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When it comes to tricking people on the Internet, one of the easiest methods is to write about “how to get into private equity.”
Not all these articles all bad; some have a few decent tips and tricks.
But most guides fail to disclose one important point: Unless you have exactly the right background, it will be an uphill battle to break into private equity.
Still, you’re probably obsessed with working at KKR or Blackstone, so I’ll explain the entire process from beginning to end – including why it’s so ridiculously hard to break in:
How to Get Into Private Equity: Your Brutal Reality Check
Whenever I write about this topic, we tend to get questions from non-traditional candidates who believe that their backgrounds will appeal to private equity firms. For example:
- Science or engineering PhDs
- Post-MBA investment banking associates
- Corporate lawyers
- World of Warcraft gold farmers
- Male strippers
- Mid-career corporate finance professionals
Unfortunately, you have a very low chance of getting into private equity from these fields.
Overwhelmingly, private equity firms hire:
- Investment Banking Analysts at bulge bracket and elite boutique banks, as well as a few In-Between-a-Banks
- Undergraduates for junior-level roles, such as Private Equity Analysts (common in some markets, such as Brazil and Portugal, and increasingly common at mega-funds and upper-middle-market funds in developed markets)
- Professionals who already work in PE at different firms
- And smaller firms also hire IB Analysts at middle market and boutique banks.
It is possible to get in if you’re not in one of these categories, but it is not probable.
If you get into the industry and you’re not in one of these categories, then:
- You’re outside the U.S. / U.K., in a market where it’s more feasible for non-bankers to get in. Examples include Russia, India, Central & Eastern Europe, and Portugal.
- Or you’re in a closely related field where you work on transactions – examples include Big 4 valuation/advisory, direct lending, corporate development, and real estate. Consulting might qualify, but it’s still a challenge in major markets.
- Or you’re aiming for new or smaller funds that do not have highly structured recruiting processes.
I’m not trying to scare you away, but I do want to be realistic about your chances.
What If You’re Not in Those Categories and You Still Want to Know How to Get Into Private Equity?
My top recommendations would be:
- Go for real estate roles, such as commercial real estate brokerage or real estate lending, and leverage those to move into real estate private equity.
- Consider corporate development careers instead of PE, especially if you’ve had prior banking experience. The pay is lower, but the work environment is better, you can have a life, and the work is similar. And you can potentially move into PE or IB from here.
- Consider the nuclear option: Attend a top business school, do investment banking, and then pursue exit opportunities as a post-MBA Associate. Not easy, but possible.
- Wait until you become much more senior and join a PE firm as an Operating Partner or Consultant. It’s not the same as working on deals directly, but you can still impress vapid socialites by saying “you’re in private equity.”
For the rest of this article, I’ll assume that you’re in investment banking or a related transactional role, or that you’re in a market where non-bankers can get in.
Private Equity Recruiting: On-Cycle and Off-Cycle Processes
First, note that there both on-cycle and off-cycle recruitment processes; they differ in timing, steps, interviews, and hiring criteria.
The On-Cycle Recruitment Process
The on-cycle process is the one that begins for Analysts at bulge bracket and elite boutique banks in New York within a few months of their start date.
It starts and finishes very quickly, with the mega-funds interviewing everyone and handing out offers in a single weekend, and middle-market firms finishing after that.
Headhunters have a ridiculous amount of power in this process, and if they don’t like you, you’re screwed.
If you finish the on-cycle process and win a job offer, the position will start in 1.5 – 2.0 years.
So, you may interview in December of 20X1, keep working in banking, and then begin the PE role in July or August of 20X3.
The Off-Cycle Recruitment Process
The off-cycle recruitment process is for everything else:
- roles outside of New York
- roles in other countries
- roles at smaller firms
- roles available to anyone not working at an investment bank
In the off-cycle process, you start working immediately after winning the offer, which makes a lot more sense than waiting for 1.5 – 2.0 years.
Off-cycle processes tend to take more time – months rather than weeks or days – and interviewers evaluate your “fit” and critical thinking abilities in more depth.
Case studies and financial modeling tests in on-cycle processes tend to be time-pressured ones where you have to get the answer as quickly as possible, while the ones in off-cycle processes require more thought and a real investment thesis.
In some places, the typical process is in between these extremes.
For example, many headhunters in London begin contacting candidates a bit later than in NY, and they present both “start immediately” and “interview in advance” opportunities.
Larger London funds stick to more of a set schedule, but it is not as structured as it is in NY.
Regional Variations in Private Equity Recruitment
In markets outside the U.S. and U.K., the interview questions and case studies or modeling tests tend to be similar.
