EY OTS rebranding to EY-Parthenon M&A Strategy - Thoughts?
I'm a 2nd year MBA who has friends who were at EY OTS over the summer. They've been invited to join the "M&A Strategy" practice at Parthenon for the return offer and the practice is advertising themselves as such on campus for full-time hires. Basically, they're creating an "S&O" practice and refer to themselves as such internally (but not externally), legacy Parthenon being the S, and OTS being the O.
Apparently they're offering all hires $170k base to be in-line with Parthenon and competitive with MBB.
Here's the question: Outside of people feeling good that the name was changed, does this change matter at all in terms of resume strength or exit opps? It seems like the barrier between Strategy and Opps will still be there; rather, they're just trying to make the OTS people who are undoubtedly re-recruiting for mbb or even Tier 2 feel good by throwing them the Parthenon name bone. This isn't to knock OTS at all, it's doing incredibly well and is top-notch at what they do, even beating out MBB on engagements, but it ain't strategy work, and it seems that the word will get out pretty quickly that this name change is just cosmetic.
What does everyone think? Does this increase the prestige of the group at all or not really?
It's kind of dumb, but at least on my campus it's already had a positive effect for them. Some friends that were there over the summer that would have re-recruited for T2s stuck to just MBB. There is a lot more interest in the group and general "buzz" from the first years compared to when it was OTS. It's hard to isolate the effect of the dramatic pay increase from the effect of the name change though. As far as exit ops, its hard to say... if you put EY-Parthenon on your resume will employers be able to tell the difference?
Although not in the industry I know many who are and the reality is, big picture, there is a huge blend of S and O at many / most shops. MBB does a ton of ops work now. They didn't awhile back, but they do now as clients are looking for "end to end" engagements. Although many think of pure strat as being sexier, the reality is getting great ops experience is critically important if you plan on exiting to industry and want to run a company.
In fact, when my older brother was at MBB (post MBA - actually when they only hired post MBA from about 5 schools), he left after his role of EM because he was getting tired of making all the recommendations and never being afforded the opportunity to stick around to see the result. He found a happy blend of S and O (called running a company) in industry.
From what I read and in speaking to those in the game, tons of projects at major firms involve a blended team and in early yrs you would likely be staffed in both capacities no matter what the business card or brand name says.
While I agree that MBB does a lot of implementation, I think what gives some people (including myself) pause about OTS is that it's strictly pre/post integration/divestitures along with some Working Capital projects... it just doesn't seem to leave a lot of room for strategy at all and seems rather intellectually unstimulating, more just project management and herding people.
This could just be my impression, though.
Honestly don't know too much about OTS specifically. I would seek out live bodies and ask some pointed questions. EY-P was / is very much involved in Strat so maybe they're blending the two to give that end to end experience I mentioned.
I believe that EY's equivalent to Strategy&'s Private Equity Value Creation group (due diligence, operational transformation, some strategy) also fell under OTS. According to the Parthenon US recruitment page, it's moving with the name change.
That being said anyone recruiting into this looking for McKinsey-lite will probably be disappointed. It's a solid choice for someone who wants to work in M&A, but doesn't want to do banking.
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None of the examples you mentioned would be classified as the strategy capability at MBB. When people say your Deloittes and PwCs start beating MBB on xyz strategy capability, it's often not considered a core strategy capability by MBB.
As an example, "Is working directly with the head of Inventory at a multi-billion dollar retailer to outline a plan by which the firm is going to renegotiate terms with all of its vendors and customers to free up $100m of working capital over 12 months strategy?"
This would fall under the procurement capability of MBBs Ops teams and which are considered implementation skills. The question whether freeing up $100m of working capital is the most critical path to take for that same retailer - or what else is higher value - is the strategic question.
I'm not trying to turn this into a comparison of EY and PwC. But our Deals Strategy team focuses on two core types of engagements:
Questions around markets, customers, channels, and competitors in an acquisition. This work is concentrated at the top 25 private equity funds, in addition to large middle market (a few billion or more in EV) corporate acquirers. Often under the label of a commercial diligence but usually with specific, material questions and concerns around an acquisition that we are hired to investigate. Such as whether an acquisitions product portfolio is a fit for the acquirer's current channels to market. The work tends to result in a direct go or no go decision. I've worked on projects that have greenlit or killed Deals for top 5 private equity funds and $10B corporates. I have also worked in nascent market areas where a potential investor is evaluating opportunities in relatively untested environments.
The second large bucket of questions is around growth of a business and/or improvement of the commercial portion of an enterprise. Our sponsor on these projects is typically the CE. Results typically lead to a redefinition of a business' core, material divestitures/acquisitions, and a full transformation of a businesses commercial structure. Businesses tend to have at least a few billion in revenue.
I've spoken at length with friends at MBB and the work we do parallels many projects they have worked on. Don't get me wrong - we don't get the biggest or sexiest growth strategy projects on the markets, MBB is light years ahead there. But it is definitely strategy work.
Our group was founded by recruiting external partner/director talent whose experience ranges across BCG, Bain, McKinsey, LEK, Marakon, Altman, Roland Berger, and specialized boutiques. They are oftentimes leveraging their prior relationships in order to sell work. PwC's strong PE relationships and other Deals capabilities (financial diligence, ops, tech, implementation, etc) provide them with significant networking opportunities and are a resource in sourcing work, which has been a large driver for our partners to join our practice
Agree on all your points around the referenced projects sitting in implementation/operations/procurement teams. It is similar here.
I don't think anyone would suggest that this practice is going to compete with MBB for core strategy projects or talent. If OTS and Parthenon are moving towards a common staffing pool (as some have suggested here), this becomes a lot more attractive as a fourth or fifth choice for those recruiting on campus.
Exits to IB?
If you compare the LinkedIn profiles of the interns 3 months ago to today, you'll see that more than half already changed the title of their internship to reflect the Parthenon name.
Parthenon is keeping their target schools for Growth and for M&A separate, but most of these schools are top tier. I wouldn't be surprised if 4 years from now both arms recruit from the same schools.
The name change definitely increases the brand value, and as others have suggested, the staffing pool might merge at some point in the future. M&A brings a huge growth potential to Parthenon, and according to their website, it represents 70% of the work they do. I think it's here to stay.
I know some people that were at legacy Parthenon and have slowly left in the years after the integration. The last person to leave told me that EY is running the show along with the internal hierarchy, processes, staffing, etc. For example, Parthenon doesn't travel much similar to LEK, very office based. Whereas, EY is typical M-Th at the client.
If you want more "pure consulting firm" and less "Big4 firm", then maybe it is not for you.
I have been offered an internship at EY-Parthenon M&A Strategy. I am an undergrad. I wanted to know what is the full time compensation for M&A Strategy for undergrad hires. Can anyone help? Thank you so much!
Standard Parthenon Comp... $92K + $10K signing + performance bonus of up to $10K
Base is $90k not $92k!
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