Moving to PE from post-MBA IB (with pre-mba PE experience)?

Hi Everyone,

I currently work in LMM PE and am about to pursue an M7 MBA. I'd like to go back to PE, but the recruiting process is pretty tough, and I'm worried I could end up without a PE job and stuck with a bunch of debt and a bad job. For this reason, I'm considering a few years of post-MBA banking and then trying to lateral back to PE after a couple years. I know this doesn't usually work, but since I have legit pre-MBA experience, do people think this would be pretty doable for me? Has it been done? Am I crazy for considering it? Should I take my chances on MBA PE recruiting? Would appreciate any thoughts on the topic. 

Thanks!

Comments (19)

  • Associate 2 in PE - LBOs
Sep 1, 2021 - 5:09pm

I would even say maybe not a question worth asking. There are so many funds these days. If you are diligence about listing them out, contacting them, networking, etc., then you should have no issue getting a PE job, especially if you're not screening for UMM/MF.

Most Helpful
Sep 2, 2021 - 12:19pm

It's not common because the pool of candidates in your shoes is so small.  Nearly everyone that goes into MBA with the goal of going into banking afterward wasn't in PE before, and many weren't even in finance.  Their chances of getting into PE are miniscule because they don't have buy side experience, have no modeling experience and end up making a career of project / process management more than anything.

Further, even with people who have your background, it's pretty uncommon to jump from an Associate or higher banking gig into the buy side because your pay gets cut so drastically.  Going from IB Associate to PE Associate is like going from IB Associate to IB Analyst - it's hard to justify from a financial and career standpoint given it's such a step back.  And getting into a PE VP gig is tough because the number of those openings are very small, they're commonly recruited internally and usually a firm would want more time in investing than an IB Associate would have.

So because of those factors, it's very uncommon.  People on this board, furthermore, for the most part are banking analysts or interns, so very few people here with connections or relationships at the level that you're discussing.  So you'll get a skewed response towards just saying it's not possible here.

The reality is though that it's definitely doable.  Depending on what your Pre-MBA PE experience was, you might be able to even get into a PE role right out of school.  I have a friend who did private credit pre-MBA and ended up at a pretty good shop right out of b-school.  I also have a couple classmates who didn't even do PE before b-school, ended up at bulge brackets / elite boutiques, and then recruited for VP roles at LMM firms.

So it really just depends on what your pre-MBA PE experience was like, what school you go to and their ability to recruit into PE, and your networking chops.  It is not an easy path, but it's also not a very commonly trodden one so you will be challenged to understand how "possible" it is.  Definitely doable though.

Or you could end up like me and go into b-school with the intent of leveraging a post-MBA banking role to go back to PE, but end up staying in banking because the pay and opportunity for advancement are just so much better...

EDIT:  Also consider this, why do you want to go into PE?

I've worked on deals of all sizes and LMM PE seems like an absolute snoozefest for a massive cut in pay and earnings trajectory.  You're going to be working at a completely undifferentiated fund competing with other identical LMM's, strategics / UMM portcos looking for bolt-ons, non-traditional funds (family offices / SWFs, merchant banks, etc.) and MM funds run by blue chip sponsors.  On top of that, you have to deal with some of the most annoying problems on earth - whiny baby entrepreneur owners who think they're god's gift to earth yet don't know jack about their business, accounting and controls systems that are outdated / broken / horrible, small issues that will blow up a deal simply because they're large relative to the deal size, etc.  LMM deals are the most annoying to work on, and doing that as a career seems like a bad time.

UMM PE is more interesting, things are more professional, the competition is somewhat more limited, the problems and challenges associated with the deals are more interesting.  But the downside is that you're going to be working your ass off with no end in sight because the competition for those jobs and for returns at that level is so high. Until you're a senior member of the firm (which likely won't happen) you will be getting ground into the dirt for the foreseeable future.

Sep 3, 2021 - 10:54am

I wish I could give you more than one SB. I really appreciate your thoughts and thoughtful response. This is exactly what I was trying to understand, and it all makes great sense. Thank you! I'll definitely think about what you said, but this will be helpful in my decision. 

I enjoyed the buyside, but also enjoy the deal process, so either works for me. I think lifestyle at LMM is probably better than BB banking, which is partially why I'd go back. The upside at partner level is probably higher too, but I agree there is a lot of undifferentiated money chasing few deals (in which case selling the deals is better than buying them). I'd be happy in a banking career I think, but I'd like to know my (future) kids, so that's also a consideration for me. 

