PE Recruiting as a Lateral Analyst w/ Weak Academic Profile
Hey y'all. Hope everyone is staying safe and healthy amidst COVID.
I'm currently a second year analyst at one of the larger MM IBs (think Baird, Blair, HW, HL, RJ) that lateraled over after spending about a year at a smaller boutique IB (approaching two full years of analyst experience this summer). While I've enjoyed my time in IB thus far, my current goal is to transition to a MM PE fund ($500 million to $1+ billion in size).
I am early in my process of reaching out to headhunters and networking with funds of interest (and also a little lost as to how to navigate some of this given the current climate but will take it one day at a time) and have a few questions regarding my candidacy that I was hoping the community may be able to answer / opine on:
(1) I'm a lateral approaching the end of their second full year in IB, and I feel very late to the PE recruitment process. While I don't buy some of the WSO rhetoric that I'm doomed to never make it to a suitable PE shop because of my non-traditional background, I don't know what funds are likely to be receptive to my position or what the likely timeline from here looks like. If you recruited into PE later as an analyst (beginning outreach 2nd or 3rd year) or as a lateral analyst, it'd be great to hear from you and understand any major challenges you faced. Are headhunters still the best way forward? What detours do I need to be conscious of / avoid? Any and all feedback is appreciated.
(2) My academic profile sucks. To give you a better idea: I have an ACT score in the 20-25 range and an undergrad GPA of ~3.3 from a complete non-target (I don't mean a school that ranks but just doesn't have much Wall Street recruiting — I mean a complete non-target that Edward Jones doesn't even come to). I completed a top one-year master's program (think MSF / MMS / MAcc) at a solid school (Duke / Vanderbilt / WUSTL) where I also finished with a ~3.3. My GMAT to get in was equally weak (~650).
How much will this academic profile hold me back, given stellar reviews at my boutique (won't have a complete review at current MM firm until June / July) and strong references from my boutique (hopefully those to come at current bank as well as I develop credibility among my team)? Is it worthwhile to spend time retaking the GMAT to have at least one great academic stat to point to? Again, my goal is a MM fund between $500 million and $1+ billion so I'm hoping by not striving for MF PE or even UMM PE (not necessarily striving for the likes of Golden Gate or Genstar [great funds but not a hard line in the sand in terms of goals for me]) that I can get away with spending my time elsewhere on potentially more constructive items (preparing for interviews / networking / doing well at my current job / side startup). My concern is that I still get filtered out more often than not at even the smaller shops.
Apologies if anything above is incomplete or incoherent. Running on fumes and wanted to get this post out before signing off for the night. I appreciate any and all feedback.
Going to raise the @APAE" and @CompBanker" signals here. Big fan of your guys' posts on here and very much value your opinions.
Thanks.
Not sure I’m going to have the best of feedback for you because it really depends on each individual shop and their willingness to hire someone with your academic profile. The fact that you are coming from a large MM will be extremely helpful and might make the difference between getting the interview or not. Again, hard to say.
Based on the quality of the candidates that we get each year, I can say with a fair degree of confidence that we would be unlikely to give you an interview, even coming from a large MM. There are just too many candidates with similar professional credentials and far superior academics. I don’t say this to discourage you, but I think your expectation should be that most reputable PE shops (from LMM up to MFs) will not give you the opportunity to demonstrate your capabilities.
Thanks. This is helpful insight and coincides with what you or APAE once posted about how the road into each next career step only narrows as the best of each prior pool of the best are selected.
Just thinking through how to maneuver from here then:
Do you think it's a worthwhile time investment to retake the GMAT to be able to post a score of 700+ on my resume and forego revealing the GPA at all there? How much marginal benefit would I get out of having a more respectable GMAT score to share vs. what I have now? In your view, is it worth the time?
Failing the thought above, do you have any broad stroke advice on where I should be focusing my efforts to optimize results? Is networking as effective in this career jump as I maybe found it to be to break into IB in the first place? What would someone with my profile have to do to get in front of your shop (e.g., know someone very personally, have an MD call on their behalf)? This could even be suggesting to more strongly consider investing roles outside of PE (corporate development, for example).
