Group Placement for MM Investment Bank to MM Private Equity

Hey all,

So my goal is to eventually get my foot into the door when it comes to Middle Market private equity recruiting. In that regards, I have a question on how to best position myself for getting into MM PE based on the group I get placed into when I start work at my MM Investment Bank.

The bank that I will be working for isn't ranked high in terms of prestige and to be honest, I am not quite sure how they place in terms of PE exit opportunities. However, in order to optimize my chances and make do with what I have, what should be my top choices for group placement?

Choice Between A or B

A) An intense industry coverage group at the bank with great dealflow, the one group that the bank is most recognized for, but its for an industry whose exit opps are usually not PE due to the nature of the sector (very capital-intensive)

B) Financial Sponsors group, even though modeling will most likely be sourced to the coverage bankers

What it basically boils down to is whether its worth working in a group where dealflow will be extremely good even though the companies you are working with are not the companies LBO shops target VS working in your typical financial sponsors group even though you will not be getting that great of a modeling experience. I suppose the middle ground is a group where dealflow isn't as good as that one particular group but where I will still be looking at companies that are targeted by PE firms.

Thanks all - looking forward to getting some opinions on this issue!

 

a group with dealflow, there are some funds that would take analysts from other industry groups given you have the skill sets

 

It's a toss up - normally I would say go with the dealflow, but it sounds like you may be referring to a group like public finance, real estate, infrastructure, or something along those lines, which can sometimes be a little tougher for PE placements. Can you offer any more detail?

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 

For the sake of anonymity, I won't be able to say outright what it is but I can tell you it's neither of those. It's a typical coverage group at any bank though that falls under the IBD umbrella.

 
Best Response

I worked in middle market IBD (think Jefferies, HL type places) and now work in MM PE (i.e. sub $500M fund middle market). My experience is that the biggest funds that will look at you are in the $700 - $800 million range. Honestly, going bigger is tough for the simple fact that you'll likely not work on deals with super complicated structures and the majority of your modeling will be three-statement stuff and some related, rather basic crap. The LBO modeling I did in banking is laughable compared to what I'm doing now.

I've also said this many times, but realize that PE isn't some great prize. In many ways, I prefer the work I did in banking (along with the camaraderie of it.) You can feel free to PM me if you have any super specific questions.

 

I appreciate all the insight, however I would be grateful if a response was more along the lines of: Choose A/B because of such and such.

I understand that PE isn't a grand prize - I want to be in it because I think I would enjoy the line of work they're in. So factoring aside variables like the prestige of the bank, let's for argument sake assume that its not the best MM bank where MD's go to bat for their analysts but rather an okay bank that's making headway into the U.S., then what would be my best possible group placement to optimize PE recruiting.

Again, I really appreciate the sound advice you guys are giving. I'll be sure to hit some of you up with PM's with more questions =)

 

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