a consulting firm allows for a broader set of options (which appears to be important in your considerations).

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Sep 26, 2013

To those of you who have made this transition -- How are you enjoying the switch into PE from consulting? Do you find yourself presented with tasks that are different to your i-banking counterparts given your background (i.e. playing to your consulting strengths) or is the work pretty standard for everyone at your level?

I'm contemplating a similar switch as the author of this thread from non-MBB consulting to investment-side PE. The option you mention of first moving laterally to an MBB is most likely the path I'll be taking pending some interviews -- and once there I'd try to get as much due diligence and PE advisory experience as possible.

Another option I'm contemplating is moving to the operational team for a PE group first rather than MBB (same intention of eventually moving to the investment side). Do you have any insight on their roles within PE firms and the skills they develop compared to MBB consultants? Also, is there a pretty clear separation between the operations teams and investment teams or would you say there is quite a bit of collaboration (or even simply working on the same floor) and hence the potential to learn some investment-side skills is still present? My goal is to compliment an operations and strategy background with some finance and investment experience before eventually going to b-school.

Thanks for any advice!

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Oct 5, 2013

ACN and the likes just don't have that brand power to help you break in to PE or MBB. Sure i'm sure it's been done before, but it's going to be extremely hard unless you just happen to have a connection.

Oct 7, 2013

What if you were in investment consulting (commercial due diligence and MBB-like strategy consulting - only LEK, Bain, McK, EY, PWC, and KPMG have these) instead of operations oriented consulting? Would chances in moving to a PE firm be different or the same?

Best Response
Oct 7, 2013

there are a number of PE firms that take consultants. but no way in hell do accenture / deloitte consulting people make it to PE. it'll be the MBB/LEK/Parthenon people that make it.

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May 28, 2016

Interesting! Anyone wanna revive this?

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May 28, 2016

Large cap PE, your best bets at Bain and McKinsey.

Getting into MM and smaller funds, BCG, LEK, Parthenon and Monitor are all solid. Some people from those firms obviously end up at larger funds, and some of it is probably self-selection (at least w/ BCG) but there's a reputation among some in the industry that BCGers aren't as prepared for megafund PE compared to McKinsey or Bain.

Other four are probably less relevant. OW FS is probably better for HF than PE, but I don't know a ton about it. Booz is generally weak outside of energy, AT Kearney is weak outside of procurement and supply chain, and Deloitte is Deloitte.

May 28, 2016

Any advice on making the switch? i.e. types of studies, names of headhunters etc.

May 28, 2016

What headhunters have told me is that it's obviously helpful to have done due diligence/ M&A/corporate development work, but at the operational funds, it's also really helpful to have done growth strategy-type cases, and if the fund specializes in an industry, it's good to have worked in that industry but not 100% necessary depending on the fund.

If you want to do boutique/MM, just know as many people as possible. I've probably dealt with at least 5 headhunters...a lot of it is regional, and there are a ton of small funds out there.

May 28, 2016

From the headhunters I worked with, they dealt with McK, Bain, LEK and Parthenon. The firms that like consultants are the more operational ones, so having due dilegence work in addition to growth strategy projects was really important and they would want you to walk through one of each in an interview. Modeling skills are also important so any sort of market model or any other model that you got to do on a case is great for interviews.

May 28, 2016

An example of a PE firm that is consultant-friendly is Audax, which conducts solid DD on their prospective investments. If I remember correctly, the PE shop comes from consultant roots (I think started by bain guys?) That said, when a PE shop says they're thorough and follow through, that more or less translates to it being a sweatshop at the analyst/associate level.

Another name that comes to mind is Golden Gate Capital.
Also look at larger PE shops that have 'operational teams' (e.g. Capstone for KKR).

May 28, 2016
  1. Bain
  2. McKinsey
  3. BCG
  4. Parthenon
  5. Starts to really trail off here....
May 28, 2016

:O No love for BCG?