I assume you feel pretty comfortable about other non-PE exit opps too if you decide you want to leave at some point? I'd be curious what you see as the options for you to leave?

Sep 4, 2021 - 4:54pm

In good humour, and not trying to be a pedant, but it may amuse people to know that a word almost always misspelt is "minuscule"....it ia almost always misspelt as "miniscule"...understandable, but not correct. Here endeth the lesson, LOL

Sep 2, 2021 - 12:34pm

Anecdotally know of a small handful of people who went into M7 MBA with previous buyside experience and leveraged that to the credit/structuring arm of UMM/MF PE. If this is something you might be interested in I'd say it's more feasible than traditional buyout groups within these funds. 

The larger question is - do you want to be a banker or investor? If you like investing and already have PE experience, being a banking associate might be a miserable experience. Highly depends on your mindset and inclinations. 

Sep 3, 2021 - 11:03am

Very fair point. I could try to do something buyside, but I think a couple miserable years in banking wouldn't hurt, and if I know I can get back into buyside (and not be pidgeonwholed for the rest of my life on the sell-side), I think I could handle it. Don't want to go into banking if I'm completely screwed though. During those few years I figure I could try to figure out what buyside I want to do as well. 

Sep 3, 2021 - 11:09am

I'm confused why banking is even on the table for you to be honest. You can definitely get another buyside job given your experience and M7 MBA on your resume. What are you hoping to get out of banking? You won't be modeling much as an associate, you already (presumably) understand the transaction process given your previous experience, and have the opportunity between now and the start of your MBA to build your network, starting with the support of those at your current firm. What about banking appeals to you? What do you think it will add to your skillset besides having the name on your resume? If you are trying to check the banking box, the time to do it was as an analyst - if anything, going back to banking as an ASO after being in PE might make buyside shops question your dedication to investing and think you don't know what you want. If you want to be an investor be an investor. If you want to be a banker be a banker. 

  • Associate 1 in IB - Cov
Sep 3, 2021 - 11:22am

I was not in your shoes pre MBA, but there were a few people at my M7 who had previous PE experience and went through IB recruiting. For the most part they had foreign PE experience and must have wanted an American bank on their resume.

Some with domestic PE experience went through banking recruiting basically as a back up, landed top EB offers, and then ended up going buyside anyway.

Yeah banking recruiting sucks up a lot of time. But it's 100% doable to do PE recruiting and banking recruiting concurrently.

  • Associate 1 in IB - Cov
Sep 3, 2021 - 11:35am

The timing definitely seemed like a hard thing to nail. Of the two in my class that I know did this, they both ended up getting and denying top banking offers for PE roles. I think you will be pleasantly surprised how far your LMM PE experience can take you. Having pre MBA PE experience puts you into the arena of PE recruiting that those without PE experience can't even enter.

  • Business School in IB - Gen
Sep 3, 2021 - 1:08pm

I have more thoughts on this than I could possibly write in a couple paragraph response here, and most of the key points have been made. For context, I had finance (non-IB/PE) experience pre-MBA and got a lot of looks for PE in my first year, including a couple summer offers for very small funds. I also got some IB offers and worked in one over the summer. I'm at an M7 school where a lot of people recruit for PE.

Every person from my class who had your experience got a PE offer for the summer. Almost all will have to hustle for a full time job because I don't think many got a return offer as that's not the norm. The bottom line is your IB argument doesn't make a lot of sense to me. Either you want to do IB or PE. It sounds like IB is just a hedge in case you don't get a PE job. You won't know about PE for sure until after IB recruiting, but if you got a few decent offers and recruited for PE concurrently with some early success, you could just not sign with the banks. For the summer, going to IB then recruiting into PE makes very little sense because then you might as well intern in PE and show it's what you want to do. You'd end up recruiting anyway for PE full time it sounds like and the IB full time offer won't last long enough to see through the PE recruiting.

Moreover, going into IB for a few years after MBA doesn't make sense for your goals. As others have asked, what would you gain from IB? It's mostly for us folks who didn't work in IB/PE pre-MBA and are now trying to break in. You've already done PE and would gain very little from being an IB associate. The switch to PE is more doable for you post-MBA, but I can guarantee your odds are as good or better now vs. 4-5 years from now after you've wasted a couple extra years in IB on the road to your eventual goal.

Happy to elaborate on any point here.   

  • Associate 1 in PE - LBOs
Sep 3, 2021 - 2:22pm

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