For PE Analysts out of undergrad who don't stay at their fund at the Associate level, where do most tend to end up? It's too early to go to B-School, and it's likely tough to recruit elsewhere not coming from a BB/EB background and not getting direct HH looks.
Would be interested in hearing the experiences of past/current PE Analysts at firms of any size.
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Why wouldn’t they get direct HH looks? Regardless they go to HFs commonly, but any door is open.
If you are at a top fund (one of the mf programs) you'll get looks anywhere you apply. With these programs becoming more mainstream I've seen many people jump across MFs after analyst stints or exit into hedge funds, though most try to limit re-recruitment risk by staying on with their firm and exiting to b-school if they don't like their current firm. I have a few friends that went this route and they received the same if not more headhunter looks than the "top banks", which makes sense intuitively. Headhunters know how competitive the programs are and that you have a displayed interest in PE and also that you have actual investing experience.
Interesting. What about MM/UMM analysts at lesser-known funds (i.e. not SLP, BX, WP)?
The lower you go down the pole the more individual pedigree will impact your exit opps and generally speaking it is easier to go down stream than up. Though if you are at a reputable UMM you should have no problems getting interviews. As I alluded to above headhunters place a premium on actual PE experience as compared to banking experience
Can confirm this is true - have an older mentor with some experience at a top (non BX) shop, and gets looks at hedge funds across sectors.
I would agree with all of the points above: PE analyst programs blow away the banks for prestige/exit ops in high finance but would also point out that having a promotion offer is important for lateraling. You can be at a top fund but if you don't have the promotion offer it is much harder in interviews to answer the "why are you leaving firm x", but that problem is true for any job (banking/etc.)
Wouldn't you typically get the promotion offer by your second year though, at which point most associate slots at other firms are taken? Or would PE analysts exclusively recruit off-cycle?
this ^
Most do off cycle recruiting for the point below. Whereas banking it is obvious why you would want to leave, for PE you have to have an actual good reason and not just trying to jump ship the first few months if it is a top fund. Other things I have seen are requesting mid year reviews / making offer conditional on you getting a return offer & completing your analyst stint
Do you actually learn to model at these shops? Have heard mixed things about who actually does the models at some of the secondary MFs like Bain, WP, Ares (analysts vs associates).
short answer yes. I wouldn’t think about it like that though. For banking it very much matters because you are trying to market yourself to private equity firms but if you are already on that side then you should be focused on actually learning how to think like an investor, and running numbers like a monkey on excel is a smaller piece of the puzzle than you might initially think. No company invests billions of dollars because some 24 year old kid playing with numbers outputs a 22% IRR. Every one of the MF analyst programs has modeling though it is typically done in tandem with an associate or vp. There is way too much money on the line for it to be done alone; in banking it doesn’t really matter because you just have to make it look good for the client and then you sell the company and it doesn’t really matter how reality plays out but that is just not the case in private equity
Was an analyst out of undergrad at a MF. It is very difficult to switch firms actually, because you need to have a very good reason for leaving -- if you are already at Blackstone, Ares, Vista, Bain or at another top firm you need to have a clearly defined reason for leaving a firm that is already at the top of the totem pole. If you're at a less well-known firm that is still well-regarded (Alpine and Audax, I remember, recruited out of undergrad) it is a bit easier in the sense that HHs know that you want to switch upstream, but that is harder in some ways than banking, since you'll have to justify the lack of transaction experience compared to bankers (easier to spin but just FYI). Regardless, never a bad idea to give your current firm a chance
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