PE vs. IB out of college
Hi all,
I'm currently an undergrad early in the whole career process, but pretty set on finance in one way or another right now. Though my knowledge and understanding is pretty limited, I like the idea of working in PE, as I have experience moving up the ranks of a business and constantly gaining deeper knowledge of different, more fundamental processes and how they contribute to a businesses's standing. With that said, I'm young and don't have a ton of experience, period. I've been doing some reading on this site and others about going into banking or PE, or a switch from the former to the latter a few years out of college, and was hoping to get some opinions or hear some experiences from anyone who has gone straight into PE or made the switch later. It's definitely been talked about, but I'm not sure I've seen anybody say they're glad they didn't go straight into PE or the other way around.
I'm also curious about the working hours of early-career employees in each segment. Obviously you hear the long-hours horror stories, but I've talked to some alumni at my school and just about all of them (most of whom work at BB firms) say things aren't too bad. I've talked to analysts, associates, and a few VPs. A couple are definitely in the 80-100 hour workweek mode, but most seem to enjoy no more than 12 hours a day, only weekdays. Maybe that sounds crazy and I've got something wrong, but that's what I've been hearing. I get the impression that work is longer/more strenuous in banking, but I've read a few accounts that describe them as equal.
In any case, thanks in advance.
If you can pull PE out of undergrad, do it. Yeah, it sounds great. But, typically it is very difficult to get into, harder than IB. My friend tried to get into it out of Princeton, but had to work a couple years then go to HBS to transfer into a NYC PE firm.
Landed an offer with a MF PE and EB
Ultimately signed with the EB, I'll point out my reasons below. I certainly do see the merits of going straight into PE but there really is no right answer imo.
While I'm sure working at a MF PE is a great opportunity, from what I heard from people, you become a great professional coming from IB. During the two year analyst stint you learn all the transferrable skills necessary. And (assuming you are at a top firm) headhunters from numerous MF/MM PE will come to you anyways. Also, depending on the firm, theres a chance in PE you might get pigeonholed into an industry/sector. Continuing on, the analysts/networking you make at IB will become CFOs/corporate dev. when (if) you do need to bring in deals in the future.
And for the alumni that tell you that banking isn't bad, of course they aren't going to tell you its terrible theres no reason for them too. But once you start really getting close/know them you know its different.
Did the opposite of thecoolkid but went to a MM PE shop and am currently in my first year. Lifestyle/time commitment is comparable to IB, but I'd argue there’s more stress (albeit of a different kind) because everyone takes your work at face value once they trust you to churn out good work product. If you make mistakes not only is there no one checking your work for you, but it can sour your colleagues' impressions of you very quickly. I've had to put in a substantial amount of extra time firming up technical skills to make sure that I don't fuck things up, and I think broadly speaking anyone who comes right out of undergrad into PE will tell you that the learning curve is pretty steep - which is definitely something to consider as thecoolkid echoed above. I did get a grace period in the beginning, but it was pretty short and you have to make the most of it. I made the decision because PE is what I wanted to do, so I figured getting a seat at the table earlier would only help speed up my development, especially with a bit of a trial by fire component.
Definitely always good to start thinking about things early, but keep in mind that only a small percentage of people even get SA IB roles, and only a fraction of a percentage end up receiving PE offers right out of undergrad. So, as nice as it is to consider what making that choice would be like, time is best spent getting your SA stint(s) lined up and moving one step at a time.
Private Equity offer after Undergrad or IB recruiting (Originally Posted: 07/31/2017)
I am a rising junior and have been preparing for months for IB recruiting season. I had an internship at a LMM PE shop this summer and have been networking and studying all summer to prepare for a banking internship. Now that IB recruiting season is here and my internship is wrapping up, I have received an offer to come back to the PE shop for another internship then convert that to a full-time PE analyst role right out of college.
I go to a non-target, however, have been networking and preparing for IB recruiting heavily. MY PE offer explodes in August before I will have the chance to interview for IB.
I am struggling to decide if I should accept the PE offer or take a risk with recruiting for banking.
Any thoughts?
Leverage it. Tell banks that you have an exploding PE offer and ask if they can accelerate your process
I have several calls this week and definitely plan on it. Only problem is that I only have a short amount of time left at the PE internship (think days not weeks) and am uncertain how much longer I can hold off on a decision.
Agree with this. Great to get the PE offer, but you won't leave LMM if you stay with that firm.
Better to recruit IBD and get the formal training, etc. and then recruit in a couple years.
