Recently received an offer for McKinsey full time. My long term career goal is to go into PE. Given this, which practice (private equity vs strategy&corp fin) would lead to better PE exits (or if there is no meaningful difference between the two)? I understand that traditionally corporate finance has the best exits for PE and PE practice is quite new at McKinsey so hoping someone with insights can help out
Thanks in advance
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You can pick your practice group for those now? Is this for undergrad? I thought choosing for new hires was limited currently to Digital/BTO, Ops, Implementation and Solutions/New Ventures
i could be wrong but pretty sure you come in as a generalist and network around for roles in various groups/service lines
you'll be fine recruiting for PE, just try to get on a due diligence project sometime in your first couple years
Assuming you are coming out of MBA or Undergrad, you come in as a Generalist unless you are in Digital or Marketing & Sales. At McKinsey, you can optimize on 4 things for each study and will generally get your pick: industry, location, people, or function. Especially after your first year and assuming you are high-performing, you are basically guaranteed whichever study you are interested in. For PE recruiting, I would recommend working a lot of due dilligence studies when you can.
Source: I work at the firm
I worked as a summer BA and now have my pick for the group to join as a full time. I understand that this is extremely flexible given that you typically do 50% of your work in your practice and that number can range from 0 to 100 per your preference.
Since most of you mentioned that DD projects are important for PE recruiting - is it safe to assume PE practice will be more suitable given that almost all of their projects are on commercial DD?
Thanks again
I didn't work at McKinsey, so I can't necessarily speak for the firm in what would be best for your career. I would say that my overall philosophy is that you should get as broad of a consulting experience as possible, and from my understanding of the Strategy & Corporate Finance practice, that might be a better place to get that type of learning.
My view is that you can learn the necessities of due diligence in 2-3 DD's, but the art of strategy - and applying corporate finance rigorously to that art - is far more difficult yet far more valuable in the long run.
bump
No meaningful difference, but if you go S&CF do a couple DDs and you will be fine.
Source: have worked in both groups
Thanks AriZGold , Reputation wise - how do the two groups differ internally within the firm? (people they attract (both junior&senior), culture, etc)?
Thanks again
Overlap across the two groups. There isn't really a strong sense of internal reputations in terms of prestige / talent, other than both groups are more comfortable with longer hours than say org or marketing & sales.
Its not a cutthroat whose group is best kind of firm - more like oh cool here is somebody who enjoys / does something well that is different from me and let me work with / learn from them.
I would suggest trying to get into the PE practice. When PE firms are looking to recruit consultants I would think they would want people who understand how businesses operate. Hence DD's are the way to go.
For the more higher level/commercial I would assume they would go with Investment Banks instead? I could be wrong here.
You learn the higher level commercial stuff through DDs, not how the business operates. DDs will answer questions like - how do the target’s customers view the company? - how does the target differentiate from its competitors? Are the customers rewarding that differentiation? - what does the M&A landscape look like in this industry? Is M&A a viable path for growth? -what other growth opportunities exist for this company? - is the industry the target is in growing or shrinking? - how cyclical is the industry? - etc.
These are all high level questions that are critical to an investment thesis. That’s why the consultants who jump ship to PE are well versed in DDs.... that said, IB > all for PE exits.
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