However, the process, timing, and candidates all differ. The industry size and deal focus may also be different.
To give you a specific example, take the private equity market in Brazil.
The main differences vs. the markets in the U.S. and U.K. include:
- The industry is far smaller – total PE deal value is around 5% of the total deal value in North America. As a result, there are fewer firms and fewer positions.
- Growth equity deals are more common than traditional leveraged buyouts; EBITDA growth, rather than financial leverage, drives returns.
- PE firms still hire a lot of former bankers, but you can also join as an undergraduate, do a part-time internship, and convert that into a full-time offer. This move is less common in developed markets.
- The process is far less structured, and almost every firm uses off-cycle recruiting. Headhunters have significantly less power, and you can network your way into interviews more easily. The entire process might take from 3 weeks up to 3-6 months.
- Technical questions and case studies are similar, but you’re more likely to get growth equity cases that involve 3-statement models with minimal leverage rather than traditional LBO models…as you see in this Atlassian growth equity case study.
I’m highlighting Brazil because many of these differences also apply to other emerging markets, such as China, Russia, and India.
In fact, they may even apply to other developed markets that are smaller than the U.S. or Europe.
Even though the process is less structured, it does not necessarily mean that you’ll have an easier time as a non-traditional candidate: there are also fewer firms and fewer positions.
What to Expect in the On-Cycle Process
We published a detailed article about on-cycle private equity recruitment, so I’ll link to that rather than repeating everything here.
To summarize:
- you start working in August as a first-year IB Analyst.
- Within months of that, headhunters, such as CPI, Dynamics Search Partners, SG Partners, Henkel, Amity, and Oxbridge, begin contacting you.
- Then, you’ll schedule your first meetings with headhunters, and you’ll need a very specific idea of the PE firms you’ll pursue (industry, geography, deal type, and size).
- You will have almost no real deal experience by this point, so you’ll have to spin pitches and early-stage assignments into sounding impressive.
After that, you’ll get invited to networking events held by PE firms.
The mega-funds kick off recruiting on Friday night one week, interview each candidate 4-5 times over the weekend, give each one a 2-hour modeling test, and notify the winners by Sunday/Monday.
After that process ends, middle-market funds start and finish recruiting; they still tend to conduct 4-5 interviews and one speed-based modeling test, but they take place over a longer period, such as a week or several weeks instead of 48 hours.
The frustrating part about on-cycle recruiting is that headhunters have a ridiculous amount of power, and they use tunnel vision to filter and recommend candidates.
- If you worked in FIG, good luck winning interviews at tech-focused growth equity firms – even if you mostly worked with fin-tech companies.
- If you worked in Oil & Gas in Houston, good luck winning generalist roles in NY.
- Also, if you’re not at one of the top banks in a solid industry group – rather than ECM or DCM – and you don’t have an elite university and good GPA, it will be tough to win interviews.
You can practice discussing your deals and building LBO models, and it certainly helps.
But your fate is determined based on events that took place years ago, like that Chemistry final you bombed in your first year of university.
What to Expect in the Off-Cycle Process
The off-cycle recruiting process is the opposite of the on-cycle one:
- Headhunters have little power here; if you’re a non-traditional candidate, headhunters will barely pay attention to you.
- Rather than picking firms based on specific criteria, you should spread as wide a net as possible because the companies that show the most interest may be completely random.
- Rather than starting and finishing in 48 hours or 2-3 weeks, off-cycle processes can last for many months as you meet everyone at the firm multiple times.
These processes are all about your own networking efforts, including LinkedIn/email and any referrals you can get from co-workers, former co-workers, and alumni.
In the on-cycle process, if you have TMT experience, you pretty much have to target TMT-focused PE firms in your area with an AUM between $XX and $YY.
But in the off-cycle process, this would be a mistake: It’s far too specific a goal, and it will artificially limit your options.
Instead, find every boutique and middle-market fund you can, and reach out to Senior Associates and Partners at these firms to present yourself.
Competitive tension is incredibly important because the first question anyone will ask you is: “Who else are you speaking with?”
If you can’t name several other, similar funds, the person will immediately lose interest in you.
Even if you’ve just exchanged emails or LinkedIn messages with someone, spin it into sounding more important: “I’m currently speaking with Firms X and Y, and I have an interview with Firm Z tomorrow.”
You can call informational interviews “interviews” because they do turn into real interviews.
There isn’t necessarily an ideal time to start this process, but you may want to wait until the on-cycle process is done; smaller firms may not even pay attention to recruiting until then.
