Lateral PE Recruiting

Hey all - long time lurker, first time posting on here. Currently an associate at relatively large middle market shop finishing up my first year on its growth equity team. For context, was in banking prior to my current role.

I mostly enjoy my role, the work's interesting and most of the team's pretty nice, but hours have been incredibly busy and honestly don't think my comps up to par. Started getting some inbounds from headhunters regarding lateral roles and so have been thinking about whether I want to try hopping to a firm that's a better brand name (MF or UMM). Couple questions:

  1. Anyone who has done this - what was your rationale and how have your experienced compared between the two firms? Did you have to go to bschool after 1/2 years again?
  2. Any other associates considering doing the same thing? Seems like the market's pretty hot - have you locked down a role / what was the process like? A lot of the inbounds I've gotten are for A1 roles, which is another reason that's holding me back - obviously not trying to take a step back.

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Comments (35)

  • Associate 1 in PE - LBOs
Apr 9, 2021 - 10:39am

have been chatting through the same question with friends and we've decided it's not as attractive as it appears to move and re-do your first year essentially

especially if you're interested in doing b-school, I would imagine it could be better to just stay at your current fund and build the right relationships for those recommendations

agree with you that the MF and UMM names getting circulated around are very attractive but honestly a lot of them seem career destructive beyond the fund name...(e.g. Apollo, Warburg Industrials / Business Services, KKR healthcare who is always recruiting)

  • Associate 1 in PE - LBOs
Apr 16, 2021 - 3:43pm

Chiming in here - also in a very similar situation (going into year 2 at a MM shop; like the team but not enough for the current hours and comp). I'm a bit earlier than you are it seems in thinking through value of lateraling (my current shop also has a clear path to VP) vs. MBA, or trying to dual-track both. Any thoughts you (or others) can share on why going through the MBA process isn't as worth it would be helpful. I'm also considering an MBA to drive a career change into different stages/types of investing - are PE candidates dinged all the same regardless of plans post-MBA?

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Apr 13, 2021 - 1:04am

think it's just the workload of the group. i've heard the team gets worked pretty hard. think if your priority is just how interesting the work is and working across growth + buyout and pedigree doesn't matter (and I don't mean that judgementally), there are plenty of LMM/MM firms that have that flexible fund mandate without requiring the mba / top tier MF associate experience.

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  • Associate 3 in PE - LBOs
Apr 9, 2021 - 1:33pm

Lateraled about a year ago and went from MM (3-year associate program) to large cap (partner track).  My rationale was really to avoid b-school but I personally regret going upmarket, essentially for all of the reasons people hate MF PE.  You definitely take a step back given you have to relearn a new working style and personalities.

Recruiting process varies based on role/firm, but expect similar to on-cycle with the added focus on quarterbacking parts of the deal. 

My advice:  if you're happy enough in your seat, don't jump unless it checks ALL of your boxes (b-school placement, comp, culture, strategy, etc.) 

  • Associate 3 in PE - LBOs
Apr 10, 2021 - 11:50am

Moving back down market, either smaller fund or a portco role. To the poster above that mentioned "career destructive", I definitely feel that my lateral move jaded my view of the industry as whole and has left me feeling burnt out. 

  • Analyst 1 in IB - Gen
Apr 10, 2021 - 11:44am

Curious about your comment on b-school placement. Generally speaking, for PE associates, unless you move to a very specific fund with strong relationships, HBS/GSB are out of reach, but the rest of the M7 are very accessible. Is this generally a good way to think about b-school placement expectations for those across the MM-UMM spectrum? Guess this assumes decent stats around GMAT and GPA. 

Apr 13, 2021 - 7:02pm

That's largely correct. Other than the one Boston fund we're both thinking of, HBS/GSB ain't happening these days for PE males (and even some strong PE females have started getting dinged). It's a new game, so be careful about putting too many eggs in that basket and lateraling for the sake of what has become an incredibly nebulous "b-school placement". Personally, I'd prioritize tangible benefits such as learning experience, fit, your happiness, upwards mobility.

Apr 13, 2021 - 1:06am

thanks for the candor. what kind of MM / large cap (any sector focus / general aum size)? were you able to make that jump while still going on to the next associate level (meaning without having to repeat an associate year)? feel free to dm instead if you'd prefer to keep it more private.

from the other side of recruiting now as well, what're your thoughts on bschool - still plan on avoiding? guessing it isn't necessary anymore if you want to move downmarket

Apr 14, 2021 - 8:54pm

I'm sorry HBS/GSB "out of reach" for MF kids? What are you talking about? PE/VC is still literally the most common background of an HBS/GSB student based on their websites. Hard to get in? sure.. the acceptance rate is 6% at GSB, but with a 750 GMAT and 3.7+ GPA and MF PE on your resume you're the most likely type of accepted student. That's just math. 

Apr 14, 2021 - 9:57pm

Are you referring to the other poster? I think the 6% speaks for itself - it's getting harder and harder to apply from a PE background (or with any background at all) and get into HBS/GSB. Might be "common" in the sense that plenty of PE investors get in, but it's still a very small portion of the total applicant pool. You more or less have to have a perfect + clean resume (top undergrad, GS/MS//EB banking, MF PE) to have the best shot, which is a very small portion of total PE applicants. Obviously there are exceptions, but don't think you want to be downplaying that it's a minority of people who get in

Apr 14, 2021 - 10:51pm

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