Ask Me Anything: S&T to Consulting to PE Ops

Hey WSO, long time lurker, but happy to give back to the forum that has taught me a lot along the way

About me:
• Mechanical Engineering at a Target School
• Junior internship in Sales + Trading at BB Bank (return offer)
• 2-3 years MBB Consulting
• Currently in PE Ops in a new team at leading Tech PE/VC investor

Feel free to ask me anything

 

Hi Giraffe21, Thank you for giving back to the forum! Is PE Ops = in-house operational value creation team similar to KKR Capstone? If yes - can you please tell more about the (1) best ways of getting an interview with such a group vs MBB background (e.g. "cold" e-mails to MBB alumni, introductions, etc.) (2) interviewing process a) interview format (e.g. MBB-style case interview, LBO modelling, etc?) b) how many interview rounds c) time from first conversation to the offer d) anything else that you think is important Thank you very much in advance for sharing your wisdom!

 

Thanks AAAndriy--Yes in house value creation team similar to KKR Capstone/Bain Cap or Insight Onsite/First Round

On question 1, I am afraid I do not understand your question. It is a very small pool of job opportunities so there is very little structure to the hiring process (unlike MBB). Headhunters do play a role, but otherwise warm introductions is one of the best ways to get on the radar

On question 2 it was quite varied. I interviewed on-cycle and off-cycle for PE deal and ops team roles, but ultimately got my job off cycle. Some interviews had consulting style case interviews, others had take home tests with excel/ppt (not only LBOs though).

For the job I ended up getting the process was: + Introduced to the head of the group through someone in my network + Phone screen with HR + 3 phone interviews in the course of 48 hrs + In person interview 1 week later to meet the team before getting an offer + Some verbal cases but no take home or excel test

Three other firms I interviewed with: Firm 1 (Consumer Focused): + Phone screen with Headhunter + Take home case prior to first interview + Super-Day: Presented by take home case to MD, interview with second MD, lunch with Associate. Got passed to afternoon interviews which was 4 more 1-1 with MDs or VPs + Called back for final round ~2 weeks later. Breakfast with Sr Associate, Interview with 2 MDs, interview with firm founder

Firm 2 (Tech Focused): + Headhunter phone screen + 30 min call with Associate + Take home case--given data set, present my view on company performance + 45 min call with VP to present my case + 30 min phone interview with VP--was given consulting style case/market sizing + Superday with ~6 interview with last 2 the heads of the group

Firm 3 (Buyout focused) + Headhunter phone screen + 30 min call with VP + In person super consisting of Cognitive test, ~6 1-1 interviews ranging from Associate to MD; each with fit interview and consulting style case interview + Did not accept invitation to come back for final round

PE Firms are a bit more structured than VC/Growth Equity shops, but the biggest takeaway though is there is not a set path or structure for most of these jobs

 

Thanks for the AMA!

1) How did you lateral from S&T to MBB? 2) Is it possible to transition to PE opps Post MBA without pre-MBA consulting exp? E.g. get a MBB gig post MBA and then transition to PE opps? 3) What is your general day to day? Are you executing investment theses for portfolio cos e.g. helping reduce opex etc.

 

1) In my case I had it easy--I was at a target school for S&T and MBB. My junior summer I interviewed for Banking, Trading, and Consulting and guessed I would like Trading best. After the summer in trading, I thought consulting was a better fit so when I got back to campus I interviewed with the MBB firms and got an offer

2) Nothing is impossible but I would say it is rare. PE Ops is growing but every shop is different. That being said, the folks hired are typically of 2 profiles...either 1) you were a consultant and come in as an Associate and can drive projects day to day or 2) you have 20+ years of experience in a field and can come in and mentor portfolio CEOs as an Operating Partner. The approach of many firms is to only have the latter, without the need of junior folks. It all comes down to the engagement model and how hands on they get with portfolio companies

3) Answered in another post but feel free to follow up with questions

 

How did you make the switch across all those domains?

How did you study for S&T at a BB (in depth please)?

Why do you think they picked you for those jobs?

What were the pros and cons of each position?

How does PE culture compare to IB culture to Consulting culture?

Lastly, this is kind of personal so you dont have to share but... salary changes across industries?? What were they for you?

 

I will focus on the question of why/how S&T and then maybe we go from there:

I was a college athlete at a target school where I studied engineering and physics. I learned early on that I really enjoyed the theoretical aspect of studying engineering but it seemed really dull as a profession (limited teamwork, super slow feedback loops, slow career progression/trajectory).