My formula for success is rise early, work late and strike oil - JP Getty

May 28, 2016

The list is accurate - BCG places very poorly into investment roles for a few reasons:

1) significantly less DD work than McK and Bain (especially Bain)
2) no PE practice to give associates interested in going to PE relevant experience/talking points
3a) openness to hiring from less quantitative majors (more so than McK and Bain) giving BCG a weaker reputation for quality control in finance topics in terms of outgoing associates
3b) on average, more "soft" projects and less of a pure analyst role for associates - this is not true across the board, but I know many associates who have gone through 2+ years without doing a single regression or 3-statement model
4) less openness to associates leaving for PE (it is not as big of a talking point in recruiting and is certainly not encouraged relative to the b-school or corporate routes)

Even given all the above, I think it is worth pointing out that the gap between BCG at #3 and Parthenon at #4 is very significant. I personally spoke to several funds that only look at MBB candidates and 2 headhunters who made the point that funds often don't look much further than that (exception being Golden Gate, Charlesbank, and others that regularly or even exclusively hire from consulting).

May 28, 2016

Hi ask_me_how_to_bs, don't worry, the WSO Monkey Bot is here.... I'm hoping one of these links will help find your answer:

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Maybe one of our professional members will share their wisdom: @ekrautheim @Aaron Burr @Cokie-Hu

I hope those threads give you a bit more insight.

May 28, 2016

24suits, have you checked out these or run a search:

Maybe one of our professional members will share their wisdom: @Alex-Lipinsky1 @conmart @masterchief

Fingers crossed that one of those helps you.

May 28, 2016

US -> international is very possible (the reverse is also possible but generally a bit harder). The key is to be there in person for the headhunter meetings and fund interviews. Find out who the headhunters are for that region, find a project in that region, do the headhunter and fund interviews, get an offer, celebrate. Simple.

Will be harder if you need special Visa sponsorship vs. the local candidate pool but still possible.

P.S. I know of a fund that does their entire international recruitment in the US but I think that is an exception. For most US funds with international presence London will be the second biggest office and will have its separate recruitment cycle.

May 28, 2016

It would be easier if you did an internal transfer to your firm's London office.

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

May 28, 2016

You might be right--and there has been a trend towards increasing consultants in PE.

That being said, I think there will always be more bankers, for the simple reason that PE doesn't really work without leverage. It's the whole business model. Even funds that supposedly focus on "operational improvements"--they can't break their 8% hurdles without leverage. Consultants definitely have strong skills, but their sense of their own value (like bankers) can be a bit overblown, no consultant can consistently make different companies' equity grow at 20% per year unlevered.

Now that leverage is unavailable, it definitely means that PE has a problem. But then again, it's always been a cyclical industry.

