PE Recruiting from Houston O&G IB in Current Environment
Current first year analyst at a Houston IB. My class has had a handful of analysts sign with MM O&G PE back in Fall/Winter, but obviously there has been no recruiting since COVID. The whole environment is very negative and the first/second years who have signed with O&G PE are unsure if their funds will survive or just be zombie funds once they come on.
The majority of my first year class has not signed and we are stuck in the dilemma where (a) the normal O&G/Energy funds are not hiring and have the risk they are/the industry is a dead end, (b) none of the first years have closed a deal due to COVID, and (c) we are at a disadvantage relative to other coverage groups trying to recruit outside of energy/O&G.
Would anyone currently in PE have any guidance about how to best handle the situation? Assuming that exiting O&G would provide the best long-term opportunities, is it worth trying to do the uphill battle of on-cycle without deals, or would trying to lateral/mobility to NY be a better (but longer) alternative?
Can't add a whole lot of commentary, but can relay that the situation is similar at my current Houston bank. Hand full have offers with a few people jumping to corporate roles pre-COVID. Hard to say what parts of energy PE are "safe", but would assume the more progressive funds like Quantum and EnCap that are doing more renewable-esque deals maybe able to raise good funds on a more flexible mandate.
As for exiting energy, I haven't seen that much of a precedent but I would assume a large number of the current analyst class is going to attempt that strategy. There are a handful of generalist PE shops in Dallas that usually pick-off O&G analysts trying to leave the industry. The analysts I've seen exit outside of Texas to non-O&G have usually taken a "discount" in terms of firm-size. Usually smart people, but its just hard to spin the O&G experience for more generalist investors and the recruiters are going to want to shovel you to energy because it is the path of least resistance.
As for my strategy, I was fortunate to get the A2A route to NY pre-COVID. Obviously the logistics are up in the air right now, but the firm has assured that the position is confirmed (fingers-crossed). My rationale was that by doing PE recruiting as an Industrials A2A (basically 3rd year analyst) in NY, I could better position myself for more traditional LBO exits. From what I've seen, the A2As typically land in adjacent NY coverage like P&U, Industrials, or Infra, but probably varies from bank to bank.
I'm honestly unsure how much the A2A transition will change my recruiting profile, but I stand by my view that I would rather be in my position than be in O&G IB/PE.
In your opinion, is the A2A industry/location switch more feasible than the SA to FT industry/location switch?
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