Sophomore year with little knowledge of the business world I networked through a friend a job as a summer analyst at a mutual fund in NYC. I was able to sit in the weekly Investment Committee meetings, and pitch stock ideas. I had a great time, and it opened my eyes to the markets.

When I got back to school I decided to interview for IB, S&T, and consulting honestly not really knowing the difference between the three. I was at a target school with good grades and a decent resume so got interviews at the major banks and consulting firms.

My memory isn't great as this was 6 years ago, but specially for S&T a few tactics I leveraged:

  1. Understand the general purpose of a trading floor and how it worked--plenty of resources (like this site) for that. In retrospect, I probably had just enough knowledge to make it sound like I knew what I was talking about, but not much more

  2. What interests you in trading? For me, it was that I really enjoyed the mental challenge of engineering but it was too slow and boring. Wanted to be on a team, fast paced, and rapid feedback. Much like sports, at the end of the day you have a scoreboard (P&L) of how you did that day (for better or worse)

  3. Brain Teasers/Back of the Envelope Math: I usually got 1-2 of these questions per interview (e.g., https://www.glassdoor.com/Interview/You-roll-a-dice-Number-you-roll-amo…). I prepped by looking for questions on this site/google and asked friends who have already went through the process

  4. What investment ideas do you have? I tried to go into every super day with 3 ideas of potential trades I found interesting and be prepared to have a 10-15 min discussion. I made sure to have more than one in case two interviews asked, I could have different conversations

  5. Why this bank? They are all very similar, but I made sure to have at least 1-2 anecdotes about the culture or structure of the internship program based on networking conversations or conversations with friends that work at that bank

  6. Have questions to ask your interviewer. Show you have thought about it in advance, but also don't over-complicate it. Remember, people like to talk about themselves and their accomplishments

  7. At the end of the day, personal impressions matter. Try and connect whit your interviewer. While it would be great if we could remove bias from the process, many people still ask themselves "would I enjoy having this kid sit over my shoulder this summer"

 

Very different since Corona started! In my role, I spend roughly 20% of the time sourcing or conducting diligence for new investments, ~20% on internal projects (e.g., building performance tracking tools, events/knowledge pieces, etc ) but my main job is to help our portfolio companies.

That means I spend a lot of time traveling, at the portcos helping them from everything from setting the strategic vision, GTM strategy, Sales/Sales Ops, Marketing, Product, International expansion, Ecosystem synergies/collaboration

Unlike consulting where I would spent 8 weeks going to the same client M-Th, now I may have a dozen project across portfolio companies. Travel then can be a mix of shorter trips, but often in the same week so end up spending a lot of my time away from home

On any given week I will have a number of meetings with portfolio companies, usually 1-2 workshops, but with any job it is really hard to pin down what a typical 'week' looks like

 

Thanks for doing this! Would love to hear your thoughts on the experience in a PE operating group vs. MBB.

-How does the scope of your PE portfolio work differ from what an MBB would do? E.g., what projects would you do in your current role vs. seek an MBB -What are the pros and cons of a PE operating group vs. MBB in delivering client impact? -Which did role do you enjoy more?

 

Its not too different from my work at MBB, we like to think about ourselves as a 'mini-MBB' for our portfolio companies. A big difference is that we spend of our time thinking about ecosystem synergies (how can our companies work together or leverage each other as a sales channel) which isnt a focus at MBB

The biggest difference with my shop vs MBB is that I focus on 4-5 companies and anywhere from 10-15 projects at once vs at MBB when you had 1 case at a time. Some PE Ops groups (eg KKR Capstone) you are fully dedicated to a single project, so depends on the model. It was a big change, but I enjoy the breadth of experience/exposure.

