Comments (27)

 
Jul 30, 2010 - 4:52am

PE focused consulting (Originally Posted: 04/07/2013)

I have heard people ask this question a million times before but its never been properly answered..

What consulting firms do you think are Financial/PE focused?

Array
 
Jul 30, 2010 - 5:04am

PE and consulting firms (Originally Posted: 04/22/2010)

I was talking to a friend from M/B/B who was recently on an assignment for a top notch private equity firm. We didnt talk about the nature of the assignment but it got me thinking as to what are the kinds of situations where a PE firm would enlist services of a consulting firm (strategy consulting)..any thoughts/views? Would be particularly interesting to hear from people who have had first-hand experience..Thanks

 
Jul 30, 2010 - 5:07am

Yeah, my thoughts are on similar lines. In fact, in the case I mentioned above the client from the private equity side was himself an ex-M/B/B consultant and that is what got me curious as to what unique capability or value does a consulting firm bring to the table ( Industry network? niche domain knowledge?) . Like I said, any real life example would be interesting to hear...

 
Jul 30, 2010 - 5:10am

for a lot of reasons, a couple ones on top of my head include

  • when industry is very specific and extensive industry knowledge is required, consultants make better industry charts/projections regarding industry trend than bankers (they just copy from research reports). especially since PE build their own models in most cases, what is really value add from outside counsels are assumption inputs and arguments of them

  • greenfield industries where a lot of initial market assessment needs to be done. if something is not covered by research reports then bankers are pretty much clueless

 
Jul 30, 2010 - 5:12am

PE firms hire MBB for due diligence assignments, which are basically bitch work that PE professionals dont want to do. Stuff like interviewing employees, collecting some data, surveying clients, etc. Lots of cold calls, really boring stuff. I know this one MBB guy, who was on assignment for a PE client looking at buying a retail chain. He was literally in bumblefuck out in nowhere, on the streets trying to ask random strangers to fill out surveys. I thought it was a pretty crappy gig, considering the guy was MBB and came from a top 10 MBA.

Its also a rubber stamp kinda deal, like if a company had been thoroughly investigated by MBB then it looks good to everyone. MBB's fee of 1 million (or whatever it is they charge for 2 week due dili gigs) is nothing for large PE firms, so they just hire them to do the legwork.

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