Private Equity Interview Questions and Answers
Private equity interview questions fall into five main categories:
- Category #1: Fit/Background – Why private equity? What do you know about our firm? What are your long-term goals, and how do we fit in? What are your strengths and weaknesses?
- Category #2: Market/Industry – Which industries do you find interesting? Which companies would you invest in? Which markets do mainstream investors view incorrectly? What makes a market appealing or not appealing?
- Category #3: Technical Questions – These are similar to investment banking interview questions, but sometimes there’s more ‘critical thinking’ involved. For example, they might ask you why two companies with similar growth profiles and margins might trade at very different multiples and what it means for their investment profiles.
You’ll also get questions on tests of mental horsepower, such as “quick IRR math” for leveraged buyouts [Tutorial Video].
Questions will not be exclusively limited to LBOs. Accounting, valuation, DCF models, and even merger models could still come up.
- Category #4: Deals/Clients – You’ll have to walk through at least 1-2 deal/client experiences in-depth, explain what you did, and point to the value you added. Did you find a major mistake in due diligence that saved your client money? Did you find a way to position your client that resulted in new buyers or more qualified interest?
You should also prepare critical views of all your deals: If you were a PE firm, would you have acquired your client? Why or why not? Interviewers often turn your deals around and ask questions like that.
- Category #5: Case Studies and Modeling Tests – Modeling tests can range from 30 minutes (“paper LBOs”) up to 1-3 hours, or even several days to a week.
Types of Modeling Tests
The main categories of modeling tests are as follows:
Very Quick Tests – They might give you 30 minutes and ask you to build a simple LBO model in Excel. Or, they could go the “paper LBO” route (see the link above) and ask you to approximate the IRR using pencil and paper.
Intermediate Tests – These could last from 1 hour up to ~3 hours; you’ll build a real LBO model in Excel, but you may not necessarily build a full 3-statement model. You could easily get away with a cash flow-only model, especially for a 1-hour test. You could also make simplifying assumptions such as using a cash-free debt-free basis.
- Example: Check out this LBO Model Case Study on YouTube.
Take-Home Tests – These are the most difficult ones because you need a real investment thesis, risk factors, and decent industry knowledge.
- Example: This Dell LBO case study is a good example, but the model itself is far more complex than what you normally build. Focus on the short presentation at the end.
You might have a few days up to a week to complete a test in this last category.
Even though you have 10x more time, you should not build a 10x more complex model; spend that extra time learning the industry in-depth and coming up with a solid thesis.
How to Get Into Private Equity: Winning Offers
Most candidates focus far too much on the modeling tests and technical questions and not enough on the other question categories above.
That is a big mistake because private equity interviewers, like investment banking interviewers, ultimately make decisions based on cultural fit.
Yes, you need to know how to build a model, write an investment thesis, and answer technical questions, but those are more like boxes they have to check than anything else.
That is especially the case in off-cycle processes.
The formula for success looks like this:
- You Can Answer Technical Questions and Build Models Relatively Well – Good! Extra bells and whistles mean less than getting the fundamentals right.
- You Have Good Reasons for Wanting to Be in the Industry – For example, you have a long track record of investing, you analyze industries for fun, and you have strong views on companies and deals. You’re not just doing it for “improved hours and pay.”
- You Have Added Value to Deals and are Capable of Running Deals – No one will hire you if they have doubts about your ability to work independently.
- You Pass the Airport Test – You will be in airports a fair amount, so the Partners and other team members must want to spend time with you.
So You Win a Private Equity Offer: What Next?
If you reach the end of the process and win an offer, congrats!
You should accept it, especially if you won it through an off-cycle process, because your chances of getting into PE are just barely above being struck by lightning.
You could attempt to shop it around and win other offers, and sometimes that will work, especially in the on-cycle process.
But unless you have a really, really good reason for doing that, it’s best to accept your results.
No Offers: What Now?
If you go through the entire process and you don’t win offers, you need to figure out what went wrong.
- Did you not get enough interviews?
- Could you not tell your story effectively?
- Did you fail the technical parts and case studies?
- Did you not have relevant enough experience?
Once you’ve pinpointed the problem, getting brutally honest feedback if necessary, fix it.
You might fix these problems with a different approach to networking, business school, more practice, or a “steppingstone” role, such as Big 4 valuation/M&A, first.
Final Thoughts on Breaking Into Private Equity
Truthfully, the PE recruiting process does not require much intellectual horsepower.
It’s not that difficult to build an Excel model quickly, plan out your story, or prepare deal discussions.
You’re not building rocket ships; you’re doing arithmetic.
The biggest challenge is that many people go into recruiting without a clear idea of what firms are looking for, what your background must look like, and the proper strategy to use.