Another difference is that my role now is much more entrepreneurial . Partly because I joined a new team, but at MBB you have thousands of consultants and decades spent optimizing the model to make you as efficient as possible (think IT support, personal development, staffing, etc). At most PE firms, the ops team can be ~5-15 people and you have to figure out a lot of things on the fly, and refine the groups value prop and operating model as you go. MBB is the kind of structure, PE Ops will be more entrepreneurial and 'fluid'

Another big difference is that at MBB I rarely served the same client twice and you often dont get to see the outcome of your work which really was de-motivating after the initial excitement of MBB wore off. I really enjoy that I now get to build deep relationships with my portfolio companies and help them on various topics over the course of months and years--sometimes even from diligence, to investment, through their growth cycle, and then to exit. You dont get that at MBB below partner level

I really enjoyed MBB as a training ground and could think of no better job out of school. That being said, there is a reason most people leave after 2-3 years after the get the consulting toolkit. Think the same can be said for my current role--I really enjoy it and learn a lot, but this is a stop rather than a destination for me

 

what area of focus/what team were you on in MBB to make the transition PE ops?

currently working at a PE backed tech firm in sales leadership developing new markets, assisting w/ GTM, helping to integrate sales/customer success teams post acquisition, & increasing overall revenue through net new reoccurring business.

trying to leverage this to join MBB to then transition in a PE fund such as Insight/Vista/Silver Lake etc. & would like to know what area of focus within MBB would be best for those exit ops.

 

I did almost all of my work at MBB around commercial/growth strategy, so a lit of GTM, product launch, international expansion, pricing, and BU turnarounds on the organic growth side and corporate M&A and PE DDs on the in-organic side. Understanding how PE firms do diligence/think about investing and building a network in PE was definitely helpful when interviewing for my next role

My question to you is why do you want to move to PE Ops, and what makes you want to join MBB to get there? Do you want to be in PE Ops vs Tech/Growth Equity Ops (the structures of these teams and backgrounds can be pretty different and tech focused funds like Insight often take mid-level folks from industry over MBB) Why are you worried about focus areas in MBB to get you PE Ops, before you even apply to consulting?

Without having any context, I would think think a better route to PE Ops would be:

  • Crush your current role

  • To the extent possible, network with your companies PE sponsors--try and get on their radar and network with other operating professionals at other funds

  • Use that network to land a job at another PE-backed company. Crush that one and you will start to be knows as a 'pe guy/girl'

  • Leverage that to either a better role at a PE Portco or join a ops team to work for a PE firm directly

If getting exposure to the PE fund in your current fund is not feasible, then I might look to alternatives like B school or consulting

 

Answers to your questions below: My question to you is why do you want to move to PE Ops, and what makes you want to join MBB to get there?

Enjoy the PE ops role. Current role has expanded, taking on a leadership role for our NYC office & assisted with many of the things that PE Ops focus on, i.e. GTM, new market expansion, integrations post acquisition, product strategy, etc. Through doing this, I have found it more rewarding & more aligned with what I want in a career opposed to traditional sales route. The route of MBB is through talking with people within my network on how they have transitioned to these roles, either MBB or being a c-level executive at a portco. Therefore, since I am not c-level only vp-level, they MBB seems the most feasible route in. Plus this will round out my skill set to be more in-line with that of a PE Ops role.

Do you want to be in PE Ops vs Tech/Growth Equity Ops (the structures of these teams and backgrounds can be pretty different and tech focused funds like Insight often take mid-level folks from industry over MBB)

This is the toughest one, I would like a PE Ops role focused on tech, I am open to growth equity but not sure if I'd want a career in growth equity. Honestly, have to do more research & chat with more people in both to truly determine this.

Why are you worried about focus areas in MBB to get you PE Ops, before you even apply to consulting?

*Only way I will get into MBB is via networking. I don't have an MBA nor do I have a top 25 undergraduate school. All I have is my work experience & my network to leverage. Before applying & going down that rabbit hole, I need to determine what the best focus area is, network my way in with people from that group. *

Crush your current role Have done that, promoted fairly quickly & brought in the top 3 clients for the company.

To the extent possible, network with your companies PE sponsors--try and get on their radar and network with other operating professionals at other funds *Current PE firm is small, roughly 25 people, ~$3B AUM, no ops in-house & we are only the second tech company they invested in. More of an old school traditional PE fund. Working for them on the ops side would not be possible unless they create the position for it, which is unlikely. *

Use that network to land a job at another PE-backed company. Crush that one and you will start to be knows as a 'pe guy/girl' This is possible, however, all their other portcos are in dated industries where my experience would not benefit well. Not off the table though.

Leverage that to either a better role at a PE Portco or join a ops team to work for a PE firm directly *Again, see able answer. Have exposure to our PE fund as they are the ones to interview/take me through the hiring process years ago, but again, working within their fund does not seem like an option given their structure. *

Not sure if these answers provide any more clarify into my background & where I am trying to go. Could just be thinking or looking at this the work way as well.

