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.
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
- Golden Gate Capital
- Altamont Capital
- Advent International
- FFL Partners
- Audax Group
- New Mountain Capital
- Sycamore Capital
- 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:
- 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
- Private Equity Compensation & Salary
- Choosing between McKinsey, Bain, and BCG?
- Observations of a PE Analyst
Interviewing for Private Equity Jobs?
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