Get those right, and you might just avoid being tricked on the Internet.
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If you enjoyed this article, you may be interested in:
About the Author
Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.
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Hello, Could I ask if getting into private equity from the insurance & reinsurance company is possible? Assuming both company’s locations are within Wall St.
For instance, having property valuation experience and risk management for underwriting in a famous insurance company, also working with Blackstone for property valuation of their insured collaterals.
Do you believe these experiences can make it possible to move for Private Equity (especially in areas like real estate, infrastructure, or insurance)?
What about moving to other kinds of investment companies like Blackrock or SWF?
Good question. I’m sure that some people have gotten into PE from an insurance or reinsurance background, but I’m not sure how common it is because most insurers tend to focus on public markets investing (stocks/bonds) rather than deals and control acquisitions.
I think you have the right idea with focusing on something like real estate or infrastructure where sector knowledge/specialization counts for a lot, so that is probably the best approach. Blackrock and SWFs might be harder unless, again, you focus on something like RE or infra where the specialized experience is important.
Hi Brian – unsurprisingly another amazing article. May I pick your brain for a quick min? Asking because I must say that was kind of a reality shock
Im Brazilian and want to relocate to London within the next 1-2 years. 3,5yrs experience in a very small M&A boutique (max trx size closed ~USD 200mi) but which was also sponsor of an unsuccessful Latam SPAC (reason why I stayed for so long, along with the amazing relationships). Always reported to MDs (former bulge-bracket Latam heads) as kind of sole junior person in the team responsible for models, materials, etc so got deeply comfortable reading and building them.
Im definitely untraditional but that said I did have a chance to analyse 90+ targets (obviously not all that in depth) and conduct a few DDs on the Spac front (which has been our #1 effort over last couple yrs). Comfortable with high-level market/company discussions and can elaborate on why a number of our target deals didnt work, granted I have time to revisit and prepare in advance
Engineer from top #1 school in Brazil with a double degree from very premium eng school in Europe (very solid education-wise unless recruiter is ignorant on relevant schools abroad)
2 questions: (1) is it realistic for me to take shots at off-season London linkedin positions ? (I read the London PE article which btw is just as thorough as this – thanks) and (2) do you think a stepping-stone strategy, transitioning to PE while still in Brazil to only then aim at UK based positions after say 8-14 months, would make sense/be my best shot ? (Considering you emphasized both in the article and in some of the answers that the earlier the better for that transition to take place)
Again, thanks so much for the insightful info you always put out here and hope to hear back soon. Cheers!
I think it will be very difficult to go from a boutique bank in Brazil directly to any type of PE role in London, especially if you’re applying remotely. You would be better off doing one of the following:
1) Win a PE offer in Brazil at a larger firm that has a presence in other countries and ask about transferring to London/Europe after a year of working ther.e
2) Transfer into IB in London, gain some experience there, and then use it to recruit for PE.
Do you think they would ask case study and model questions if your are trying to just get an internship at PE?
It’s unlikely unless you have marketed yourself as having had deal experience.
Hello Brain,
Thank you for this helpful guide.
I want to get into PE so I need some advise from you. I have 2+ years of experience in finance companies including Big 4 (EY) as an Analyst. Currectly, i am doing my postgraduate Finance MSc course in the UK. I will be graduating this September 2022. I will be starting my job application from April 2022 onwards. I am bit worried about interviews and i have no clue which part of the interview is more important and how i should be prepare for the interview.
I would recommend reading this article about the PE recruiting process in London for some tips:
https://www.mergersandinquisitions.com/london-private-equity-recruiting/
The process is quite different there, and you normally need a few years of IB experience first to have a good shot. Some people do get in via Big 4 experience, but banking is still the recommended path in.
Hi Brian,
If I am an analyst at an investment bank, what are my chances of getting into a PE firm in Los Angeles? What pathway is there for me to do this?
Thanks
You’re not giving me any real information, so I can’t answer your question. This is like asking, “I want to apply to a university in California. What are my chances of getting in?” I can’t say because I don’t know your grades, activities, recommendations, test scores, goals, etc.
If you want an answer, please describe where you’re currently working, your geography, undergrad GPA/school reputation, deal experience, etc.
Hi Brian,
I currently have an offer for a training contract at a magic circle law firm in London which is known for its PE work. I was wondering what the chances I would have are of transferring from there into a PE firm, assuming I can get all of the requirements down. Would it be most likely that I enter through a client I have been working with through my work as a lawyer? Would applying to mainland Europe (France/Italy) change my chances? I can speak both French and Italian and wouldn’t mind moving there at all.
