MM IB -> PE after 1 year

MM monkey's picture
Rank: Chimp | 10

Hello Everyone,

My first post here so big thanks to everyone for help in advance.

I started off at a CC and then transferred to a non-target school which I graduated with a 3.6 GPA. After college I worked at a no-name valuation shop for 7 months, which I recently left for a MM IB in NY where I work in a coverage group (no M&A group at my bank so we do the modelling). The bank itself is not the best but my group is highly regarded in the industry (top 10). Unfortunately, after a couple months in banking I know that it's not for me and would like to move to PE asap.

So my questions are:

How would a PE look at someone like me assuming that I would try to move after 1 year in banking (+7 months in the first gig)?
Should I even mention that I worked at the valuation shop before IB (putting it nicely they have a bad reputation in the industry)?
Do I stand a chance of landing a job at a MF? How are my chances with a MM PE?

Comments (8)

Mar 24, 2020

Bump. Also interested.

Mar 24, 2020

Just to be clear, you want to move to PE right away right? Not after completion of your analyst program? Did you go through PE recruiting this year?
If I assume that you want to make the more right away, frankly that would give me some significantly doubt that 1) you will enjoy PE and 2) you have the grit and work ethics to succeed in this industry. At the junior level, PE is not that different from banking, you still work long and unpredictable hours, doing the very same tasks (building model, putting together presentations, etc) you would as an banking analyst / associate. What makes you think you will enjoy PE more than banking? Why can't you finish your 2-year program?
I think it's fine to want to move over to PE at the end of your analyst program though.

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Mar 24, 2020

Not right away but after completing my first year.

Also, I love some aspects of banking like doing research, putting together CIMs, working on models, spreading comps in short the analytical side of it. I am not the most creative person though and making presentations "look nice" is what I dislike about the job. Correct me if I am wrong, but PE work is way more analytical than IB.

Mar 25, 2020

I agree with mtnmmnn's analysis here. At the end of the day, the junior level work in IB and PE are incredibly similar. If what you dislike about IB are the "creative" aspects, there is certainly no shortage of that in PE. Most firms still care about making things "look nice" whether it be for the investment committee, lenders, or limited partners.

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Mar 26, 2020

Fully agree with what mtnmmnn said - if you dislike IB that much then you're going to be in for a rough surprise once you end up in PE.

I know a couple of people who've made the jump to PE from large, established MM firms <1 year, but those were generally opportunistic moves and definitely not what I would categorize as something you should bank on being able to do. Also, MM IB to MF PE with only 1 year is going to be basically impossible. The MM IB to MF PE move is already hard enough.

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Most Helpful
Mar 26, 2020

Congratulations for your success so far. It's awesome to see the steps you've been able to unlock for yourself. Progressing from community college to middle market banking in the city is a feat. Don't take the (accurate) feedback other posters have given you so far as a reflection of your worth. Let's look at your questions as dispassionately as we can.

How would a PE look at someone like me assuming that I would try to move after 1 year in banking (+7 months in the first gig)?

Not very favorably. If you aren't familiar, most private equity recruiting occurs in a cycle. In my time (more years ago than I'd like to admit), things happened the weeks leading up to Easter - about 9-10 months after you began your analyst role. Headhunters (who you'd had coffee or phone chats with in the months leading up to that) would alert you on a Thursday that your resume had been selected by one or more of their clients and ask for you to schedule your superday on Friday or Saturday. A little over half the fund universe seemed to go on one weekend, and half went on the following weekend.

Nowadays, it's happening in November ... four months after analysts start their jobs. I can't make any sense of it, it's legitimately like taking an expensive option on a young person's future performance. There is zero way to really know someone's suitability for an associate role that early.

I believe this is why the associate lateral market has flourished the past half decade. Candidates are learning that the firms they signed up for 18+ months in advance have some cultural, lifestyle, or work flow elements that they eventually learned they dislike later into their banking role. Firms are encountering incoming associates who are less-than-fully engaged and or visibly interested in something other than their type of work.

