How to move from MBB to PE

Can anyone comment on the best way to transition from MBB (analyst level) to PE? I'm joining an MBB office in the fall and understand that PE recruiting generally happens very quickly after that (April/May). Would it be useful to learn/practice some financial modeling before I start work so I can even be considered for interviews? Anything I should be doing well in advance to prepare?

Any advice or experience is helpful, thanks.

Comments (46)

Feb 22, 2012

It depends on which MBB you're at. In terms of PE recruiting, Mck>Bain>BCG. BCG guys can (and do) make it, but for the sake of our sanity, let's assume that you're at McK/Bain. Your best bet among Mega-Funds is obviously Bain Capital. For technicals, pretend that you're an M&A Banker, and learn accordingly. But don't fall into rote memorization, make sure to understand exactly why something happens in a model. Get into the nitty gritty of it all. But from my experience, if you're doing it right, technicals should be the least of your worries. Behavioral/fit is by far, the most important part.

Read CompBanker and 10xleverage's threads for more info.

Feb 22, 2012

On a related note, how common is it to move from an associate (post MBA) role at Bain/McK to PE? If it does, how long past the MBA does it typically occur?

Feb 24, 2012

this question must get asked 100000 times, but again, going into PE post-MBA without prior PE experience is EXTREMELY EXTREMELY difficult. it's an uphill battle you dont want to be a part of. currently, it's hard enough for a pre-mba pe guy to get a job in pe post-mba. its that competitive.

Feb 28, 2012
  1. Best way to transition: use headhunters. All the top PE funds use headhunting firms for their pre-MBA associate positions. Top headhunting firms include CPI, McKibben, Oxbridge, SG Partners, Amity Search Partners, Henkel Search Partners, and Stephen James Associates.
  2. Timing: send the headhunters your resume 6 months after beginning work (so Dec/Jan timeframe). Recruiting seems to be getting earlier and earlier each year (although this year the big funds have agreed to wait until late summer / early fall ... we'll see if that really happens). Recruiting will likely take place in April/May (so like 9 months after you started working).
  3. Preparation: depends on the funds to which you plan to apply. If you plan to focus on funds that have a history of hiring MBB consultants (Bain Cap, Berkshire, Advent, Charlesbank, American, etc.), you probably won't need to have as much financial modeling expertise as with some other firms better known for hiring bankers (KKR, TPG, Apax, Carlyle, etc.). The key is to earn excellent ratings at your MBB. The PE firms use MBB as a screening tool for their candidates - if you can perform at a high level at MBB, they assume you must be intelligent and capable of being a PE associate. Also, make sure to do a few engagements where you own the model (in consulting, models are typically operating models, versus LBO models in PE, but that should be fine for interviews). Caveat: if you do plan to apply to KKR, TPG, etc., you'll need to know how to pass the LBO modeling test you're likely to get in the interview process.
  4. Before you start, think about the type of PE firm you want to join. There are pros/cons to megafunds versus mid-market, generalist versus industry-focused structures, NYC versus Boston versus San Fran, etc. Unlike consulting, where there are a very small number of top firms, there are literally dozens of great PE firms. So you'll need to triage in advance based on your preferences.

Btw, ledger123 is right. Getting in post-MBA w/o prior experience is essentially impossible. Maybe doable at a tiny fund where you've networked your way in, but that's about it.

Feb 28, 2012

Check out Golden Gate Capital.

I've been told that TPG has taken McKs before.

Feb 28, 2012

in addition to Golden Gate almost exclusively hires consultants and is obviously a top notch mega-fund fund

Feb 28, 2012

Thanks. I did know about those two but I was wondering more generally if most firms are open to hiring consultants or if they simply cannot because they do not want to train them modeling skills, and also specifically which of the mega funds other than Bain Cap would do so (e.g. TPG, Blackstone, THLee, Warburg Pincus, etc.).

Feb 28, 2012

Several of the better middle market firms hire consultants. In addition to Golden Gate, Berkshire, AEA, and Charles Bank all regularly hire consultants, mostly from Bain. The other megafunds are also beginning to move in that direction. Blackstone hired someone from McKinsey last year and TPG had an interview round that was only consultants.

Feb 28, 2012

I don't have personal experience here but I've heard that more the PE firms are taking more bankers lately because of the ever-increasing complexity of financial transactions and strategies.

Feb 28, 2012

If you're with Bain, try to work to do a PEG rotation.

If you're with McKinsey, try to join their corp fin group.

I'm not sure about BCG.

Feb 28, 2012
  1. yes, but very difficult. you should be looking to apply at all points given how difficult it is. aka always be networking, interviewing, etc.
  2. yes, banking will greatly increase your chances. so will starting your own co. leave as soon as you find a job that will teach you move and put you in a better position for growth equity. i.e. technology banking, established start up companies, or smaller companies.

look up every firm in private equity and look at their associates. if they have hired an associate with consulting backgound, it means they will consider you. example: golden gate and huntsman gay

Feb 28, 2012

Bump. Anybody else who has had experience with this?

Feb 28, 2012

.

Feb 28, 2012

How about coming out of 1 or 2 years at Bain or somewhere else doing PE consulting? This should obviously make your chances better, but realistic actually is it?

