IB analyst vs buy side analyst role?

Hey everyone, rising senior having a bit of a career crisis:

Currently doing my SA at a solid bank, but not a top EB/BB. Trying to keep things vague because this is a pretty unique situation, but working at one of DB/RBC/Jef etc in a mediocre group.

I recently got a FT offer from a top growth equity firm as well. One of the pretty clear leaders in that industry- if you look up a list of the top 5-10 GE firms, this firm would be on that list.

Finally, have a super day coming up with a MMPE firm (latest fund size ~1B). It's a pretty solid shop with good historical returns and reasonably prestigious, but definitely not Blackstone or anything close to that tier.

Here's my dilemma- I have no clue what I want to do. This banking internship is my first finance work experience, and it kind of sucks, but it's also a virtual internship so I don't know how much it is indicative of an actual analyst stint.

Here's my current thought process- the growth equity firm is probably the best brand name and it ranks higher in its industry compared to the PE firm or IB. That being said, it's a sourcing heavy model so I'm a little nervous on missing out on some technical experience. On the other hand, past analysts have had pretty solid exits looking at LinkedIn.

The PE firm seems to have a great culture, and I think it would be a pretty good experience as an analyst. They don't have as structured of a program though, so it's harder to know where analysts end up. It's also not as big of a name brand firm.

On the IB side of things, my group places pretty well into MMPE and growth equity but analysts rarely end up in UMM/MF PE, so realistically if I did my banking analyst program I'd probably end up at a pretty similar firm to the ones I'm currently looking at. Also, worklife balance in my group is awful and comp is mediocre, so not super excited about spending two years there, having to worry about re-recruiting, and ending up at a similar place to one I have an offer too right now. Also, I feel like there's so many kids in similar positions to me from non-top groups recruiting for the same PE jobs in 2 years, whereas I at least differentiate myself a little bit by starting in PE or GE.

Anyone have experience as someone in a buy side analyst program, either in growth equity or MMPE, and later recruited upstream to a better firm? Is that possible? Am I being lazy and should just suck it up, go do banking, and give myself more time to make a career decision?

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Comments (11)

  • Associate 1 in IB-M&A
Aug 5, 2020 - 4:09pm

I'd take the "prestigious" GE offer. If exits historically have been good you have nothing to worry about. MM IB probably isn't the move here, and taking the MM PE offer right now might limit your options down the line.

  • Intern in IB-M&A
Aug 5, 2020 - 4:20pm

This was sort of my gut instinct, my only fear is that GE, especially at this firm, is really souring heavy. As far as tangible skills, I wouldn't be doing much modeling or anything compared to PE or IB. I've also heard GE can be a little bit silo-ing, as the skills you pick up are really only applicable to GE or maybe earlier stage VC. Do you think it'd be easier to go MMPE -> GE or the reverse? I think at this point I really just want to keep my options open, I'm just not sure which of these firms is the best place to do that.

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Most Helpful
Aug 11, 2020 - 12:38pm

Personally, it feels like you're sweating some smaller stuff here when you have three really good options for your initial job. I'd examine each one and think about what you would personally enjoy for 2-3 years; you can figure out your next step at that point (you don't need to decide your second job before you even accept your first job). I'd say banking sounds like it is out because seems like you'd end up in a similar spot and spend 2-3 years working shit hours for mediocre pay. For me, I care less about prestige of the place that I work (you certainly need some to raise a fund, be included in processes, etc.) so that wouldn't be a factor but to each their own. Growth equity and PE have very different models and you have to determine which one is more enjoyable for you and where you think you can succeed. I had a buddy work at Summit Partners GE and hated the sourcing component (also, note that he joined summit after being an analyst at a LMM PE shop) so you really need to decide if you like that part. Lastly, you'll have good mobility out of either place so don't sweat the next steps too much.

Aug 15, 2020 - 7:28am

Sounds like this is a Summit or GA offer or at least at that level. The sourcing stuff is love it or hate it, but those are great and competitive roles to get out of school - I would take it vs a LMM PE role or a lower quality banking role. If the brand name is as strong as you've implied, it will give you more optionality in terms of exits - maybe not quite as broad as the banking role, but higher quality for sure.

As general advice unless you're dead set on PE or working on the buy side (which is close to impossible to know at 21 years old), I think it makes more sense to start in banking. This case is specific because the differential in brand value seems quite substantial, and moving from an RBC to a top tier buy side fund later on is fairly difficult to do.

  • Intern in IB-M&A
Aug 15, 2020 - 8:39am

Great advice, thanks. Quick question regarding analyst exits from a top GE firm (GA/Summit/similar)- looks like lots go stay on as associates or move to similar other GE firms for associate, but what are other options? I know lots move to portfolio cos but that isn't as interesting to me, would it possible to move to a PE firm, either as an associate or post-MBA? Growth equity seems really interesting to me but I've never done it and if I didn't like the sourcing model, I'm worried about getting siloed. I'm just having a tough time navigating the better name brand at GE vs the optionality at banking.

  • Analyst 2 in HF - EquityHedge
Aug 15, 2020 - 9:32am

There are so many good long term opportunities in tech for someone with a finance background that I think you should take the growth equity position. You are effectively getting paid for two years to learn about so many different types of cool growing businesses. If you do the work right and internalize the learning, the possibilities for your career are endless.

Don't fall into the trap of "optionality" that banking creates when you could have an amazing experience at a growth equity firm... probably producing the same types of exits that banking provides anyway (maybe not Blackstone RE buyout) but you'll be just as competitive if not more for the roles bankers kill for.

Wouldn't focus on the sourcing heavy side of it, that's a useful skill and how lots of people cut their teeth in any industry

Aug 16, 2020 - 11:32am

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