Is it possible: Big 4 Valuation to Tier 1 PE?

Hi guys, I would like to ask about your thoughts/comments/suggestions regarding the path from big 4 valuation roles to tier 1 private equity firms. The valuation role at big 4 is mainly for securities like derivatives, bonds etc.

If not possible, do you have any idea on how valuation people can get into pe firms?

thank you!

 
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Speaking as a former auditor at a Big 4, this is going to be exceptionally difficult, I would personally say verging on impossible. You will have to be very aggressive and creating in your networking, and I would strongly urge taking any investing role you can secure, since generally speaking, with few exceptions, Big 4 roles don’t always tend to be looked well upon in terms of experience, but of course YMMV depending on the work in question and how you spin it, which is very important. I wish someone had told me this earlier in my career. Godspeed.

 

Valuation is, perhaps counterintuitively, pretty unrelated to what most sellside / buyside jobs do - Big 4 roles aren’t a great comp in general (with some exceptions for Corporate Finance and Strategy Consulting leading to the LMM), but even then FDD is marginally more useful than BVal.

A jump to PE might be available if you work hard and get lucky, but “Tier 1” PE as you put it is all but impossible. The CFA is a terrible choice as well - it won’t hurt you, but it’s more or less entirely unrelated to what you do in PE (speaking from experience, I passed two levels but decided to skip the third after starting a PE job).

I sincerely encourage you to lateral to banking if you’re deadset on private equity at a large firm. It’s still not a high probability shot, but it would increase your odds dramatically. Alternatively, if you can get “Tier 1” out of your mind, you can probably find some LMM funds, independent sponsors, or maybe family offices who would be much more receptive to an alternative background if you can manage training and prep on your own ahead of time

 

If what you want to do is valuation and not be on the investment team, then yes Big 4 is a very good pathway. If you do a very quick google search at the top MF you will see that a lot of their valuation groups are built out of former Big4 professionals

(1) Thomas Vinciguerra | LinkedIn

(1) Da Chen | LinkedIn

(1) Joseph B. | LinkedIn

etc.

IF you want to be on the deal team. You need to go do investment banking, as an analyst is where you will most likely get in, at a BB (GS, MS, JPM etc.) or EB (EVR, PJT, LAZ etc.)

 

Thank you iridescent007 for your insights! Unfortunately I am not in infra advisory. My current role is mainly to value bonds/derivatives etc for financial reporting purposes. Do you still think it would be much more difficult for me to get into PE? Besides, do you have any idea about doing valuation in PE firms regarding career development/pay etc compared with investment/deals in PE firms? Thank you again!

 

With all due respect, infra advisory is nothing like BVal. Big 4 Valuations teams are largely doing work for purchase price allocations, other tax valuations, and, if you’re lucky, fairness opinions.
 

And again, no one’s saying they can’t end up in PE, but Valuation to “Tier 1” private equity (which is a crapshoot even if you’re in their recruiting pipelines) is extraordinarily unlikely

 

I made this switch last year post MBA, but don't know anyone else who did. Some steps that may help you:

1. Try to get into private valuation asap. That way you atleast get to see what's happening in markets, how do fund managers think and even build industry expertise. If you can talk about an investment thesis cohorently, chances increase a lot.

2. Try to lateral into investment banking asap. Dont be hung up on tier 1/2/3 - deal experience is a must.

3. Take any investing role you find, no  matter how small the fund. It might not pay much etc. but investing is investing. You can start to aim for Tier 1 funds by developing your USP in terms of network/ industry knowledge etc. 

All said and done it's a very hard move and you'll have to convince someone to take a bet on you. I kind of twisted my val experience a bit to talk more where we were directly involved in transactions and left out reporting part unless it was for well known PE funds. Worked out decently well.

Good luck!

Array
 

I'm from India (so none of this will probably be relevant but since you asked) - undergrad in finance plus CFA I did right after uni (mostly cuz I was bored and wanted to study). I started looking for pre MBA internships right after I got my MBA offer (Tier 1 intl school) and landed one with a small seed fintech VC with literally sustenance stipend. Used that to get to know lots of entrepreneurs in the region (this was a new geography and I had to learn a lot). Did a bunch of market mappings and got a good understanding of ecosystem, major companies, business models etc. I picked up another internship while pursuing my MBA (almost killed me) which wasn't as useful but again got to look at a med device asset and did some work on transaction docs. Majorly helped me talk about the process. I networked like crazy, reaching out to every MBA school alum I could, asking for advice, sharing my views on some common topics, learnt to ask good questions  Finally summer was with a nice branded fund because I knew india market and somehow interviewer thought I could hustle. Once I had this on my resume I could land interviews with 2-3 big PE funds ( couldn't convert due to multiple reasons) but I consider being in the room pretty successful given my background. Eventually landed with a role in London with a DFI (think ifc/ebrd etc.). I've never aimed for a tier 1 (and it remains tough) but am happy with the work I do (exactly matches my interest of impact plus growth plus EM).

Array
 

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