Hey everyone,
I am currently a first year analyst at an M&A group of my bank. I really appreciate the learning opportunities and experiences I am getting but am having some questions/doubts about next steps in my career path that I was hoping this forum could help with.
Initially, my plan was to spend 2-3 years as an M&A analyst and then transition into private equity. I've heard that in the medium-term there is an improvement in hours spent at the office, the pay, and that the buy side includes less meaningless work. However, I'm not going to be dilusional and tell myself that everything is going to be perfectly green on the other side and that life will become perfect. I know that PE is often seen as "banking 2.0" or "banking-lite" as it entails much of the same sort of work -- a lot of which can be quite mind-numbing. My biggest issue is that I am beginning to doubt how much I actually enjoy the entire process of "deal-making". The initial reason I even wanted to go into M&A and then move to PE is because I wanted to work with companies in order to understand how they function and how the people that run them think. As such, I think that I am more interested in the opeating and strategic issues that companies face, as opposed to the financial ones. I still think that finance is extremely important and even essential to understand when running a company (hence I do not at all intend to complain about my current job in this post), but recently I have been thinking that Consulting may actually be the more appropriate next step when taking into account my personal interests.
I was wondering if anyone else here has faced a similar issue. I know that many consultants strive to move into IB/PE (some of which I have met personally), but has anyone transitioned in the opposite direction? Was it a good step for you?
For those that chose to move into PE, do you know if there are PE funds that take active roles in consulting their portfolio companies? I know that places like KKR and TPG have their own internal consultants, but a) I have absolutely 0 interest in working for a mega-fund (I have yet to meet anyone who can honestly admit to me that they enjoy being there...although I'm sure such people exist somehwere) and b) I would be more interested in a role where you could do some of both -- financial investing and some operational/strategic consulting. Would this be more prevalent in perhaps the middle market growth equity firms? Perhaps what I'm asking for is just complete wishful thinking?
Another reason I think that consulting may be a better option is because I don't want to work for the Man forever. I'm sure that Misters Goldman, Sachs, Stanley, Morgan, Kravis, Bain etc were/are very fine gentlemen, but I think that every person eventually wants to have something she/he can call their own. As such, I think I would like to start my own company one day (no idea yet when, how, or doing what), and I was wondering if consulting or private equity would provide me with the best exposure to understanding how companies are run?
Finally, could anyone comment on how satisfied they were upon moving to middle market PE? Was it as much of a life improvement as it is made out to be?
Anyways, I know there are lot's of questions in here-- some of which are pretty open-ended. If anyone has any advice, no matter how general or specific, it would be much appreciated!
I recommend going through this thread: http://www.wallstreetoasis.com/forums/why-do-ppl-choose-megafunds-over-… It doesn't cover your consulting questions but it has almost everything about the experience in MM PE.
More PE guys start their own businesses than consultants
consulting is even way more mind numbing. u will pop in CDs and draw 2x2 charts.
If you can, do PE. There's a reason consultants would rather do even ibanking (i got a few calling me this week asking me who left so they can apply to my ibank).
a consultant's job is pure crap until you make partner and start sourcing ur own clients and even then its less fun than MD at an ibank where u can be consultant + suggest transformational ideas like huge M&A deals
stick to the path and thank me later
^you are completely delusional. The work I do is not mind numbing at all. Yes there are grunt aspects to my job, but overall it's pretty intellectually stimulating and the face time I have with very senior clients is priceless experience.
really appreciate the input guys, and thanks for the above link!
manbearpig- could you elaborate on how you chose consulting over other careers? how does it affect your goals going forward? and what sort of things do you do every day? lots of travel?
hey manbearpig, go back to talking about ur audi on ur 120k salary. this is a PE forum. not for u. shoo.
lol face time with clients. i'm not even advocating banking either but u get way more substantial client facetime with IBD. both jobs suck though and are sellside.
Buyside STRONGSIDE!
Haha, Leveraged Sell-Out did a great job with this paragraph:
"Throughout the credit crunch, elitism has been one of the last few fibers holding together the morale of the younger ranks of Wall Street... Deal flow could literally be non-existent in private equity or your hedge fund could be down 20%, but hey—buy side, strong side."
dang u got me bro. well played.
but seriously grats on the car.
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bump - let's update this post a bit. Thoughts everyone? Or still same old same old?
This 5 year old post took the words out of my mouth. Can anyone who has gone this route share their input? I started doubting my finance career as I began interviewing for buyside roles.
anyone?
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Short answer is that there won't be a universally right answer. Everything is tradeoffs. I'll try to list some of the big ones as someone who did MBB + 2 years MF PE (back to MBB).
PE
Consulting
I don't think PE vs. consulting is like a 'eat shit or eat steak' type of decision making. I think both are eat shit or eat more shit but you might get paid more if you eat more shit. Both are tough, both are mind numbing to an extent and both will leave you exhausted. I will say PE is more exhausting but the squeeze might be worth the money to you if you have the stamina.
All in all - my takeaway so far (an opinion) is that both will make you rich. One might make you richer. But neither will leave you broke. So I chose the easier one to still have a live. Why survive / tread water through life
Great comment. Wish I could nominate this for forum HOF.
I guess the halfway between consulting and PE is an LMM or MM PE firm with a strong focus on ops. Look for firms started ex-C level executives etc... Or like you pointed out in the OP, you could always join the shared services/consulting group within a PE firm. The smaller the fund the more hands-on work you'll be doing. I've been pretty surprised by some of the questions I get from PE guys at these funds - surprisingly knowledge about miscellaneous tactical bullshit you would normally only know if you are an operator.
I work for a UMM fund currently ($4-8bn latest fund size range) that hires roughly 50/50 consultants and bankers. I came from the banking side, so this is second hand, but I have heard from multiple former consultants I work with that they liked consulting better and are considering going back directly or going back post business school. Many of them did work in their respective MBB PE diligence groups previously, so the work was generally related, but they frequently discuss hours being much better (typical night they're out by 7-8p, every now and then have a bad night such as 12p-2a but overall quite manageable), very few weekends, great expense policies (like able to expense 2-3 meals per day even if not on-site, nice travel perks, etc.), tremendously collegial environment (know one guy who is getting married soon and >50% of his groomsmen came from his consulting class), and good ability to take on more responsibility / move around as you want to explore new things.
This certainly isn't all of the former consultants - some actually do want to continue in PE, some are shooting for strategy/ops roles at really interesting companies, etc... but it's a notable portion of our associate pool. For reference, none of the bankers want to go back, and we work at a fund with average to slightly above-average culture (hours can be bad but people are good).
We have a key contact at one of the MBB firms who we use as our starting point on any diligence ("hey x, can you put us in touch with whoever from your side is the expert on [y super nichey sub-industry]?") and I asked one of the ex-consultants who came from that firm how much our contact makes - he said probably in the $2-4mm range. This guy is probably late 30s, he gets on calls and talks about work other people did, marks up ppt decks and reviews call notes from his juniors, and makes connections to other folks in his firm. He basically doesn't work weekends, probably fires a few emails around every night ("where is x deck", "make sure we get ahead of their questions on xyz", etc.), and otherwise collects a cool $2mm+ without breaking a sweat. Sure, it's not f-you money, but in the grand scheme of things that's a pretty solid deal.
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