 

The ranges I have seen in the H&S reports is in the right ballpark based on my experiences. Obviously depends which firm you go to as comp can vary quite a bit.

Regarding my MBB and PE Ops pay, in my negotiation with my current firm I asked for all-in compensation in line with mega-fund investing associates, which was ~$50k more than I would be making the next year at MBB. My firm came back a bit more than halfway between the two numbers and I accepted

Regarding comp vs investing professions, this can vary significantly firm by firm. In general, I think your assessment is pretty close. Base pay will be pretty similar, but an investing professional will likely have a higher target bonus. Typically the investing team member would also have earlier access to carry

 

Currently in PE ops and I can second that it all depends on the firm. My firm is more focused on the distressed space and comp is on par with deal team at my level (not 100% sure if that is the case at higher levels). When comparing to my friends at tier 1 restructuring shops (A&M, Alix) my comp is significantly above where I would be (about $50k - $100k+).

Since the portfolio ops role is so different across funds, I think it is very important to understand where you (and the team) fit within the fund. I have heard from others that they are treated as middle office staff or not as well as the investment team, but it truly depends on the fund and their philosophy.

 

Thanks for the thread OP.

I'm currently in strategy consulting and I have an interview at a PE Ops team coming up, I wanted to ask your advice for the case interview. In your experience was the case interview basically identical to what you'd expect for strategy consulting? Or is there particular "nuance" or "spin" to it. I was wondering if I need to emphasise certain aspects (e.g. investor story, EBITDA uplift) etc because it's for private equity specifically.

I was also told I'd be given an abstract/brain teaser type case. Does anyone have any tips for those? I've had a few of them in interviews before, I bombed them.

 

Hi Brilldavecarl,

Its a good question, but first we need to narrow the world of "PE Ops" as that can look very different based on the different flavors.  My response below will be for buyout PE shops ops groups (e.g., KKR Capstone, Bain Cap, etc).  If you are interviewing at growth/tech ops groups which are often classified as PE Ops (e.g., Insight Onsite) it could be very different.

For Buyout PE Ops, I would expect your prep to cover three main areas:

1) Traditional MBB Case Interview Skills---As a strategy consultant this should not require much prep if any, but you will likely be given a company and a problem statement and you will be tasked with how to structure that problem and what areas would you need to explore/what ideas do you have for that given company/industry.  Expect it to be far less structured though than a MBB case

2) MBB PE DDD Skills: In reality the PE Ops cases will be halfway between a MBB interview case and a Private Equity due-diligence you would do at MBB.  Difference being the interviewer will really probe not just on what areas of the company they will need to focus, but how exactly would you go about getting comfortable with those questions/risks (e.g., Not just these are the questions I would ask, but here is how I would answer them and how would I get comfortable with the potential risks).  PE is all about getting comfortable with the downside risk, and this is where you demonstrate you understand the most critical risks to a potential investment and how you would get comfortable with those risks.

3) High Level PE Technical Knowledge: Here I would not go crazy, but there are a few areas it will be helpful for you to get comfortable ahead of PE ops interviews. Not many interviewers asked me directly to test my knowledge, but it goes a long way to understand how the industry works, how money is made in Private Equity, and the basic financial principles that underpin PE.  Many of these are not complex and you may already know depending on how much finance training (I was an engineering major so I had to brush up a lot of this ahead of interviews).  I would understand the difference between EBITDA and FCF and how to walk from one to the other (was actually asked this in an interview), as well as how to do a paper LBO.  I was expecting (and prepared) to have to do paper LBOs, but I didn't have an interviewer ask me directly in any interviews. Though there were numerous times where we were discussing a case and in my answers on how attractive the company was I was able to demonstrate I knew the drivers of value in an LBO (e.g., Topline growth, margin expansion, multiple expansion, amount of debt: Which were most relevant/feasible for this company, why, and what effect would that have on returns).  I would also try and get familiar with the world of that PE shop: What range of EBITDA multiple would be realistic for their deals, what approx. minimum IRR would they require for an investment, what does different M.o.M. translate to IRR over a 3 or 5 year investment hold period. I would not expect you to be asked anything overly technical and I did zero modeling tests for PE Ops, but it is always helpful if you can show you have a sense for what a reasonable EBITDA multiple is for an industrial services company if that is the profile of their recent deals. 

Of course you also have the standard fit questions around your story, why PE, why PE Ops, why that shop, etc

Hope it helps!

 

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