Getting into private equity from an operational background

Hi!

I'm a newly minted 30 year old looking for advice on whether it would be possible to get into private equity with a rather unique background.

I've got a degree in Aerospace Engineering and a Master's in Engineering Management from an Ivy League school. My experience includes 3 years as a software engineer with Bloomberg, a year working in an aerospace startup in India, and 3 years co founding an Architectural Engineering business in Dubai which was eventually taken over.

I'm looking to get into PE cause my last stint setting up a company got me heavily interested in the business side of the world, especially the whole idea of investing in businesses and restructuring them (which is kind of what happened to my company, albeit at a smaller level).

PE seems like something I would genuinely enjoy doing, but I don't see a clear path to it. I figure my best bet at this time would be to try to get into a top MBA program, and then follow the IB Associate -> PE route. But I don't know how feasible that is given that I'd be applying to enter an MBA at 31, and be looking at Associate positions in IB at 33 with no direct finance background.

What are the chances that I can successfully follow this path given my current age / responsibility levels (I'm looking to tie the knot in a year or two)? What are the chances of a successful entry into IB with my kind of background, even with an MBA? And even if I do get in, is it really worth going through the IB grind just to get to PE (I heard that very few people actually make the transition and I honestly don't envision a long term career in IB).

The other option is I try to break into a venture capital firm, and then try to move into growth funds and PE, but I don't even know if that is feasible.

Any advice on this would be greatly appreciated.

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Best Response
Dec 31, 1969 - 7:01pm

Investment Ops Straight to Private Equity - Success Story and Request for Advice (Originally Posted: 04/22/2016)

Greetings fellow primates,

I am new to WSO but have been lurking for a few days since joining and am gaining a feel for the culture and types of posts that are helpful to others. I joined WSO because of a recent success I've had in my job hunt that has landed me in a role more relevant to the community, and I thought I could learn a lot by plugging in here. Hopefully my story will give motivation and hope to others that may need it.

In the hopes of avoiding "TL;DR", the punchline first: I made a transition from investment operations at a large global AM firm into MM PE at a young but growing firm.

Background

I attended a top 25 undergraduate university (in the USA) that is a target school for many top consulting firms, IBD's, and other swanky establishments. I double majored in financial econ and political science but also did a non-degree yearlong program with the undergraduate business school. I didn't realize I was interested in finance until later than probably most here (my junior year) when I took a class on financial market theory, but I definitely feel in sweet nerdy love with it. However, I never got interested in IB. If anything, at the time I would have loved to go the buy-side research route. I didn't know much at all about typical Wall Street career paths or even much of the substance of what IBD's did, which may not be surprising having been an econ major and more exposed to theory than practice. Basically, I was a late bloomer and paid for it. Additionally, it was much harder to network and get interviews in the field for econ majors because our undergrad business school was so great. I never got any great internships to speak of. For majors outside of business at my school, consulting was a hugely popular pursuit. I succumbed to the peer pressure and interviewed for those roles (not MBB but Deloitte and a few smaller ones), but my heart was never in it and I couldn't close in final round case interviews. Fall of my senior year, I ended up taking one of two jobs offers I had, in investment operations (the other offer being outside of finance- the reason I turned it down). A year and nine months later, I'll be starting as an associate at a small PE firm in my area.

Starting Out In Ops

Only a couple of months after I'd started in ops, I realized I would need more. I needed to start building my skill set and my network and be relentless about pursuing opportunities as they came up. I wasn't targeting a specific role- I would have taken IB, PE, ER, anything that was more analytical and still in the field. That's because I was in it more for the experience and knowledge than money (but yea, money and prestige are always nice and don't pretend they aren't). I was hungry for that type of role.

A few months after I started at the AM, I experienced my first Wall Street-style interview in NYC. I was great with current events and behavioral questions but bombed accounting and was meh with the brain teasers. I didn't get the job. I wasn't going to get by on my wits this time around, as I had most of my life.

I had planned to do the CFA program since college, and I started it last year. I passed the Level I in December and am slated for the Level II in June. I'm sure this helped on the margin, but as others may have mentioned it is more of a buy side credential and may not be helpful if you're pursuing a sell side role initially. But I enjoy the technical knowledge and it was good for me to develop more financial statement analysis skills especially.

Interviews

I had several other interviews between that NYC one and getting the PE offer. None in between were IB or PE. Last November, I noticed a job posting for a PE associate on my school's alumni jobs website. I had not really considered PE, as it seemed pretty far out of reach for me. I thought I'd end up in a more analytical public equity or fixed income research role. However, the more I learned about it, the more interested I became (getting exposure to deals, financial modeling, better hours than IB, learning the operational and strategic sides of the businesses too- what's not to like?)

The role was a with a young firm started by a fellow alum (and H/S/W MBA, GS IB alum). I reached out and we met several times over the coming months. He had me complete a couple of interview projects, one being qualitatively analyzing a company and the other building an lbo model for a real private MM company along with a PowerPoint to potential investors. No questions were allowed. I had to soak up a bunch of knowledge about LBO's for the second part, as I basically knew nothing, but I was pleased with the final product.

Partially to my surprise, I ended up beating out dozens of former/current ibankers, MBA's, and who knows who else. Everyone wants to get into PE I guess, even at a very small fund. But the managing partner/founder saw something in me and extended me the offer. While I obviously think he made the right call, I can definitely say I had luck on my side too.

I've obviously taken a non-traditional path into PE. I'm extremely excited to be starting and working extremely closely with the managing partner. I have never done IB but have pretty decent financial knowledge and intuition from my schooling, the CFA program, and exposure to the nuts and bolts of equity and fixed income markets from my ops experience. I would, however, love advice from others in PE (or IB, for that matter) about what skills I may need to brush up on, books to read, ways to organize work, etc. I want to soak up some of your wisdom!

Tips

Finally, my tips, humbly submitted, for anyone looking for their first Wall Street-style role, be it PE/IB/ER/HF/etc.:
- Know your accounting. Never underestimate its importance. This is especially true the more ambiguous or complex the financial statements get. Knowing the why and how behind the numbers is invaluable.
- Network. I shouldn't have to sell you on this, since most posters here will emphasize it. This becomes (imho) more important the further you are removed from undergrad or an MBA program.
- No matter how smart you are, respect the value of hard work and learning from others.
- Persevere. There have been stories posted here that involved much steeper uphill battles than mine. Allow me to add to the pile of convincing testimony that perseverance is the secret sauce to fulfilling your dreams.

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