Finally, how do you define "reputable" PE shops? Just trying to get a better sense of where the majority of my efforts should be focused. Shops on their first fund? Shops that seem to have associates coming from smaller / less known IBs?
Again, many thanks for responding here. Glad to see you back on the forum.
EDIT: If it helps provide additional context as well, I interned at two LMM funds during school and then closed a buyside deal as the sole analyst (only myself and an MD) at my old boutique.
So a few thoughts. Definitely retake the GMAT if you think you can get in the low or mid 700s. Unfortunately I would NOT reveal the fact that you have taken the GMAT and got a 650. That is just one additional point on a trendline that shows your scholastic achievement is below the average for the industry. It is likely to hurt you more than it is to help you.
By reputable PE shop, I mean a legitimate shop with at least a fully committed fund, as opposed to two guys that are making control investments with money from family/friends. Doesn’t need to be known across the nation, but it does need to be stable and have made a few investments.
As for networking, it couldn’t hurt. Having an MD call on your behalf MIGHT get an interview, but not a lot of bankers will be able to get you a job in PE. After all, the PE firm is the client and the banker is the service provider, so the dynamic is not quite the same as the PE guy trying to get his kid their first job as a banking analyst.
Congrats on being able to lateral to a better firm. That shows a couple promising things: that you interview well, that your work product is above average, and that you're personable to the point you shine relative to your profile on paper.
I think your intuition about the GMAT isn't wrong. It's a crummy thing to recommend in that it's a lot of effort for a single bullet point that may still get glossed over, but on a binary scale, yes, it's a thing that helps improve the perception of your intellectual abilities.
I wouldn't aim as low as 700+. At this point, anything below a 750 for people in finance is considered unremarkable. If you're sincere about trying to mitigate your thick-part-of-the-bell-curve GPA, you can't replicate that a fourth(!) time (ACT, undergraduate GPA, graduate GPA) with a similar GMAT score.
Giving it to you straight, it's tough to convince someone you're smart enough to do the work when every quantifiable data point says you're very much in the middle of the pack. My sense from how articulate you are and what you're sharing about your reviews is that you're great in person. This is going to be your saving grace. You are going to need lots of at-bats, but I bet that someone like you can convince a firm to take a shot on you.
It will be exhausting, emotionally draining at times, and probably take longer than you like. You'll see no rhyme nor reason as to which places you get farther into process with. A $250m firm with $100m fund sizes may not advance you past an informational coffee chat, and an $800m firm with a $300m fund size may take you all the way to a superday.
You need to practice a very personal approach here. Headhunters are going to filter you out.
The reputable shops are just ruthless about knowing where they earn their bread; they usually have two to four primary clients that make them their money, each of whom will hire something like two to four associates annually. The best three dozen private equity shops are covered by about half a dozen headhunters.
The less prominent headhunters where someone may really invest in hearing your personal story and pick up the phone and try to work on your behalf are probably talking to clients who by nature of the fact that they're using headhunters are likely more impersonal, more happy that there's a filtering mechanism, less likely to read your resume favorably.
You have to brute force this with cold emails and networking. Find alumni from your school. If you went to Fuqua, you have a gold mine. You can email any Duke alum. Find alumni from your new bank. They're going to be empathetic with any human being who served in the same trenches. They're probably going to have academic profiles a little less jarringly different than yours. They're probably working at lower middle market and middle market shops that are harder to find, that are more thinly staffed, that are places where the human touch really matters.
Connect with these people over coffee, breakfast, lunch, drinks, whatever you can. Ask them about their story, what difficulties they navigated, how they hope to see their career progress. Do it with no expectation of immediate return. If you have half a dozen kind touchpoints with someone over a year, it's pretty easy to slip into one of your catch-up conversations that you're thinking about next steps and would really welcome their advice.
