Phd & Private Equity

I'm fairly new here and really eager to hear your thoughts on the subject above.

I've read some older posts regarding phds and investment banking but nothing really extensive on private equity. I'd like to know how competitive a phd from a business school would hold up to regular mbas in recruitment and if you have any personal anecdotes to share, please do.

A bit about myself. All family members do hold phds and I would like to hold one as well. Long term goal is to attend a doctoral program at a good school.

Happy to hear your thoughts.

 

I have never heard of a Phd going straight into PE and I just don't see how it could be doable. In order to come in at the MBA level, you need multiple years of transaction experience and no amount of schooling (even at the best business school in the world) is going to come anywhere close to be a substitute for that and it will be impossible to be competitive vs. the hundreds of 2+2 candidates.

 

"a phd from a business school"

A "business" PhD (i.e. a DBA) isn't all that common, to be honest. Not 100% certain, but I think the majority of people who hold PhD's from B-Schools are either working or planning to work in academia (e.g. a professorship at a B-School). I don't know what the industry opinion would be on such a degree, though I can't imagine it would be looked upon as positively as a PhD in a different discipline (i.e. PhD in CS, Econ, Engineering, etc).

 

Econ PhDs assume the mathematical competency of a Masters in Mathematics.

If you think Statistics is soft, look into Stochastic Calculus. Real soft stuff, eh?

I fail to see how quantitative PhDs would have an absolute advantage in PE. Unless, of course, PE becomes automated like trading.

I win here, I win there...
 

HF/PE is not an entry position for most people unless you are well connected, a rockstar and/or lucky.

PhDs are for long term detailed understanding of a particular subject. It's focused on the academics and theory of the subject matter, not so much the practice. You add value at PEs by being able to conduct diligence/analysis at the junior level (which comes best from OJT) and by bringing in heavy hitting LPs and a large rolodex at the more senior levels. A PhD won't yield any of this.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 
Best Response
drexelalum11:
The only way I could see a PhD being a good fit for PE would be if it gives you sector specific knowledge. For instance, a PhD in biology might be useful for a PE that invests in a lot of biotech firms. I don't see why they would need (or want) a quant PhD

That's a good point. Truth is, you are probably more likely to see PhDs in VC than in PE/HF. It's been my experience (although rather limited) that PE especially isn't about what you know, it is really about who you know. That is how you source the LPs to raise a fund, it's how you source deals in order to invest the capital you raised and it's how you exit those investments in the future.

Your network is THE most valuable thing you can have in PE. You don't really have to be a genius, you don't have to have all the answers, you just have to know somebody that does. Question about biology something or other? I don't know that answer, but one of the partners is an alum and sits on the board for a nationally recognized school in the area...he calls the dean, the dean calls the head of the biology department and they schedule a phone call. Ironically, that isn't anecdotal, we just did a very similar situation a couple weeks ago, lol.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 

it sounds like phd's are more or less useless in pe. its more about who you know than what you know...etc. and in the case where a phd might be useful, for pe guys, its about knowing some useful phds as opposed to being them.

thank you very much for your insights. they are greatly appreciated.

best, blue

 

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