May 28, 2016

While operational knowledge is very valuable for senior professionals at PE firms, remember that your role as an analyst or associate will not be to drive value from operational improvements. Your role will involve number crunching, due diligence, and all of the standard skills learned at investment banks. While I think both bankers and consultants get very relevant skills to PE, I don't think the current environment will drive the demand for one side or the other. The only argument I could really see is that many ibanking analysts just aren't getting the experience that they used to be getting and thus aren't developing their skills as much. But still, I am of the impression that the consulting firms are getting hit in much the same way. All things considered, both parties are having a lot of difficulty securing private equity positions in this market.

~~~~~~~~~~~
CompBanker

Sep 11, 2018

I'm re-posting my advice to WSO'ers trying to break into PE here.
Sorry for this repeat posting, but I think this advice is relevant to PE-job-searchers.
Here's what worked for me, to hack the process and get in to PE.

  1. Conferences for networking: I attended industry events and set up quick side meeting. SuperReturns is in my opinion the best conference. They have a lot of PE GPs in attendance, and they have an opt out networking app so you can get your message in front of everyone.
  2. I brought deals. By finding, evaluating and presenting a few deals and passing them to GPs that I met at conferences I was able to keep top of mind and helped them see that I could add value to their firm. They could see how I looked at deals, and could see I might be able to help them source. Plus who doesn't like to have deals sent to them, right?
  3. Building a niche. I have been able to sell myself on fundraising ability, cleantech domain knowledge, and mobile Internet domain knowledge. Being a specialist means you don't compete against nearly as many people, as "you're a pool of 1". The biggest problem with PE is that there aren't enough seats for all the candidates. So by carving a niche, you can shift the conversation.

Lastly, it's also key to try to understand the counterparty. This is obvious so I won't make this a bullet point, but to the extent that you can really, really understand the hiring firm, and try to intuit what strategies they are trying to execute and where they have hurt points, that's where you'll find out what kind of a niche to carve out for yourself and how to position yourself.

Good luck guys! DM me if I can help.

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Sep 11, 2018

Last time I spoke with a headhunter from PER in London he was saying that there are more and more MBB people moving to PE - so it seems like there's an upward trend.

Sep 11, 2018
Patrick Batman:

Last time I spoke with a headhunter from PER in London he was saying that there are more and more MBB people moving to PE - so it seems like there's an upward trend.

Agree with this. Both "B's" are getting more and more guys places in PEs. Shouldn't be an issue tbh.

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Sep 11, 2018

I would try to get in pre-MBA if I were you, assuming that you plan on going to business school. But I had plenty of European MBB business school classmates get in post-MBA too.

The work is interesting pre-MBA and generally, I perceive the work environment to be better since it's buyside.

It's hard to comment on hours because it varied so much by firm, culture, and what kind of deals are happening at the moment. My friends told me London was more relaxed, so it's feasible that you could find a 60/hr week job there with the understanding that some weeks may be a bit higher.

You'll need to investigate the firms' cultures through your network.

Sep 11, 2018

-

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Sep 11, 2018

Saw some guys from MBB getting into PE, so the move is doable. If you aim for a MF then your hours will surely be higher than 60 and for me the work is quite interesting either pre-mba and post-mba.

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Sep 11, 2018

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Sep 11, 2018

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  • More suggestions...

Calling relevant professionals! @SJ-TAN1 @Billy Beane @james.l.beckett

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

Sep 11, 2018

mba doesnt help unless you have pre-mba pe experience. much much harder to get pe post mba if you dont have any exp

Sep 11, 2018

I agree with ledger, and Booz really doesn't place all that well into PE, at least nothing compared to MBB (Bain and McKinsey in particular)

Sep 11, 2018

So what would be the best route to get pre-MBA experience coming from prop trading? Should I gear up and try to land a position now, or should I try to gain valuation experience and apply in a year or two?

Sep 11, 2018

You should gear up and try and land a position now

Sep 11, 2018

Prop trading to PE directly is pretty much impossible. Booz to PE is at least possible (esp if you kill the gmat, get into H/S/W business school, go to MBB, and enter PE at a more senior level).

Sep 11, 2018

The first thing that I noticed was format. It is incredibly condensed and isn't enticing to read. I know you need all this on one page, but it hurts my eyes!

Sep 11, 2018

non-target with a no-name internship landed at MBB.

buddy you should count your blessings, not push your luck.

Sep 11, 2018
LLcoolJ:

non-target with a no-name internship landed at MBB.

buddy you should count your blessings, not push your luck.

I love when some jackass like LLCoolJ posts pointless junk like this. Why even bother posting in the first place?

Sep 11, 2018

Dude, he was first in his class. That's hard to do anywhere and U of M is no joke either.

Why do people always assume that non-targets who end up in amazing jobs are lucky? Has it ever occurred to you that he might have worked his ass off against all the other target school kids?

"Rage, rage against the dying of the light." - DT

Sep 11, 2018

That first block of text needs white space. Also, it's not "teacher/Ph.D. candidate" -- just Ph.D. candidate is fine. GL.

Sep 11, 2018

i think you could try getting on more dd/cf related projects

i dont see enough points showing you could be a modeling monkey (more relevant for bigger funds)

Sep 11, 2018

I would take a look at some of your long descriptive sentences. The one describing your IBD experience could sound much better. "Contributed to nearly every step" is rather vague opens a lot of questions about what you were doing.

Sep 11, 2018

Hey guys -- all of this is really helpful (minus pointless jab made by LLcoolJ) will definitely make some of the changes suggested.....I agree.

Sep 11, 2018

Let us know how it turns out.

Sep 11, 2018
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Jul 23, 2019