This maybe a very stupid question, but I have been thinking recently, in terms of modelling skills and industry knowledge an ER analyst should annihilate an ibd analyst, shouldn't then PE/HF placement for er be much much better than for IBD?
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Ok I can't follow the original post... Are you asking if moving from ER to PE/HF is easier then the move from IBD to PE/HF????
yes thats exactly what I am asking sorry if OP was unclear, and additionally some reasoning for why/why not would be interesting
My $0.02. In IBD you're frequently building new models, either from scratch or from some sort of template, hence you'll get a lot more experience in building models. In ER you're going to have one model for each company you cover that you'll continually update, but the only times you're building new models from scratch is when you launch new coverage. Also the work in IBD is much more transaction oriented, as is the work in PE.
Now ER to hedge fund is common, because you're doing very similar work. In ER your job is to know one sector of one industry and a handful (15-20) of companies within that sector very well. Have an opinion on the sector and companies and be able to sell your ideas to buy-side clients. As a HF analyst or PM you're essentially doing the same thing, but instead of selling your ideas to the buy-side you're implementing those ideas at the fund and hoping they make money.
An ER guy is not going to have as much deal experience as an IB guy, and won't have as much industry experience as an actual industry expert.. Puts you in a disadvantage because you are not the ideal candidate for an operating role and not really a "deal" guy either.
2 more factors
IBD is more selective, and people in the industry care about pedigree.
Most PE people have historically come from banking, and it's worked before. People in the industry are risk averse.
I feel like all the above post are directed towards moving into PE from IBD, which is all true to some extent I suppose.
I feel that an advantage of going IBD to HF though is the ability of the fund to mold the new hire into what they want. I feel a specialized ER guy though might have better skills overall to transfer into HF, modeling, contacts, ability/ how to talk to mgmt, industry knowledge/coverage knowledge. Problem is most ER junior guys become relatively specialized within 1-3yrs it seems
It must be part of the US culture, like the "compulsory" MBA and all that. In Europe it is mostly IBD --> PE and ER --> HF. Mainly because the former deal with the private sphere and the latter with the public one.
^ yeah, a fair amount of the people working in ER whom I interned with were ex-IBD.
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