Equity Research to PE - Have been working in sell-side ER for a large bank for almost a year

Joema35's picture
Rank: Senior Chimp | 22

Hi, Ive been working in sell side ER for a large bank for almost a year now. To be honest, its not what I expected it to be and don't want to pursue a career out of it in the long run. I figure that I will do another year in it and then pursue other opportunities. I am interested in pe and was wondering how smoothe the transition is. It seems as if a 2 year analyst stint in ibanking or mgt. consulting is the natural path into PE. I have a few concerns and would appreciate any input/advice. Thanks in advance.

What skills do pe shops look for in a candidate for pre-mba/post mba associate position?

What skills does someone in ibanking/mgt consulting have that someone in ER does not? In ER, you can get a good mix of modeling, interacting with company management/clients, writing, analysis, industry expertise.

Would it be easier to get an mba at a T20 school and transition to pe as an associate or transition from ER to get a pre-mba associate position?

Do you know of anyone that switched from ER to PE? IF so, how many years did they spend in ER?

Comments (21)

Feb 19, 2007

I am interested in this as well since I am in the same type of situation. I have thought about trying to go to IBD and then to PE after my ER stint, but I do not know if it is required to break into PE. It would be a pain to be an analyst again, but I am willing to do it if it is needed. Anybody who has an information on a suggested career path after ER would much appreciated.

Feb 19, 2007

Slightly off topic, nut I'm wondering what you don't like about equity research. I think I may want to do this so i'd like to hear some opinions from people who are in this field.

Feb 19, 2007

Yes, it is possible, I know someone who started in ER and is currently an associate at a top-3 PE firm.

Feb 19, 2007

did s/he do anything in between?

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Feb 19, 2007

Yes you can get into PE. I know of a few tier 1 and tier 2 canadian shops that have hired research backgrounds.

Feb 19, 2007

its like, totally possible.

Feb 19, 2007

dude, that so rules. What canadian shops? I have a Canadian background but I also went to a monster UK school and an Ivy for other research - I should bring it to the T. Dot.

Feb 19, 2007

yeah its possible, i know of someone who did ER at ML for a year and he had a friend working at a great PE firm get him an interview there and now he works for that firm.

Feb 19, 2007

Have a friend who did 2 years ER at Lehman and is currently in his 2nd year at Bain Capital.

Feb 19, 2007

He ended up having to go to a small PE shop because of market conditions and not recruiting during standard PE hiring season, but he was very determined and recently made the switch.

Make sure you do a lot of LBO model practicing... that is one thing that can get those who haven't worked in M&A/LevFin etc. before.

Feb 19, 2007

You'll get basically two kinds of responses:
a) No it's impossible because only M&A bankers from Goldman work in PE!
b) I know a guy who went from back office at Jeffries to MD at KKR anything is possible!

The thing is that the traditional paths (M&A/IB>PE, ER>HF) make sense in terms of the skills you learn at those jobs. Alternatives are possible but less common both for logical reasons (skillset) and laziness (it's easier to make a safe hire). To do something off the beaten path you'll need to work harder at networking and selling your story-that was my experience going from a Big 4 valuation group to a HF.

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Feb 19, 2007

Very difficult would be my guess. Perhaps you could eventually move over to a small PE firm, but megafunds/well known MM funds target the top groups at the higher end investment banks.

Feb 19, 2007

I've seen quite a few ER to MM PE personally. Common overseas, but not as common in the US. Despite what you may think, you actually get a very similar skillset in ER in terms of modelling, thinking about investments, etc. You also probably come out with a better macro perspective that will impress potential interviewers. Just look on linkedin, you'll find quite a few people who took the ER to PE route. Maybe difficult in the US but I've seen it done. I've seen almost everything to PE actually. ER a little more common than some of the others.

Feb 19, 2007

Hi all,

Thanks for the responses so far. Couple of things:

  1. I really, really could care less about working for a megafund. My profile is 3.5 from a non-target with no amazing ECs that can't get a job at a BB in M&A, so I wasn't really counting on getting into KKR anyway.
  2. I'm actually more interested in working in Asia in the future versus the US, so would that make it more doable, since it appears that ER => PE is more common in other countries based on the replies? Would I still be much worse off compared to doing M&A overseas as well?
rebelcross:

I've seen quite a few ER to MM PE personally. Common overseas, but not as common in the US. Despite what you may think, you actually get a very similar skillset in ER in terms of modelling, thinking about investments, etc. You also probably come out with a better macro perspective that will impress potential interviewers. Just look on linkedin, you'll find quite a few people who took the ER to PE route. Maybe difficult in the US but I've seen it done. I've seen almost everything to PE actually. ER a little more common than some of the others.

Feb 19, 2007

You just need to impress everyone you interact with on a daily basis because eventually someone will notice your talent and want to pick you off. It is not all about where you start, HF's and PE funds start all the time and are always looking for talent. But typically you will have a much easier time going from ER to a HF not PE, just because of the type of work that is involved.

I am the most non traditional path, all buy side internships and then a PE analyst job so you just never know what opportunities will be offered....

Feb 19, 2007
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