Is BCG a viable path to Private Equity?
I'll be doing a summer internship at BCG San Francisco this summer. I'm wondering if this is a viable path towards working in private equity. My goal is to do 2 years of consulting after college and then look for an operationally focused private equity role after going to business school. Also, I'm interested in knowing how the PE exposure at the BCG SF office compares to the PE exposure at the NYC office?
Also, how do the PE exit opportunities for BCG compare to those at McKinsey or Bain? I realize that MBB consulting isn't as good a route to PE as investment banking(I don't want to do banking for various reasons, and I think I'd learn more and develop better skills doing consulting), but are the PE exit opportunities for IB really that much better than for MBB? Is it easy to pick up the financial modeling skills that are necessary for PE without doing IB?
On a slightly separate note, do large PE firms like Blackstone, KKR, and Apollo have workers that are not mostly focused on the financial 'deals', and instead are more focused on pre deal due diligence or creating operational improvements for portfolio companies?
Search around here for more info on the specifics, but the general consensus is that MBB is a decent path into PE, but it will limit you at some of the top MFs.
Certain PE funds really value the consulting experience while others prefer bankers.
Bain tends to place the best into PE given their strong PE practice, but with proper execution you could do fine from any of the MBB.
Call me the expert of banging your head against the wall trying to get into a not-totally-ass-PE fund from non-Bain and McK, and let me tell you, it will not be easy from BCG.
If you want to corroborate what I’m saying just go get a LinkedIn search going and look at absolute number and % of people who move from McK/Bain to PE vs BCG.
I'll revisit this almost three years later and say: I think there's probably more selection bias than I initially thought with respect to BCG, as I have since come to see and work with a number of successful BCG PE Associates who did not indicate a challenge any different than Bain or McK Associates in breaking in, yet still maintain that they are less common to find than Bain or McK.
N =1, but was a viable path for me at least. My fund views McK = Bain = BCG for our Associate hires..
I know BCG NY has a PE due diligence ring fence team, as does Boston. Not sure where else does, but NY and Boston were the first two, so they're probably strongest.
Could you clarify what you mean by a ring fence team?
You can look at my walkthrough for more details, but I’ll give my two cents on some of your questions here.
A Consulting guy very recently made an AMA about recruiting for PE from Consulting. You could find a lot of answers to your questions in the post.
https://www.wallstreetoasis.com/forums/ama-2nd-year-baaac-at-mbb-going-…
Loads of hardos will throw monkey shits at me but you need to realize that PE is basically Banking 2.0 So for whatever reasons you don’t want to do the IB stint, those issues will most likely pop up in PE especially at the highly institutionalised places that you’ve mentioned (I.e Apollo, BX).
Correct for larger funds but at smaller ops heavy ones it's quite different, especially if they stick you on the board of a portfolio co...
Absolute agree with you. I guess it depends on the type of fund that OP wants/will be able to join.
Yes
Agree with most of comments posted. Just give one more insight: pe shops, especially buyout firms, pay more attention to add-on buyouts, connoting the importance of operation improvement which is the exact strength of consultants.
Yes. I worked in PE and came from MBB. If you can’t get the job, it’s on you not the firm. BCG will open plenty of doors. Placement is less than Mck and Bain, but in large part that is self selection. Ask around your office I’m sure they have sent plenty of people to brand name firms over the years
Yes, MBB is a viable path to private equity. There are more private equity associate hires with a prior role as a banking analyst than an associate consultant, but it isn't a rare path. Some firms are more friendly to consultants than others; this tends to be because the firm's strategy is more operationally-focused or its founders had a background in consulting themselves.
BCG places into private equity the least out of the MBB firms. I was surprised to notice this all the way back in undergrad when assessing my internship options, as an analyst talking to peers who were recruiting for buy-side roles from both banking and consulting, and over the subsequent years as my career has unfolded.