Either way, this "on cycle" term refers to the fact that recruiting happens in a wave. The majority of 2020 start date roles were recruited for near the 2018 holidays. "Off cycle" recruiting does occur, and it's a bigger percentage of roles than people on this forum make it out to be, but the problem is that by nature there's much less visibility, predictability, or regularity to how those roles are marketed and filled.

The easiest path for you would be to participate in on-cycle recruiting this fall for a start date half a year out instead of a year-and-a-half out. Ceteris paribus, most funds are going to take the second-year banking analyst for a proximate start date over a first-year. The logic is you're more seasoned to the lifestyle (less of a flight risk), have more deal experience and general reps at bat, a little older and more polished, etc.

Should I even mention that I worked at the valuation shop before IB (putting it nicely they have a bad reputation in the industry)?

You'll get mixed feedback on this. Some people think it's lying to omit something from your resume. Other people won't blink.

It's up to you to decide whether to include it or not. Here is the best way to portray it if you do choose to omit it.

Make your date format years only ('yyyy' instead of 'mm/yyyy'). Illustratively, your line item for college says "2018" instead of "06/2018". This lets you write your banking entry as "2019-Present", and in the future when you get a new job, write that as "2021-Present" or whatever the appropriate start date is.

Do I stand a chance of landing a job at a MF? How are my chances with a MM PE?

While anything is possible and my post history shows how much I like to encourage people to swing big and reach for their dreams, the reality here is that you have minimal chances of making this your immediate next step.

Megafunds have the pick of the litter. Their typical hire is the 3.8+ kid from the strongest group at a well-regarded bank. It's a bit looser than people here think, where the forums would have you think that only kids from Goldman TMT or Evercore or Morgan Stanley M&A with a 3.9 from an Ivy make it in.

Yes, the literal best groups at the best banks tend to place consistently strongly. The simple fact though is that every megafund cannot fill its class with kids exclusively from those groups. In real life, it's a mix of smart people with high grades from schools that vary enough to also include Duke, USC, NYU, Georgetown, and those institutions' peer set who are in groups like Barclays TMT, Deutsche Bank LevFin, Morgan Stanley Media & Comms, Lazard, JPM FIG, etc. (a handful of kids that come to mind who I knew from school).

Then there's also a handful of charismatic, sharp, life-smart people who make it through with worse grades from worse schools. They shine in an interview. That's how they got into a good bank. Their personality mitigates their profile on paper. That's Ace Greenberg's classic PSD: "poor, smart, and determined."

In all likelihood, you won't make it far with the megafunds right now. You have a multi-step undergraduate profile (community college to final school, and it was a non-target) as well as a multi-step analyst sequence (valuation shop to investment bank, and it's a middle market bank). Your grades don't glisten at the bottom of your resume.

Don't let that crush you though. If after a reasoned, reflective process you've determined that large-cap private equity is your best fit, just acknowledge that you've got to take a couple steps to get there.

The easiest way would be to find ways to make your life easier in the analyst role for half a year so you can make it to on-cycle recruiting later this year. Get the best role you can. Work in it for two years, looking both for up-market lateral opportunities (there will be very few, honestly) as well as all the levers you can pull to maximize your profile for business school (leadership positions in civic or philanthropy organizations, board observer positions within your fund's portfolio, dollars raised for charity, strong stories for your essays, and the like).

The popular narrative here is true. It's hard to use business school to go 'upstream' in private equity from a smaller fund to a larger one. It does happen though, and it happens for the most prepared and polished people.

Good luck. I think you've done really well so far with the hand you've been dealt. I'd put some energy into reflecting on what it is about the work you want to do that you find attractive versus what you find painful. The other commenters are correct with their feedback. Much of the work in the junior roles in this industry is unavoidable. Make sure you know what you're getting into.

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Mar 29, 2020