Just broke into IB as a lateral. How do plan my move to PE?

Quick question for you guys. I finally broke into IB (MM) as a lateral from big 4 consulting. I tried recruiting IB in the fall before I graduated (May 2020), but I was unsuccessful. I'm really excited for the career pivot. That being said I think I ultimately want to end up in PE and I know recruiting starts early. I've tried doing a bit of research on PE recruiting, but the advice out there seems more geared towards 1st yr analysts and/or ppl who are targeting MF or UMM funds. I'm pretty green to PE recruiting, but I'm pretty sure with my background (semi-target, 3.3 GPA, MM coverage group) I should be aiming for a LMM fund. I was curious what some of you guys would recommend for finding a good fund and then later securing an offer. Additionally, I'm pretty sure I would want to find a fund to specializes in energy/renewables. Should I be contacting recruiters or try the cold email game? Thanks for the help!

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Comments (15)

Jun 7, 2021 - 10:20am

The whole process is arranged by headhunters. LMM seems the most feasible, but you may have a chance with some MM funds too if you're at a strong MM in a good group. The advice towards first year analysts will be the same for you. Once you hit the desk, if your firm is okay with PE recruiting, ask an older analyst how it works. Also, you may actually be in a really good position, especially for LMM. LMM often do more strategic arrangements than larger funds and so given your consulting background that may help.

  • Analyst 2 in IB - Cov
Jun 7, 2021 - 3:21pm

Thanks for the advice! I think I'm going to keep my PE recruiting on the low since during the interview process my MD and associate kept referring to their strong A2A history and how they like to keep ppl. I guess my next question is whether or not lateraling to a BB/EB in a yr or 2 would help my chances at a MM fund? I forgot to mention that I'm coming in as an A2 so does that mean I'll only have my A2 and A3 years to recruit?

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Most Helpful
Jun 7, 2021 - 3:36pm

There's two types of recruiting: on-cycle and off-cycle. On cycle is two years in advance. So if you recruit on-cycle as a 2nd year analyst, then you'd start the summer after your third year as an analyst. So you have to make sure you're not 2 and out at your firm. On cycle happens ridiculously early, so even if you lateral after 6 months, it's past the end of on-cycle so it doesn't matter for that year. So let's say you lateral after 6 months - 1 year for an A3 position somewhere where your PE chances are better. If you're at a BB/EB then you're only downside is your GPA but everything else looks fine from what you've said. The problem is, again, on-cycle is two years in advance so you'd be an A3, need an A2A, and leave after As1. You'd probably have to keep your PE recruiting on the low, because even at PE friendly firms, they may not appreciate you taking up an associate spot if you're just going to leave after a year. I'm not even sure what PE firms would think of a 3rd year analyst recruiting. 

Then there's off cycle. You can find a few posts here about people getting UMM/MF offers in off-cycle but those seem to be the exception not the rule. Off-cycle is less structured so it's harder to plan around. You can go for off-cycle now at the MM and get an offer for the end of the year before A3. Or you could lateral to an EB and do off-cycle and get an offer for the end of your A3. From what I've seen it's primarily LMM and a handful of MM firms that operate exclusively off-cycle. And then you have some UMM/MF and MM firms that need more associates than they thought, or someone dropped, etc. and they go to off-cycle to fill those spots here and there. 

My advice would be to network with alumni at LMM and MM PE firms. If you went to a semi target there should be a decent amount of them. Be honest and ask them what they think you should do given your situation. They'll know best. If they say GPA is extremely important, then you know no matter what LMM and a few MM firms are your best bet. If they say a good group and being a top analyst trumps everything else, which is more likely to be true, then apply to solid MM firms. 

Jun 7, 2021 - 10:42am

Similar situation, currently in the process of lateraling from CF to an M&A team (delayed due to the most recent lockdown). Friend of mine did almost the exact same path as you, started in bog standard B4 consulting, managed to wrangle his way into the strategy team (UK so you are pretty much pigeon holed from the initial application) then went to a Rothschild type bank. From there he got a A2 position at one of the lower BBs and an offer for a UMM fund.

  • Analyst 2 in IB - Cov
Jun 7, 2021 - 3:24pm

how long did your friend spend (1 yr?) at the MM bank? How'd he go about the lateraling process to eventually end up at the BB?

  • Associate 3 in IB-M&A
Jun 7, 2021 - 7:33pm

Would strongly recommend against lateraling again to an EB/BB. You'd waste a lot of years as an analyst, you're not looking or honestly competitive with your GPA to do MF/UMM, and it's definitely a bit sketchy to have 3 jobs in 3 years, even if all of the moves all made sense. 

Coming in as an A2 means you'll likely be looking at processes for summer 2022. There's not really an on-cycle for LMM, so you may need to be patient and wait for opportunities as they come up. Everything is set up by headhunters (make sure to accept them all on LinkedIn/your email is on there, have gotten some surprisingly legit leads from there) but if you are interested in a specific fund or strategy you can absolutely reach out proactively too. 

  • Analyst 2 in IB - Cov
Jun 11, 2021 - 6:45pm

Curious about this as well as someone who just lateralled to coverage from ECM. Is on-cycle ONLY for 2 yrs out, or are there some places that will hire 1yr ahead for 2nd and 3rd yr analysts recruiting? If it really is only for 2 years out, then i suppose that'd mean that off-cycle recruiting is my only path and I should start immediately vs waiting for oncycle? Would appreciate any confirmation to the extent any monkeys could weigh in!

  • Intern in IB-M&A
Jun 17, 2021 - 2:05am

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