I don't believe that's due to any kind of bias, for what it's worth. It seems to be self-selective. Bain has a very strong private equity due diligence practice, for example, and many young professionals interested in private equity as a long-term career path are able to identify that group as the place they want to start. Does that mean the same person couldn't get to private equity out of BCG? No.
What I would encourage you to do is recruit for McKinsey and Bain after finishing your internship. If you were good enough to get a BCG internship, there's no reason you aren't good enough to work at the other firms.
Don't worry about being at a disadvantage relative to interns who accepted a return offer. Consulting doesn't offer the same advantages in staffing and visibility to senior professionals the way banking does for returning interns who are going back to the same group. Consulting analyst classes have a much higher proportion of people who didn't intern there than banking analyst classes. The work is also so much more varied (in duration, geography, and composition of the team you work with) than banking. 'Goodwill' isn't the same factor like it is for a returning banking analyst.
McKinsey has what I believe to be the single most powerful alumni network globally. I used to think it was HBS. It's not, McKinsey wins. No one in the world will fail to take your email or call seriously. They may not like you, they may not do the deal with you / hire you / invite you back, but no one is going to doubt your intelligence or professional acumen such that they'd deny you a conversation.
Bain (anecdotally) had the highest volume of placement in private equity, presumably thanks largely to its strength in that practice area.
Either way, if you're optimizing for a private equity associate role, the takeaway ought to be that you can surely get there from BCG but you ought to invest the energy in the post-internship hiring process for McKinsey and Bain to improve your odds.
I am biased because I pursued the banking route over consulting. I don't think anyone that tells you consulting offers the same breadth of opportunities or probability of success in private equity recruiting as banking is correct.There are firms who literally will not hire consultants. They instruct their headhunter firm to pursue only candidates from certain groups at certain banks, filtered by certain undergraduate schools and a certain GPA threshold. It's real.
You don't have to let that dissuade you. You seem to be articulate about prioritizing consulting over banking for various personal reasons you've identified through self-reflection; that's good. Someone performing in consulting at a very high level and chasing the somewhat narrower number of opportunities in private equity available to them is going to perform better than someone in banking performing at an average level pursuing broader opportunities.
Simply know going in that certain headhunters will take the first screen conversation with you and never call you back, guys at some firms that you reach out to for a coffee chat may laugh a bit explaining that you're wasting your time there, and some senior people interviewing you through the formal headhunter process may ask very direct questions about why you chose to do consulting instead of banking.
Don't take it personally. The headhunter has a very direct set of instructions to follow; it isn't up to them. The guy that tells you not to waste your time is doing you a favor and letting you know that firm isn't a fit. The senior asking you the tough question is not trying to trip you up; they're looking for you to give a coherent answer that demonstrates some conviction, mastery of self, and energy spent studying your prospective career path.
Yes, there's a litany of guides available that even banking analysts rely on to brush up their skills. You may struggle to answer the more complicated modeling questions some firms that have a more technical interview may give you, but this is solvable through brute force. It's a function of preparation. You can teach yourself all of this. You could also choose to steer away from such firms and go for ones who only do paper LBOs (as opposed to take-home tests) and who are known to use it more as a check-the-box exercise.Apollo does not have a unit like this. Blackstone has a "PE Portfolio Operations team" ... and KKR has an entire unit called KKR Capstone. Here's an excerpt from another comment I made elsewhere:
Note that in such roles you are not part of the investment team. You are an internal resource and outside of the investment decision-making process.Good luck. It sounds like you have a strong idea of what you're interested in. That's very commendable, and the level of detail in your questions indicates you've done good research already. Keep that up and I trust you'll be able to meet all these goals and use them as a platform to pursue larger ones.
Happy new year.
Agree with most of these points, except that I don’t think BCG is disadvantaged for PE recruiting anymore. It seems to me like differences in placements are largely driven by interest (Bain in particular attracts more people who want to recruit for PE). I haven’t seen any funds snub BCG in favor of other consulting firms (but of course, some won’t consider consultants at all)
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