Feb 28, 2012

I am interested to hear the answer to this as well

Feb 28, 2012

What do you consider "good"?

I think it would make sense to switch to a MM PE fund and THEN get your MBA.

Feb 28, 2012

It's very difficult--there are a limited number of funds that hire consultants, and they pretty much all can draw just from MBB.

But for general tips off the top of my head:
--Network, and in particular be proactive in reaching out to headhunters
--Try to get on relevant cases where possible (e.g. DD work)
--Honestly, target smaller/less regarded funds to some extent. It's kind of harsh, but you have almost no chance of ending up at a Bain Cap or Berkshire-type place. Those guys can already skim off the top 10% of MBB analysts (and do). Consider focusing on someplace else (something like Lee Equity or maybe Charlesbank comes to mind as examples, but I'm not as familiar with that chunk of the market)

Lastly, undergrad pedigree/etc can help to some degree. Recruiters do sort for things like undergrad, GPA, SAT scores, so you'll be better off if those are strong.

Feb 28, 2012

Oh, and definitely get PE experience before getting your MBA.

Feb 28, 2012

agreed, it will be very difficult to make this move. I can imagine that for some smaller funds they may consider you but most large cap PE and respected MM PE funds will solely look at MBB if outside of banking. Nothing is impossible so a solid network will give you a good head start and can open doors. Contact headhutners in the MM space and yes def get PE experience before an MBA

Feb 28, 2012

Dude, with a PhD in math/physics etc. from Princeton, you should be aiming for the top quant hedge funds. You'll get a job no problem if you market yourself well and network.

Try www.quantfinancejobs.com. Get in touch with some good headhunters to look for you too.

Feb 28, 2012

A: wrong forum
B: very hard to do so unless you are MBB and even then its harder than coming from the lower boutique banks unless its a bain friendly pe shop like that one PE firm around here. Same stuff as everyone else, you network and talk to headhunters and pray. If you aren't MBB just don't bother.

Feb 28, 2012

Hey bark,

I'm only a sophomore and don't have an incredible amount of knowledge in the finance industry but I networked with alumni from my institution (non-target) and he went from Arthur Anderson Consulting to Bain <abbr title="private equity">PE</abbr>. Obviously this is an outlier but its doable if you have the right connections. After Bain Private Equity he moved on to an MD role at a mid market <abbr title="private equity">PE</abbr> where i will be fortunate enough to do a coop this semester. Good luck and happy new years.

Feb 28, 2012

-

Reality hits you hard, bro...

Feb 28, 2012

This has been covered in excruciating detail - do a search.

Feb 28, 2012

Not that hard

Some PE partners were Consulting partners. Lots of my frends who did consulting in the corporate finance groups at McKinsey and Bain now do PE - all depends on experience

Feb 28, 2012

Depends on your consulting firm, your region and the PE house.

  1. Region: Much easier in Asia, more challenging in US. Not sure about Europe.
  2. Consulting Firm: MBB will very much preferred. Any other consulting firm will have a much tougher time. Mgmt consulting is almost a must. Forget about tech consulting firms such as Accenture.
  3. PE House: PEHs such as Bain Capital and Audax like consultants a lot. Majority of the well-known PEHs will prefer bankers though.
Feb 28, 2012

In Europe it's actually easy coming from McKinsey and Bain and ok if from BCG or a good non-MBB firm. This is for consultant friendly firms though, and the mega funds seem to prefer bankers indeed. It's definitely impossible coming from IT or process consulting, and while I personally don't know of any Accenture people in PE for example, I could imagine consultants from their strategy practice making the move.

Feb 28, 2012

I see, thanks guys.

I was actually just wondering about the application process in general. After having done a very centralized job application process through University Career Services, I want to know how it works once you are actually in the workforce.
I know I may sound like a retard, I just don't really know how the whole thing works

Feb 28, 2012

you usually have a contact at a PE firm, especially if you work at MBB, and you forward your credentials to him/her, who then works with HR to decide on all applicants in determining who gets an interview

Feb 28, 2012

Nope, at MBB they install a mind-control chip that makes it impossible to learn modeling.

Feb 28, 2012

new mountain
bain cap has a nyc office

Feb 28, 2012

Thanks - any others? I'm under the impression that Bain Cap's NY office is small and doesn't usually hire associates.

If I'm looking to stay in New York, what other possibilities are there? How much would I be limiting myself if I made geography a primary criterion in the search?

Feb 28, 2012

You should go for a mixture really. Getting due diligence experience is obviously great but also try to add some 'portfolio' work i.e. restructuring, normal growth strategy projects, etc. You should ensure to cover many different industries also, avoid getting pigeonholed early (which isn't always easy given the staffing dynamics in consulting if you're not careful).

Feb 28, 2012
m2:

You should go for a mixture really. Getting due diligence experience is obviously great but also try to add some 'portfolio' work i.e. restructuring, normal growth strategy projects, etc. You should ensure to cover many different industries also, avoid getting pigeonholed early (which isn't always easy given the staffing dynamics in consulting if you're not careful).

That definitely makes sense. Any other opinions?