Seeking Advice on How to Get into PE without an IB or Mgmt Consulting Background
Hi All,
The goal:
- Begin my first day of PE as soon as tomorrow without full-time IB or Mgmt Consulting experience or enrollment in B-School.
My Stats:
- CPA
- Currently a Big 4 technical accounting advisor (transaction accounting, financial reporting consulting)
- Former Big 4 Auditor (two years)
- Investment banking internship experience (two summers at a BB)
My question:
How do I begin my first day of PE as soon as tomorrow without full-time IB or Mgmt Consulting experience or enrollment in B-School?
- Note that I'm not opposed to these more traditional routes - simply prefer to develop all of the needed knowledge on my own.
- I'm asking the forum because many persons I personally know seem to struggle to see things outside of the box
- Yes, I have a strong background in accounting
All advice is greatly appreciated. That's for the time and attention.
- CPA
Probably best off networking with local PE funds first.
Thanks for the note.
Disclaimer: I am in no way trying to bash your goal or discourage you. However, I think it’s helpful to be brutally honest when looking at situations like this. Again, I am not trying to bash or put you down.
It's going to be very tough. VERY TOUGH. You can go to any PE website (or LinkedIn) and you're going to have a VERY difficult time finding a junior person with your background on the team page. In my experience, I've never heard of an accounting advisor to PE associate story. Also, I highly doubt a headhunter will send you any PE opportunities if you met with them.
Let’s take a look at the buckets of folks you’re up against: 1) 1st-3rd year analysts @ BBs and boutiques 2) 1st-3rd year associates @ BBs and boutiques (yes, there will be candidates from this pool) 3) Post-MBAs with prior PE experience 4) Post-MBAs without prior PE experience 5) Juniors from top consulting firms 6) Current PE associates looking to leave 2-3 year programs to find possible career track seats at other PE shops
There are significantly less PE opportunities than IB opportunities. Also, not all PE shops recruit every year like almost every IB program (BB or not). This is what you’re facing as an accounting advisor/ex. Big 4 auditor. Why would I have a coffee with you as oppose to the Citi and MS analyst who emailed me this week for coffee? Again, I’m not trying to put you down. I just want you to have a realistic view of how high the hurdle is you’re looking to jump over. If somehow you did manage to get an interview, it’s a high chance you would get crushed. “Walk me through a deal and your role” is a question you’ll get everywhere and you can’t answer that like an IB analyst. I’m just struggling with how I could come to a conclusion that you would deserve a seat more than the middle-ranked analyst at an IB shop.
With that being said, I personally believe anything is possible. Also, given how negative I was above, it would be remiss of me if I didn’t offer some possible solution. Here are some things I would consider if I were in your position: 1) Get an MBA from a top business school (I’m aware your post says no MBA, but let’s be real). You’ll still have to combat the lack of PE experience pre-MBA, but at least you can leverage an alumni network. I would strongly consider Wharton given its heavy finance focus because you’ve spent years lacking the modeling and valuation skillset you would have developed daily if you would have took the traditional IB path. Wharton’s heavy finance focus can help you bridge this gap. 2) Leverage the experience you do have and find some operational role at a PE shop. This is called getting your foot in the door. Once inside, you will physically see the investment team every day. Pull one of those Will Smith (Chris Gardner) “Pursuit of Happiness” moves and go beyond the call of duty. Get to know the investment team and absorb how they operate. Try to sit in on meetings you don’t have to sit in on. Offer to help a deal team in a junior analyst/associate role. Do this right and you might create an opportunity for yourself to interview for a lateral move to the investment team. Making a lateral move to the front facing roles is tough in IB and PE, but as a guy in the door, you have a toolset to work with people outside don’t have.
3) Take an hour or so one weekend and do a serious self-assessment. Do you want to do PE because Wolf of Wall Street/models & bottles or is it a genuine interest of yours? I used to want to be a Pediatrician all my life, but I changed my major from Pre-Med Biology once I noticed how I spent most of my leisure time reading finance material as opposed to anything science related. In other words, make sure you aren’t just going through some phase. I stress the self-assessment b/c reaching for PE, with your background, at this point will be tough. The only way I see it happening is if you have some unrelenting desire like Michael Jordan in the 4th quarter of game 7. If you do determine this career isn’t for you, maybe investing your own capital in your spare time will be enough to scratch that inch to be an investor.
Good luck.
Thanks a ton for your thoughts.
If you don't mind, I have a few follow-on points: - to what degree does the CFA designation propel one forward in this pursuit? - what are the criteria you use to determine if a candidate possesses solid modeling skills (I.e., FS articulation, valuations, forecasting)? - beyond deal experience, what type of things excite you about candidates?
Thanks!
poster above is correct. while nothing is impossible, you getting a PE job is HIGHLY improbable. CFA doesn't help. and deal experience is above and beyond, the most important thing. your best bet is to get some type of transaction oriented experience, go to a top 3 business school, network like crazy and then hopefully get in at a small lower-middle market shop or a startup PE fund.
Getting Private Equity without IBD experience? (Originally Posted: 10/16/2013)
Is it possible to break into PE at the associate level without IB experience? I would think not given how competitive these jobs are, but figure I'd ask you guys here.
I have the chance to network with two director level PE guys which I am going to do regardless, but I am curious if I even have any chance of something materializing. I have reserach experience on fixed income desk, but at worst it would be nice to talk to some people.
Yes, but you need consulting experience. PE generally pulls from the operations side (consulting) and the financial side (IB mostly). The alternative is working internally as an accountant/CFO.
I don't see how you get there from Fixed Income, unless you have experience w/high yield and the PE fund targets distressed investments/debt.
I do, and they do but at the same time it is so unusual I still wonder if it is worth the exploration.
I have limited experience with PE or how any of this would work, but from a career and personal development standpoint it is ALWAYS worth the exploration. If you have a chance to network with people, do it, even if it is outside of your specialty. You can always learn something new and make new contacts.
Depends on the company. BX london said clearly that they don't really hire any consultant.
Banking experience necessary? Or possible to do straight PE? (Originally Posted: 05/31/2011)
I was curious if banking experience is necessary at a top PE firm. If I have an opportunity to accept an internship at a small PE firm, will this be looked at favorably in the fall when I apply to other PE firms for a full time position? or will they not care and prefer people with an ER or IBD background?
depends on the experience it provides, most top PE firms only take top candidates from BB because they can assume you received top tier sound training - coming from an unknown shop doesn't scream top tier experience and they will be hesitant to accept and train an applicant when pitted against a proven and brand name applicant.
PE out of UG is normally only for top students at top targets (e.g. Wharton-Silverlake).
WHat about smaller PE shops, are they also for top-students at top-targets?
From what I've seen on both the HF and PE side recruiting at the undergrad level happens most frequently at a) very large firms that can support an analyst program or b) very small places that need a small junior staff to help out a lean team of senior people and/or have a more flexible process in general. In both cases, the undergrads who get hired are either a) top students from top schools or b) have close contacts with decision-makers at the firms.
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