Corporate Banking to VC/PE?

I am having trouble breaking into investment banking from consulting and landed a corporate banking role. It might be my only door into finance. I really want to get into VC or PE one day and am okay with small shops, not aiming for bulge brackets or prestigious PE shops. Would any of the routes be possible below? I know it will be tough and unlikely, but are they still doable?

Corporate Banking > VC/PE

Corporate Banking > MBA > VC/PE

Corporate Banking > MBA > IB > VC/PE

Corporate Banking > IB > VC/PE

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Comments (16)

Dec 22, 2017

CB -> IB -> buyside is really the only practical route out of the ones that you list. CB to IB is pretty common, especially when you work at a bank that does both. There's some small chance you might be able to go from CB directly to the buyside, but I think a lot of those opps will be at private debt funds.

FWIW, CB at the right bank/group is a pretty sweet gig imo. You make pretty good money and the hours can be very reasonable.

Dec 22, 2017

Depending on which consultancy you're working for you might have better luck staying in consulting than going to corporate banking.

Of the options you mentioned the last two seem the most viable/practical. Whether you go do an MBA or not, it'll help to have banking experience (preferably in the relevant coverage group)

Assuming you're set on leaving consulting (if you don't think your current firm will open enough doors), I would try to transition to IB after some time in corporate banking (ie. pre MBA)

Dec 22, 2017

If the CB role is at Citi, go for it. I know they are merging their CB and IB division, they are very strong in CB and they encourage rotational program (you can move to Lev Fin or M&A)

If it isn't at Citi, go for an MBA in a Top BS and then go for PE/VC or IB

Best Response
Dec 22, 2017

@CHItizen @orangemarker @PatrickBateman1

Thanks, everyone. The consulting firm I work for is a management consulting firm, but heavily focuses on life sciences and I am on the analytics team. Working strictly with data isn't giving me the consulting/business experience that I wanted and I was not able to move laterally within the firm to the general consulting side (you need a science background and I was a finance major from a non-target).

Because of how unhappy I am, I am almost desperate to get out and CB seems like my only hope - just wanted to make sure I am not shooting myself in the foot if I want to get into IB or PE in the future. The bank is middle market and has a lev-fin/capital markets group, but not traditional IB like M&A.

From what you all said, it at least seems like a foot in the right direction and I might be able to break into IB in 2-3 years? Or I can move to their lev-fin group.

    • 2
Dec 22, 2017

in my opinion an MBA makes sense if you can do in a Top BS, otherwise it is difficult to be hired as associate in PE or IB.. Go for the CB firm and then try to move in LevFin

    • 1
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Dec 22, 2017

Gotcha, yeah going to CB would probably set you up better than your current job, but it's still going to be tough. Once in CB, you'll probably have better luck with boutique IB or maybe coverage groups at some larger banks that do a good amount of financing work

Dec 22, 2017

Not possible from CB. You need to somehow move into IB. That in itself won't be easy but not impossible. From there, you can then try and get to PE / VC. VC is not likely given your background. Small PE is more likely but even then it's an uphill battle for you.

Dec 22, 2017

It will be more of an uphill battle IMO. There are a few issues that I see with moving from CB to PE:

1) Your view is always from the creditor's perspective, not the investor's perspective. There is obviously overlap, but the creditor's are always looking at the downside scenarios. Investor's need to be focused with upside, base and downside to determine what impact different levels of performance will have on IRR.

2) Since your group is only concerned with its portion of an LBO, you may lack understanding of capital structure in its entirety. Modeling also doesn't factor in all of the various tranches of debt or equity beyond those that directly impact cash flow, and hence, the banks covenants.

My thoughts are:

If you go back to grad school, you'd still find it very difficult to move to PE directly. I know it is difficult to move from IB to PE after the analyst and before the senior levels, but it has been done (for MM funds) at the post-MBA associate level.

That being said, my first choice (if I was in your shoes) would be to target either senior debt funds or sub/mezz debt funds. I've seen CBs move to/from sub/mezz, but you would probably be best suited for BDCs (i.e. Ares, Prospect Capital, Triangle Capital) or senior funds/lenders that focus on lev fin (i.e. GE Capital - Antares if possible), NXT Capital, CIT, etc.).

More exposure to LBOs and PE funds would be gained from moving to either and your understanding of the capital structure will improve.

Just my thoughts.

    • 1
Dec 22, 2017
peinvestor2012:

) Since your group is only concerned with its portion of an LBO, you may lack understanding of capital structure in its entirety. Modeling also doesn't factor in all of the various tranches of debt or equity beyond those that directly impact cash flow, and hence, the banks covenants

I highly doubt they only look at their tranche in autonomy. You're basically saying they don't care about cash balance or total debt or permitted payments (e.g., dividends)

Dec 22, 2017

Thanks! That was very helpful!

You touched on some very good points and I'm more aware of the differences now. Its true that we are more focused on the conservative and downside case. And we also care less about other tranches unless they are above us somehow.

With that being said, do you have any advice on how to start targeting those mezz funds you mentioned? Should I contact headhunters and explain my story and skillset? I have a feeling most headhunters don't have a good idea of what my job consist of. Also, do you think lateraling to an investment bank as an analyst is a good move?

Dec 22, 2017

I think lateraling to IB would be a great idea if you really want PE. Again, it will be tough, but if you move down from BB to MM, it gets easier. Find banks that aren't pure M&A shops and really promote your capital raising and financing skill sets.

Honestly don't know that much about how Mezz funds recruit. My guess is it's relationship driven, but maybe @TNA could provide more color on that. I get emails from time to time through some networks I am apart of at the regional level.

Dec 22, 2017

Corp banking would be an ideal fit with a senior lending fund. You are working with similar products and in a similar tranche in the capital structure. Mezz is going to be more modeling intensive and the closest thing to an equity investment (many times taking an equity co-invest).

It sounds like you are at a BB working on like BSL deals or something like that. A lot of the debt funds mentioned above operate in the MM. Corporate banking in that realm is a lot of ABL's and Sr. TL's. Your best bet if you are up market might be to try and get into a lev fin group that models and then lateral out to a mezz fund.

Dec 22, 2017

I have a resume-related question for applying to lateral roles or exit opportunities. Should I structure my experience on my resume based on new deals (underwritings) or just general bullet points of what I did? The heavy lifting really comes into play during new deals and I think that's the best way to represent my experience, but I'm not sure if a recruiter might laugh at the structure since they are only underwritings. I also don't want to mislead anybody into thinking I'm working on capital market & advisory transactions.

What do you guys think I should do?

Dec 22, 2017

I mean I think PE is saying that if you are a senior lender you analysis will be centered around the ability of the company to repay your debt. Since a junior lender will be set back covenant wise you'll be less concerned with that. I mean leverage through your tranche is the main concern. I do suppose you'd be focus on junior debt in the sense that the cash interest will impact your FCCR.

Different shops do different levels of diligence also. Some might be more relevant to PE, etc. In general, if you are doing senior lending you will have a more limited skill set than what is needed in P (IMO).

Jan 9, 2019

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