McKinsey or Bain to Private Equity

FPM31's picture
Rank: Baboon | 135

Hi all, I'm an undergrad who will be interning at Bain this summer, but am being pushed by a friend I developed during the recruiting process at McKinsey to reapply to McKinsey in the fall.

With that in mind, I have two questions:

1) Which firm, Bain or McKinsey, places better into PE? Searching through various threads on this forum, it seems like Bain has a better exit into some of the firms that hire mostly consultants (Bain Capital, Golden Gate Capital) while McKinsey still places into those firms but also the occasional person into KKR, TPG, etc. Is this accurate? Which would you choose if you wanted PE exits?

2) Within people that work at M/B/B, what makes an individual applicant more competitive for PE recruiting? Is it being located in New York? Is it being on a lot of corporate finance/PE due diligence work? Is it having worked in finance in previous internships? It seems like people have very similar experiences at the entry level, and I just want to get a sense of what things I can do to make me more competitive for PE recruiting (if I decide to go down that path) as a entry-level hire.

Management Consulting to Private Equity

You are more likely to end up in middle market private equity firm from McKinsey or Bain. As your career progresses it will be more difficult to switch to private equity. This is especially true for post-MBA associates. Your odds of making the switch to private equity decrease significantly at that point. That is because the candidates applying to similar positions will have more experience.

D M - Real Estate Associate:

1) It's a lot harder to break into PE from MBB than BB IB
2) It's a lot harder to break into PE post-MBA with no pre-MBA experience


It is more probable to make the transition to private equity as a pre - MBA associate.

how to get into private equity from consulting

Certified user @DagwoodDeluxe, a private equity associate, wrote the following short guide. The original has been formatted and edited for this post

Top tier management consulting firms do not necessarily offer the most straightforward rout to private equity firms. Before you start, think about the type of PE firm you want to join. There are pros/cons to megafunds versus mid-market, generalist versus industry-focused structures, NYC versus Boston versus San Fran, etc. Unlike consulting, where there are a very small number of top firms, there are literally dozens of great PE firms. So you'll need to triage in advance based on your preferences. Here is a list of middle market private equity firms that are considered "consultant friendly." These are firms that have have historically hired consultants.

Consultant Friendly PE Firms

  • Bain Capital
  • Charlesbank
  • HGGC
  • Golden Gate Capital
  • Altamont Capital
  • Advent International
  • FFL Partners
  • Audax Group
  • New Mountain Capital
  • Sycamore Capital
  • HIG
  • Berkshire Partners
  • Sorenson Capital

Private Equity HeadHunters

The best way to transition is to use headhunters. All of the top PE funds use headhunting firms for their pre-MBA associate positions.

Top headhunting firms include:

  • CPI
  • Mckibben
  • Oxbridge
  • SG Partners
  • Amity Search Partners
  • Henkel Search Partners
  • Stephen James Associates

Timing of Headhunting Process

Send the headhunters your resume six months after beginning work (so Dec/Jan timeframe). Recruiting seems to be getting earlier and earlier each year. Although, this year the big funds have agreed to wait until late summer / early fall. Recruiting will likely take place in April/May so about nine months after you start working.

Preparation for Private Equity Interviews

This depends on the funds to which you plan to apply. If you plan to focus on funds that have a history of hiring MBB consultants then you probably won't need to have as much financial modeling expertise. On the other hand, firms better known for hiring bankers (KKR, TPG, Apax, Carlyle, etc.) will require more financial modeling expertise.

The key is to earn excellent ratings at your MBB. The PE firms use MBB as a screening tool for their candidates. If you can perform at a high level at MBB, they assume you must be intelligent and capable of being a PE associate. Also, make sure to do a few engagements where you own the model in consulting, models are typically operating models, versus LBO models in PE, but that should be fine for interviews.

Caveat: if you do plan to apply to KKR, TPG, etc., you'll need to know how to pass the LBO modeling test you're likely to get in the interview process.

Read More About Consulting and PE on WSO

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Comments (18)

Mar 8, 2013

I think the first step is to actually do your internship and figure out if consulting is a good fit for you. Asking advice from people on a message board is going to give you much less accurate data than asking people who actually work at Bain.

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Mar 5, 2017
NorthSider:

I think the first step is to actually do your internship and figure out if consulting is a good fit for you. Asking advice from people on a message board is going to give you much less accurate data than asking people who actually work at Bain.

Yeah man, great question to ask your coworkers if you want a return offer. Solid advice.

The internet provides a medium through which you can ask those awkward questions. Given that quite a few people on this website have made the jump from consulting to PE (including myself), I see no issue with OP asking the question here.

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Mar 8, 2013
FPM31:

Hi all, I'm an undergrad who will be interning at Bain this summer, but am being pushed by a friend I developed during the recruiting process at McKinsey to reapply to McKinsey in the fall.

With that in mind, I have two questions:

1) Which firm, Bain or McKinsey, places better into PE? Searching through various threads on this forum, it seems like Bain has a better exit into some of the firms that hire mostly consultants (Bain Capital, Golden Gate Capital) while McKinsey still places into those firms but also the occasional person into KKR, TPG, etc. Is this accurate? Which would you choose if you wanted PE exits?

2) Within people that work at M/B/B, what makes an individual applicant more competitive for PE recruiting? Is it being located in New York? Is it being on a lot of corporate finance/PE due diligence work? Is it having worked in finance in previous internships? It seems like people have very similar experiences at the entry level, and I just want to get a sense of what things I can do to make me more competitive for PE recruiting (if I decide to go down that path) as a entry-level hire.

I have made the transition you describe from one of those two firms.