Did you like it over there? Will it give you good growth/promotion/exit ops? This is a tough spot, but you don't want to miss the experience a summer at a BB. They clearly think you're a hotshot if they are offering FT that early. If it's a written offer with salary and target bonus, I'd take it.
I have really enjoyed my summer here thus far. Comp would be less than street starting out as an analyst, however the growth potential is definitely there. Next fund is expected to triple from the current AUM to well over $1B. Growth/promotion yes, approx path: 2 years analyst --> 2 years associate --> 2 years senior associate etc. Exit ops are unclear due to the fact that people are trying to get in, not out.
I'm in a similar spot as you right now, working at a PE shop with FT potential (Offered at the end of the internship with limited time to accept), but nonetheless, I'm fixed on partaking in IB recruiting. I think you should definitely consider what your aspirations are, where do you want to end up in the next ~2 years? For myself, I want to go from a MF -> MBA business schools">M7 MBA -> doing my own thing. Because of that, I'm strongly considering BB IB because thats the path of least resistance to MF. Basically, sit down and think about what you want to do and see if this position will take you there.
I know it's risky for you to leave this relatively secure firm (given the fact you've been practically offered FT now), but just remember, if you're not willing to bet on yourself, then who will?
Very good point and well said. Something to consider for sure... The partners here have all gone top 5 MBA, most associates have prior top-tier IB experience. Would definitely learn a lot, just not sure what's best in the long haul. If there wasn't such growth and upward mobility possible I'd probably go for IB. But since it appears there is a clear partner track, it makes things a little more difficult.
Very good point and well said. Something to consider for sure... The partners here have all gone top 5 MBA, most associates have prior top-tier IB experience. Would definitely learn a lot, just not sure what's best in the long haul. If there wasn't such growth and upward mobility possible I'd probably go for IB. But since it appears there is a clear partner track, it makes things a little more difficult.
.
Even if comp is slightly below street but you enjoy the work and people i would take the PE offer if you are not able to recruit IB. You mention you go to a non-target so recruiting is probably going to be stacked against you vs IVY/target schools unless you made good connections/networked.
Best of luck and let us know what you do!
I am in a similar position but my PE firm does not hire out of undergrad. If I were you I would not risk losing this offer just for a chance at another. A bird in the hand right? Besides if you go to IB you might end up back at PE and even if this firm isnt the one for you, you can get a few deals under your belt and go to a different shop. Once you have transaction experience I don't think it matters. most big PE guys have MBAs though so you might consider staying there until you can go to a top business school then the world is yours. I know you probably dont want to wait but these next 2-3 years post grad will seem like nothing in the grand scheme. But def do what someone else said and leverage this for an accelerated process before summer ends and then i would counter them with street average salary because they are just trying to get a good employee for cheap instead of paying a fortune to a goldman employee looking to leave. If you leave they will hire someone for an insane amount of money so you might as well try to negotiate for street base pay. 1) leverage offer 2) negotiate salary. If these do not work out then leave.
Appreciate the response. I feel as if I would be kicking myself if I didn't get a banking offer I wanted and turned down PE out of college. I will negotiate soon and see how it goes, just hope doing PE doesn't narrow my career opportunities too much so early... guess it's crunch time.
Last semster College Senior IB or PE? (Originally Posted: 06/27/2016)
Family friend can help get me into a top 5 PE Firm. For career purposes whats better experience IB or PE after grad? Low GPA, Good internship experience, State School.
Get what you can and worry about picking the best offer later, if you do end up getting multiple offers.
I don't understand why people are throwing monkey dong at me? (Downvotes)
LOL
IB to PE for Analyst Role (Originally Posted: 06/22/2017)
Monkeys,
Some friends and I were chatting and I had thought to reach out to just ask you all your opinions.
What are the details on moving into a PE Analyst role directly out of undergrad?
Is it actually a good play? Is the investment banking 2 year deal better than an analyst role in PE.
My buddy is dead set on PE and I had told him why not try?
It's my understanding certain firms like Warburg, Blackstone, and Vista have analyst roles.
Also, what are these roles like? Are they better than an IB Analyst spot from a experience and opportunity perspective?
I know I asked many questions but any color on the matter is appreciated as I see people doing Ib just to get to PE and people starting in PE? Seems to be a little backwards.
In addition to the above, it seems to be a trend that the analyst at these firms had a pretty good BB IB summer internship. Are there firms that you would have to of worked at to be considered or is one BB as good as the other for these purposes?
Thanks in advance!
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