I have heard that in banking, the learning curve is shaped as follows: you learn everything in your first 9 months as an analyst then afterwards you don't learn all that much new until you're a VP. In other words, the learning curve between month 0-9 is steep then month 10-48 is flat until you hit VP. You just get faster and more efficient at what you already know, but the learning curve for new things is largely flat.
For those in PE how would you describe the learning curve there? Of course, there's always more to learn as you move up, but I am more interested in knowing the shape of the curve.
The difference between banking and private equity is that in private equity you do not usually come in as an analyst (yes, I know there are analyst programs now). You usually come in as an associate, learn a lot in the first 6-12 months, learn less in your remaining 12-18 months, go to business school and then come back as a vice president at which point the learning curve becomes steep again.
Worth noting that pre-MBA PE associates do not usually come back as a VP after business school (if you do make it back, you'll typically be a senior associate anyway). People like to say that it's difficult to get into PE, but what's even more difficult is staying in PE. It's similar to the problem lots of law firms face - lots of eager juniors, seniors loath to leave (because it's so lucrative), and only so many slots for promotion.
Regarding the learning curve question, I'd say that part of the reason that IB has a steep initial curve but then flattens out is that all you're really doing is managing a process. It gets steeper again when you need to develop new skills to make your own book of business as a VP. In PE, you are learning to navigate the process and allocate time from the other side, but there's an added wrinkle in that you ought to be more knowledgeable about the target (than a banker running the process, for example) by the end of the process (if you make it there). So within each process, you should also be learning more each time since you're actually putting dollars down.
I'm 23 months in as a PE associate and in a lot of ways the learning curve is just as steep as it was when I started. Obviously my comfort level is high due to understanding of culture, processes, from where and who to get info, etc - but I am constantly being stretched in this job. Not only is the modeling more complex (every business is different, and you're not just plugging and chugging DCFs off street numbers), the business understanding is more complex, then when you feel you start to get those down pat you are beginning to manage lenders, accountants, lawyers, getting involved in SPA, etc...there are a lot more "levels" to ramp up on in a PE role, IMO.
If you don't mind me asking, what's your age-ish range?
Don't mind at all - I'm in my late 20s...have done the standard 2+2 thus far, I am fortunate enough to be at a firm that allows me to continue past my first two years as a PE associate.
The whole 10-48 month flat curve couldn't be further from the truth. It's actually quite funny.
Now are you going to be learning at the same clip, no, but from 0-9 you literally know nothing. However, banking isn't about plug and chug in excel. You're are thinking about things from the perspective on doing work. You need to be thinking about things from a thinking about work and creating work perspective. Any monkey can learning the hot keys, how to run a dcf, spread comps, format a deck. etc. and that is what you're describing. The real learning comes from compounding industry knowledge, truly knowing/understanding the key drivers behind the numbers you are merely cranking though, figuring out the right questions, managing a team/clients, all the soft skill, etc.
If you aren't leaning and progressing at every stage of the game you are doing it wrong.
Shape of the curve really depends on culture of where you work, in any industry. If you're somewhere that will allow you to stretch as fryguy mentioned above, then you're in a good place, working for good people.
There's definitely a lot more than just building a model and getting the analysis right in PE - it's knowing what questions to ask, managing the 3rd parties, negotiating, securing financing, etc. So there's definitely more to learn than can be done in a couple years, but I think after 5-6 years (i.e. at VP) you've "learned your craft" and are now "applying your craft".
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