1) On the question of which firm has a higher hit rate in terms of placing analysts into P/E roles, I would probably argue it is about the same. Whether alums or current employees of a top 3 consulting firm will admit it or not, they are basically the same talent pool. You point out Golden Gate as a top destination for Bain alums and this may be true - but I also know McKinsey alums who have worked at Bain (and others who have gotten offers from Golden Gate). The truth is that both firms will get you access (via recruiters) to interviews with all of the consulting-friendly private equity companies. It will be your job to execute the interview process.

2) New York helps. Corporate finance experience - on the job, as an area of focus at undergrad, or through PE due diligence projects as you mention - is important but not absolutely necessary. Previous internships will likely help. I would propose that p/e shops that are friendly towards interviewing consultants are also generally understanding that what they are recruiting is not someone who will immediately have the modeling or CF skills of a BB banker but who brings a more versatile skill set (wider industry knowledge, operational exposure, softer skills, etc.), who can also learn how to model. It would be a misuse of the consulting experience to focus completely on positioning for a P/E exit - otherwise you should probably just consider banking.

But I think you touch on the key points.

Mar 8, 2013

Don't listen to your friend just yet. You have a Bain offer, see what you think of the culture and consulting in general before thinking this far down the road.

In terms of being an attractive candidate, the #1 thing is being at the top of your class. Headhunters will ask for your reviews. Doing growth strategies, cost cutting, merger integration are all helpful. I have never done a DD or M&A case, and PE recruiting worked out okay for me.

Mar 8, 2013

If you are top, you can move from both. If you aren't McK might be a slightly better platform with NYC CF, but still an uphill battle. Decide based on people/projects/partners, not PE exits. GIven you will have a lot more info about Bain after the summer, no reason not to stay there if you like it.

Mar 8, 2013

if you are trying to do PE why are you not doing banking?

Mar 9, 2013

It's a good question; I actually had an offer from a GS/MS/JPM bank that I turned down for Bain. To be honest, it's an area that I'm interested in, but not something I was ready to commit to fully yet; I felt like unless I was 100% sure I wanted the finance exits, I would be better served by Bain and its, IMO, better learning opportunities/business school options/wider variety of exit opps. Since PE is still a viable exit for me, though, I'd like to know whatever I can about breaking in from MBB. Hope that makes sense!

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Mar 9, 2013

Made the switch from Bain to a large PE fund.

1) There's no explicit difference between the firms. In my experience, funds/headhunters treat both as part of the same "consultant" pool. As others have said, being a top performer wherever you are is far more important.

That said, I do think there's an indirect benefit (if you're a top performer) of being at Bain, in that the PEG partners have pretty close relationships with many PE guys. There were instances where funds I was interviewing with called up Bain partners I'd worked for (independent of references I provided), and I think that their comments carried a lot of weight and helped push me over the top for offers at least once. I've also heard of instances where partners have helped ACs get PE interviews, though I never took advantage of that. These are small things, though, and your mileage may vary. Getting an offer is very achievable from either place.

2) As stated, being a top performer is huge. Headhunters and interviewers will ask about your reviews. I don't think that being in NY specifically matters that much, though you do benefit from being in a more well-regarded office (i.e. Boston/NYC/SF/maybe Chicago, as opposed to Dallas or Detroit or something). Can't comment for McK, though if you're at Bain I think doing a PEG rotation helps, both in terms of looking good on paper and making you better in the interviews/during the case studies.

Mar 9, 2013

no for a fact that McK's was recruiting specifically for their PE team...

Mar 9, 2013

At Bain you would be hired as a generalist. Once you're hired you could ask to be put in the PE ringfence. Usually it's for 6 month but could be longer if you like it very much and are valued by your supervisors. But I think you're misunderstanding what a PE group at a consulting company does. Consultants at PE group are usually involved at the acquisition stage of the deal when the PE fund wants to find out more about the target and its industry. Operational improvements are done as standard projects by generalists, not by the PE group. So if that's what you're interested in you're better off as a generalist.

Mar 9, 2013

Enid is right, the PE teams at consulting firms don't do operational work for portfolio companies. That type of work happens in the general practice. The PE team is involved at the deal stage, and its main function is to pressure test the deal thesis. You end up doing a lot of primary research (surveys, expert calls, cold calls) to learn about the target's position in its industry, industry trends, etc.

Some of the larger PE funds have their own internal consulting groups (KKR Capstone is the best know example) that work exclusively for the firms portfolio companies. These operational groups tend to hire out of the generalist pool at MBB. Time on the PE team isn't really going to help you get this type of position. Where time on the PE team will help you is if your interest is joining a PE firm on the investment side.

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Mar 9, 2013

Enid and Reset thanks for your input. Much appreciated.

Mar 4, 2017

Hey everyone, I couldn't find any literature on this, so here it goes: how possible is it to transition into Bain Cap (or other consulting-friendly PE shops) with post-MBA consulting experience?

I know there is a path for pre-MBA Analysts/Associates at MBB to switch into PE right before they go to business school (so that's not my question).

If post-MBA people in MBB work in the PE consulting team and/or are able to network effectively, is an exit into PE doable for them? For purposes of this conversation, let's assume these people do not have traditional IB/PE experience and are not experts in a particular industry

Mar 5, 2017

For what I understand it is not impossible but far from likely. Pre-MBA is much easier in that regard. Unless you make it all the way through to partner and go from there.

Mar 8, 2017

Interesting.

Far from likely because that is not an attractive option for people in the PE team within MBB (they'd rather stay in consulting or work in industry)? Or is this an attractive option, but there are such few spots for those types of transitions and the demand is so high?

Do you think this dynamic changes if the post-MBA MBB consultants have prior PE experience (albeit not "name brand"?)

Thanks!

May 19, 2020
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