Transitioning from MM/platform model to LO/SM or even into growth equity/PE

Hi all,

Having a bit of an identity crisis and hoping the good people of the forum can help me out.  I'm a 2nd year analyst at a multi-manager L/S equity HF that I joined out of undergrad.  For background, I went to a target school, had a solid GPA/major, and took the job because I thought it would be the most interesting path into finance.  I do like my current role quite a bit, and so maybe this is "grass is always greener" thinking, but my main worry is that by doing MM HF so early I've closed off other pathways for my career.  I've found myself a bit more frustrated by some of the short-termism in our investing approach, and the latitude of companies we look at makes it hard to do deep fundamental research in a meaningful way sometimes.  I also think it would be interesting to be "closer to the action" -- learning more about company operations, turnarounds, etc.

Wondering how difficult it would be to pivot into a SM/LO, including some of the more prestigious opportunities like the tiger cubs (I've read on here that they basically don't look at anyone from MMs).  I figure if I were a 5+yr tenured analyst at an MM, it might be difficult to pivot, but given this is my first job out of college is there a chance that this could be looked at as akin to IB experience?  I'm also tentatively interested in some of the growth equity and even PE places, like TPG, but that might be a complete fantasy.  I suppose my question is whether it's possible to pivot/interview for these jobs, or if I'd need to go to B-School which would a laborious process (and I don't know how many MM employees B-School tends to accept).  Any thoughts from people in the industry or ideally anyone who has made the transition?  Also any thoughts on the transition in general; am I being too optimistic about what these funds look like and the opportunities they'd provide?

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Comments (10)

Mar 17, 2021 - 2:26pm

First of all, I think you'd be an interesting b-school candidate. Your experience would definitely stick out from the hoards of IB+PE and consulting applicants. 

I think transitioning to growth equity/PE will be difficult, given your lack of transaction experience. Most things you can teach yourself; actually executing a transaction is not one of them, unfortunately. 

It is definitely within reach to transition to a SM, though it will take a lot of networking and patience. SM roles don't open up all that often, so you'll need to be networking and talking with recruiters for likely a long period of time, and be willing to stay engaged in your current role until something great comes along. I think transitioning from a MM to a tiger cub is unlikely, but more because transitioning to a tiger cub from anywhere is pretty unlikely overall. 

Another option for you is to do a stint on the sell side and use equity research as a platform to network and identify SMs you want to work at. 

Good luck. 

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Mar 17, 2021 - 3:17pm

Don't disagree with anything you're saying about ER, it's clearly the least ideal option. I think it comes down to what headspace the OP is in - if they're worried about being at a MM for X+ number of years, transitioning to something else where they can still network while they wait for their next move might not be a bad option, even if it is ER. And as a plus, ER tends to be much less volatile. 

Mar 22, 2021 - 8:14pm

Thanks for the well-thought out answer!  Definitely makes sense on growth equity/PE, and though I may just be misunderstanding the role, don't they accept a lot of consulting backgrounds?  I don't think they structure transactions too often in consulting but could be wrong.  Agree on just waiting out the opportunities, though like the other poster said think I'd prefer to stay buyside -- bit of a black mark to "step back" so to speak

Mar 17, 2021 - 3:25pm

would try for growth equity, the transition seems possible as they can be more amenable to non-IB backgrounds. SM/LO funds, while some of the bias is true, may consider you as long as you are clear about why you want to transition. would rule out PE, never seen a way in without IB or serious connections.

pretty sure Wharton and Booth accept candidates from MM, but not sure about H/S. would probably have to talk about an interest in trying something outside of investing though...

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