That's guaranteed to yield you at minimum half an hour of productive insight. Anyone you've connected with really well over that year is someone you can be direct with and ask if there are any opportunities at their firm. Some will probably demur; if you sense them pulling away, you can ease it on them by asking if they know any places they could point you toward. People will appreciate you being that gracious by trying to make them more comfortable; most people suck at delivering any kind of bad news and they know it. That earns you a lot of relationship capital.
This will get you a job. I can't guarantee you the timeframe, but at the end of it, you'll end up knowing dozens of people who should think favorably of you. Over time, that body of people will yield you a wealth of career opportunities: deals, investors, fresh eyes on a problem you're wrestling with, jobs to consider, you name it.
In terms of broader advice, I would drop the side hustle startup you mentioned. Focus on one thing at at time.
If your goal is to get into private equity, the honest truth is that it's going to take a lot from your current position. If you want a 750 on the GMAT, you may need to put 150 hours into it. If you were to do an hour every other day, you're looking at 10 months just on that.
If you were going to be really proactive about networking, you may spend an entire weekend on a Google sheet just finding and logging every warm connection possible in your world: alumni of both schools you attended and both banks you worked at. If you then sprinkled in an hour of emails to those people twice a week, your total time on GMAT plus networking is easily a year.
Keep your head up. It's a reach, but most impactful things in life are. 'Nothing good ever came easy' is a saying for a reason. You can do this.
Thanks, man. You continue to be one of my favorite posters here for good reason. I have a few thoughts in addition to below on what you said above but would like to send them across via PM because they're very specific to me and I want to ensure anonymity on the public forum.
Still very conflicted on the GMAT. Most of my peers I've asked about the GMAT outside of this forum as well as my old MD seem to think it's not worthwhile when weighed against the time that could instead be spent preparing for interviews / networking / other items. However, you and CompBanker alone have me on the fence about it. I took a practice exam yesterday and landed a Q/V balanced score of 650, and I've begun dusting off some old study materials to take a look at over the weekend. The only thing giving me pause about not jumping in for a full retake is the opportunity cost of not focusing on the startup mentioned above, which I know I made sound like an incomplete thought / side passion in my original post but believe has real potential that I can share more about in my PM.
Spot on. I would say I have a very similar sub-par academic background and SAT scores. But I ended up getting top tier PE jobs because I did well in interviews and without exception every reference check was like “He went to X school, and his SAT scores abysmal very, is he a smart guy? Thoughtful? Do those datapoints reflect your impression of him? Etc”. If you get across the finish line on interviews, very strong references will get them over the bridge on this last sticking point.
Delete - Double Post
It’s all about networking to get the initial interview foot in the door, then it all comes down to story and execution.
You obviously need to address your school choice and academic performance. There’s also a huge difference IMO between Duke and Vanderbilt/WUSTL. If it’s Duke you have a bit of a counterweight to UG, if its not Duke, then less so. If anything it just reinforces your mediocre academic performance and turns it into a pattern.
When I went through PE recruiting, I’d size up everyone else at the mixers etc (for MF recruiting), and 99% of the people were as you would expect Exeter-Harvard-GS/MS. Every now and then there would be someone from Fairfield University working at Montgomery Partners Investment Banking (or whatever). Point being, you can network and be scrappy to sneak in the back door at even the most competitive/snooty processes. Once someone willing to have a convo, it all comes down to your story, how you’ve crafted it, and how you tell it.
Thanks, Marcus. I appreciate you posting. If you’re cool with it, I’ll send you a PM to get your impression of my overall profile / story to be told here. It’d be nice to forego a GMAT retake, especially as it sounds as though even with a great score, it doesn’t clean up the broader academic trend and that headhunters would likely filter me out regardless of how much better I could do.
Sure happy to share my thoughts.
Just to be clear, you are not solving for your “recruiters wont give me the time of day” issu. That is largely unsolvable. That ship has sailed. Luckily, I’d file that under sub-optimal buts point is unimportant.
You are solving for the fact that you’ve put up a P&L that shows mediocre academic achievement/intellectual horsepower. You’re trying to give people a datapoint that makes them feel better that they are accurately judging you as a diamond in the rough.
