Leaving MBB for MM PE career advice
I am currently an MBB consultant with plans to leave for MM PE. As I think more and more about leaving, I am getting more nervous about the move. Maybe I am just too risk averse but would love if any fellow monkeys made the leap and how they felt about PE vs. MBB consulting and whether any of you decided to ultimately go back to consulting and why. Would love to get any advice here to make a well educated career decision.
dontbugme, bummer your thread hasn't had a response yet. Maybe one of these threads could point you in the right direction:
Calling relevant professionals! @TKPG" ranmo78 Joshmmay
If those topics were completely useless, don't blame me, blame my programmers...
I’m in MM PE now. MM PE varies very very very widely - you have incredible funds and really dysfunctional funds. There are definitely a lot of funds that are worse than MBB (in terms of pay, type of work, caliber of people, etc) You really have to do deep diligence before you join.
Super helpful! I’m assuming you’d look at standard metrics I.e. associate class, returns, AUM, reputation and assume if it’s well regarded it is okay? Or even among the well known places are there dysfunctional funds?
Often times returns are not disclosed. It’s not easy to always figure out as they are unlikely to share if things are not going well. You have to ask thoughtfully worded questions, perhaps even ask to read the quarterly reports etc if you are far along in the process (and be willing to sign an NDA). Plenty of Harvard mbas who seem amazing but may not actually have much deal flow. You have to talk to others in the industry who know the firm. Ask who their LPs are. Any exits? Projected next Fund size. Be weary of pie in the sky strategies - for example a lot of “sustainable social impact” private equity firms seem cool, but what does that even mean? Often times it’s BS and just a marketing strategy to raise money. Goal is to fully understand how they make money and get in the weeds on whether the strategy works.
On the other hand, I wouldn't dismiss a social impact fund because it seems like just a marketing strategy. Oftentimes, impact funds have real and differentiated strategies that target companies that other investors wouldn't look at.
For example, DBL Partners made a huge return by being one of the first investors in Tesla, a company that struggled to find funding in the early days as a heavy capex business during the software/internet era and before the concept of electric vehicles was mainstream.
In the same way, there aren't many investors who will look at rural villages in Africa / Southeast Asia as a potential source of good returns - but plenty of solar companies like d.light, Off-Grid Electric, and M-Kopa have grown immensely with the help of impact funds, while bringing electricity to rural villagers and meaningfully improving their lives (rural hospitals can run, kids can study at night, food can be refrigerated, etc).
Another differentiated impact investing strategy can include partnering portfolio companies with nonprofits, foundations, and governments. For example, you can imagine a situation where the Kenyan government funds the company's entry into the country in order to help rural villagers, a nonprofit works on-the-ground to help distribute the product, and a foundation provides grant money to expand the program.
Interesting. Thanks for sharing. Though if you look at the research, the majority of impact investing funds have not performed well. Many LPs think it is could be red flag when they hear it. But nice to hear about the exceptions.
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