Kellogg > IB > PE or Kellogg > MBB > PE

Esteemed Apes,
I am an international who will attend Kellogg in 2021. I have a gap year right now. I have 3 years with Oilfield services major as a field engineer followed by advising a top CPG firm on automation as a tech consultant

I have a few months ahead of me and I want to break into PE in the long term. What would be the best way to approach this. I can see myself realistically breaking into IB or MBB as an associate.

How do ops role and finance role in PE compare ?

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Comments (2)

Most Helpful
Sep 29, 2020 - 4:12pm

First, try to get buy-side experience during your gap year. Most of the post-MBA PE jobs go to folks with pre-MBA investing experience. And working backwards, those with pre-MBA investing experience typically have either investment banking or management consulting experience and are going to business school to round out their skill set (i.e., an ex-MBB consultant with operational PE experience pre-MBA looking to get investment or underwriting experience during MBA, or an ex-banking analyst with investing experience looking to intern at a portco during MBA to get more operational experience). These are the typical candidates that will place into PE out of business school. That said, if your long-term goal is PE and you are not bent on getting a PE job right out of MBA, then consulting or banking are good paths each leading to different outcomes.

If you choose banking, you are likely setting yourself up for a career in investing / underwriting, capital markets or portfolio monitoring. Buy-side exit ops for associates are very different than for analysts, so much of the advice you will find on this forum won't do you much good. M&A or industry groups will teach you how to value companies, think about growth opportunities and understand risks to the business plan or cash flow predictability. This would be helpful in finding investing roles. Leveraged finance or capital markets groups will teach you how to follow markets, understand fund flow dynamics on security pricing and how to negotiate credit and equity documents. Many larger PE platforms have built their own internal capital markets groups and this would be the natural progression for you from a banking capital markets team. Restructuring would teach you more about how to mitigate disaster when things aren't going to plan. This would help prepare you for a role in workouts or distressed PE

If you choose management consulting, you will be setting yourself up for a career in operating businesses. Joining a management consulting firm will allow you to learn how to efficiently manage the cash flow cycle of a business, evaluate strategy decisions and how they will impact valuation, and build detailed revenue models and analyze cost structures. Buy-side ops for consultants / managers / principals in management consulting broadly fall into 2 categories: roll-up or turnaround. In a roll-up strategy, you would be evaluating competitive landscapes, identifying targets and trying to figure out how much costs can be pulled out of them. Then upon acquiring the business, you would be responsible for achieving those synergies that were underwritten by the investment team. These roles are typically pretty hands-on, require travel, and are filled with ex-MBB consultants. On the turnaround side, you would be more focused on evaluating cash conversion for a business, heavily managing working capital accounts, and plugging cash flow leaks while you help the investment team identify solutions like replacing management, selling divisions, raising additional capital, etc. These roles are equally hands-on, also require travel, and are filled with ex-A&M/AlixPartners/FTI types in addition to MBB and other strategy firms.

So the answer to your question depends on what you want to do. With everything said above, the large PE platform opportunities will be few and far between and will usually go to folks we pre-MBA investing experience (except for maybe capital markets groups). So you will probably be looking at middle market or family office opportunities out of your post-MBA banking or consulting job. Those opportunities don't typically post on LinkedIn or alumni career services databases, so you'll have to network your tail off, cultivate contacts from (gag) headhunters, and stay in the flow for opportunities when they arise. 

Best of luck with your process, and feel free to ping me directly if you have other questions.

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