I had a preposterously low SAT, but a 95th percentile score in GMAT. When I networked into recruiting processes and crushed interviews, my UG, UG GPA, and SATs were still there saying that yeah maybe I’m really scrappy and hardworking and resourceful, but just lack the intellectual horsepower to hang at this level —which is bullshit regardless of your GMAT IMO, but you still have to play the game the way the rules have been written. Putting up a very good GMAT gives people the green light to get comfortable with that looming doubt.
mrharveyspecter would be curious to get your thoughts as well if you have some time to take a look.
I don't think I can add too much more on top of what has already been said. With that being said, my rough thoughts are below.
In general, it's tough to make it in PE without something to indicate you are a standout. It's such a competitive industry that headhunters/hiring managers are just looking for any reason to disqualify someone. I'm not the smartest guy and didn't have the highest GPA, so I understand where you're coming from, but I've also been on the hiring side of things, going through countless resumes all with 3.8+ GPAs, perfect SAT scores, and it's would be tough for me to not throw out a 3.3gpa resume if I came across it.
My advice is that at some point you'll likely need a marker or indication that you have high intellectual horsepower. You don't need to show you're the smartest person in the room, but you need a high GPA, high GMAT/LSAT/GRE, MBA from an MBA business schools">M7, etc as a stamp to prove this. Frankly, it's a bummer you didn't use the Masters in Finance to show this, but it is what it is. I would focus on re-taking the GMAT or some standardized test and try to do well on it. 1. It could help you for B-school down the line 2. Just think of it as a longer term re-branding exercise. Devote effort to it over a period of time and see what you can do.
In the meantime, I'd leave GPA off on your resume. Headhunters will either ask or just filter you out, but you can't do much about that. Certain PE shops will care a lot about it, others might not, especially smaller or lower MM ones.
I'd also focus more of your recruiting attention to LMM/MM firms and probably ones that aren't in major areas. I know from experience that once a firm hits a certain size and level of success, it becomes way easier to start taking the creme of the crop banking analysts. A few funds back when I was working on hiring our first associate class, we really had to look for special situations types of candidates. Now a days, we're still a small fund relatively speaking, but get nice inbound from the MM analysts we've worked with and have hired over a few bright kids. These were all high GPA, high test score, top school kids, who were also mature and personable with good deal and technical experience and we had a good pool to choose from.
Point being, early stage fund's won't have that and will be more likely to take a guy with a strong MM banking name on their resume and a few years of banking experience. Make a list of all sub $1B funds you can find and maybe even sub $500M funds and start reaching out. Some funds have a blue-chip lean, and others might care less about your grades and where you came from. It'll take persistence and a little bit of luck. Strong references will be huge as well and hopefully you can shine in interviews.
Lastly, have a story around why your GPA isn't great. If it does come up, own it, and hopefully have something to point to that can offset it.
So the tl:dr is basically, start working on something that can make you look less academically average, focus search on LMM/MM firms that might be willing to take a chance on you, own your story and find a way to show that you're excelling beyond your seemingly average background.
Hope this helps.
This is excellent advice. OP, zero in on this.
Thanks. Always appreciate your perspective / posts.
Doesn’t matter your background; a 760+ will open eyes at any PE interview, even if it’s ‘in line’ with the rest of your work / academic profile. Some schools have grade deflation, GPA doesn’t reflect course rigour, and SAT was 5+ years ago for most. But the GMAT is a recent, universally understood data point. You can couple a good score with your decent-ish undergrad GPA — which, due to your alma mater’s “complete non-target” status, will be a complete black box to most — and look totally fine from an intellectual horsepower standpoint. Definitely leave off that ACT, though.
The question for you then becomes, can you rise to the challenge? It doesn’t have to be a 760, but I think 720ish is a good benchmark. Shoot me a PM if you want to go into more detail; I took the GMAT and it was definitely useful during PE process.
Thanks. I appreciate your feedback. Did you take the GMAT specifically to mitigate a non-ideal academic profile or was it something you intended to take for business school that you found helped with PE recruiting?
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