Incoming Analyst - Potential 3rd Year - PE Recruiting

I'm a college senior at an Ivy skating through the end of my senior year, awaiting the upcoming summer where I will begin as an Analyst in a top BB Group (think GS TMT, GS HC/CR, GS FIG, MS Menlo, MS M&A). I've been thinking about my options as far as the next couple years, and with the group I'm working in, there are options to work internationally, potentially for a 3rd year as an analyst in a good European group within the European branch of the firm. I would really like to spend a year abroad, as I studied abroad in an intensive program during school and really enjoyed it, and I think work experience in a different country would be awesome. However, I have a few questions for those of you who have either stayed a 3rd year or considered the option.

1) I know most PE recruiting is done in January/February for 1st year analysts. If I am still in the regularly traditional PE/HF track, but I plan on doing a third year in Europe, would I then do PE/HF recruiting during January/February of my 2nd year? How do headhunters feel about this?

2) The group that I'm in traditionally has success at Megafunds and Top MM PE shops. What do MFs and MM shops think about 3rd years, and are they willing to interview/hire those staying for an extra year?

3) What are the potential downsides to staying a third year, other than delaying money and pushing business school back another year?

Any other thoughts or comments relating to the process would be very appreciated! I look forward to reading your responses.


Comments (16)

Mar 31, 2016

Also curious about this - it's an opportunity I'd also love to take advantage of as an analyst. Hopefully people shed good insights.

    • 1
Apr 1, 2016

same im curious about this as well

Apr 1, 2016

I have no idea how most PE firms will view what you're looking to do.

But I would say at least from the bank's perspective, they typically don't do one-year international rotations for 3rd year analysts, unless the analyst has the intentions of coming back as an Associate. I think it may be hard for you to convince the bank that you have full intentions of coming back as an Associate and recruit for PE without being noticed. Doesn't directly answer your question but just something to think about.

Apr 2, 2016

This is completely false. Provided you are a good analyst, you can completely do a third year international rotation. Again this based on experience that people I know, but I think this should be applicable to most banks that are open with their analysts recruiting for buyside roles (so basically all BBs except GS).

Apr 2, 2016

Banks like third year analysts because they are cheap, experienced labor.

Potential downsides? Come back after your first year in banking and tell us you still want to stay for two more years and we can talk.

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Best Response
Apr 2, 2016

This is easily doable and nothing uncommon. If you are for sure that you want to do three years in banking, go ahead and sit out recruiting the first year. During the second year, recruit exactly like you would've as a first-year. When anyone asks why you're recruiting now, you can mention truthfully that you completely sat out the process because you knew going in you wanted to really develop your skill-set, not rush your next career step, and were heart-set on getting international experience and knew your only option would be the third-year rotation.

I knew people in three of those five groups you mentioned who intentionally did a third-year and recruited as second-years. Only one went for the international rotation.

If you're in a group that strong, a headhunter is still going to talk to you, and as long as your story checks out (you aren't nervous about it or giving any impressions that you're hiding something), they're actually more likely to put you in front of their clients because you're probably going to perform better than the first-years and thus have a better chance of getting them (the recruiter) paid.

Again, I knew people who took this approach going in. Each placed into a megafund.

    • 2
Apr 3, 2016

Hey guys, thank you so much for the responses so far. I really appreciate it. I look forward to hearing back from more people as well.

@APAE, from your experience knowing people in these five groups, did they generally do the 3 years IBD (2 years + 1 transfer) + PE for 2 years then business school? If so, how much success did they have in B-school admissions at GSB/HBS. With a strong undergrad background in addition to a great group and a solid GMAT, I'd love to position myself to hopefully get into one of those two. My concerns are 1) five years out is a long time from what I've heard and 2) B-schools are less and less interested in Finance/PE every year, and I want to position myself well.

Thanks again for all the responses. They have been great.

Apr 3, 2016

Each got into H/S. You're right to say that finance isn't the flavor-of-the-year in the M7 admissions game, but I'd point out two things.

First, what's to say that five years from now when you're hypothetically applying, there won't have been a resurgence and finance is enjoying another moment in the limelight? Second, regardless of the cyclicality of what's hot in the eyes of the adcom, the guy who went from an Ivy undergrad to MS M&A to Carlyle (Carlyle loves MS M&A and CRG) is never going to not get into H/S. That bulletproof of a resume is rare and always gets one of the finance seats the adcom has carved out for that year's class, regardless of how many get allocated to that industry.

Apr 5, 2016

Finance is still one of the top hiring industries from MBA programs. You don't send a bunch of your students to big banks and not return the favor by not letting their candidates into the program. One hand washes the other. Same applies to consulting.

Apr 4, 2016

5 years is not that far out. You're not going to be looked at as "old".

Apr 5, 2016

I'd focus on performing well as new analyst first, worry about your 3rd year / PE recruiting later.

    • 1
Apr 5, 2016

Can anyone shed some light on how this situation would be different for someone coming from a non-Ivy? Would PE recruiting and MBA admissions be more challenging? I know for PE recruiting, it will largely come down to deal experience, but does the undergrad program play a role as well?

Apr 5, 2016

Can anyone shed some light on how this situation would be different for someone coming from a non-Ivy? Would PE recruiting and MBA admissions be more challenging? I know for PE recruiting, it will largely come down to deal experience, but does the undergrad program play a role as well?

Yes it plays a role in that it is part of your overall package. All else equal, coming from a more prestigious school makes you seem like a more attractive candidate. That being said, it isn't as important as the quality of your deal experience. I've seen people from total non-targets get into top PE shops (including megafunds). Of course they were very stellar candidates with top marks in undergrad and they ended up being top-bucket analysts.

Apr 22, 2016

It can really depend. Some funds may have a proclivity for candidates who come from a certain group of schools, or one in particular (e.g. look at bio's for some of the energy PE funds in Houston..all UT Austin).

Generally however, if you're a strong performer from a respectable IBD group, have some headline grabbing deals under your belt and have a real strong showing at your interviews / case study you can get past the Ivy thing.

Apr 5, 2016

Just make sure you put in big bold letters at the top of your resume 2016 GRAD IVY, you will get in anywhere!

May 7, 2016