Thanks
I think it would be quite difficult to move directly from corporate law into PE, even in the U.K. or continental Europe, where more non-bankers get into PE. The problem is that you’ll still need deal/transaction experience and some technical/modeling skills, and PE firms want you to have those moving in. I’m sure people have made this transition before, but it’s far less common than going from IB or consulting into PE.
It would be easier for you to join a large bank first and use that experience to get into PE.
I’m currently a post MBA associate at a bulge bracket bank. I don’t have prior banking or PE experience. I want to move to PE (US or Europe) after a couple of years. What’s the right strategy to plan ahead for this?
See: https://mergersandinquisitions.com/investment-banking-associate-exit-opportunities/
In short, act quickly, and be prepared to do a ton of networking yourself because headhunters will not proactively contact you.
Hi,
I’m heavily considering doing an MSc in Finance. I have 5 years work exp in civil engineering, having graduated from top 3 uni in UK. I prefer the MSc route to MBA primarily because of the big cost difference; to get into IB from MBA with my exp you’d have to do it in US (hence large cost, UK would’ve been more affordable). From that platform an option is to get into IB (off-cycle internship first I’d image) and then try for PE. In one of the below comments you mention years of work experience could be an issue. Is the fact I have the 5 years exp in another industry a problem for the above route?
Thanks
I don’t think you can use an MSF to get into IB if you already have 5 years of work experience. You’re over-qualified for Analyst roles, but under-qualified for Associate roles, so banks would not know what to do with you. You might be able to use the MSF to win other finance roles that do not care as much about work experience (maybe something in Project Finance or Infrastructure since you did civil engineering?), but I think you would need a top MBA to have a realistic shot at IB roles at this stage.
Thanks for the response. Would you say that MBA should be from the states? Or would somewhere like Saïd or Judge also work? I think personally it would have to be from states, as they have a more structured route for MBAs into IB. Whereas in UK I dont think it really happens?
The U.S. has the best-developed MBA recruiting, but something in the U.K. or Europe could also work (but more luck involved).
Hi Brian, thanks for all the answers so far.
I just started as a PE Associate for an LMM fund. My eventual goal is to become a partner at a similar level fund or lateral into UMM (which I hear is very difficult) I know there are so many factors that go into this question, but what would you place the odds of eventually becoming a partner after MBA? From what I’ve heard from friends, they weren’t able to get back into PE post mba even if they wanted to. Is it truly that competitive?
I really just want to grind to partner to build that generational wealth and this is a risk averse way of doing it. However, it seems like according to the Heidrick and Struggles PE comp reports, LMM PE partners are making a few million a year. Certainly nothing to scoff at, but far from generational wealth. What are your thoughts? Thanks!
Yes, it’s very competitive because PE Partners rarely leave willingly. It’s not like banking where people easily get burned out, even at the MD level, because of the constant need to bring in deals. I think you should probably re-think your goals if you want to build “generational wealth” because PE is a long and difficult path to get there and requires a lot of luck as well… certainly not risk free or even low risk.
Hi Brian,
Thank you for the article. I am a 1st year IB analyst at a BB in Hong Kong. While I’m planning to move to the UK in the next 3 years or so (without a BNO/BC), I wonder about my chance of getting into a PE in London. I have several questions in mind:
– Does any of the local funds consider APAC IB background as a plus?
– Do I have have a better chance to break into UK IB first before shifting to PE? I am thinking about internal transfer/experienced hire
– Will studying a master/MBA there help with my PE application?
– Will learning a European language help?
– Any action I should start now to maximise my chance?
Highly appreciated if you could advise me on these. Thanks in advance.
We published an interview about this topic recently: https://mergersandinquisitions.com/london-private-equity-recruiting/
You have a better chance if you work in UK IB first. The HK work experience is fine, but they generally value European languages/deal experience more than Asian ones. I don’t think a Master’s or MBA will help unless you use it to transfer to the region, which seems pointless because you could just do an internal transfer.
Learning a European language will help, but you need to be at a very high level for it to be useful (i.e., you can write 50-page documents without using the dictionary and skim long and technical documents).
Hey Brian, The Excel file of 30 minutes LBO is not available. Only PDF is there. Can you share the excel file link
There is no Excel file for it. It’s a “paper LBO model,” meaning that you’re supposed to sketch it out on paper to solve it.
Is it feasible to pursue on-cycle PE recruiting as a lateral MM to BB IBD analyst?
As in, if you have already switched and started working at the BB? Sure.
What if you only got to BB IBD after 2-3 years at another job (think corporate banking or something), so your CV already has too many of years of experience, given now you are Asso 1/2 (repeated a year or two to get into IB from CB) at the investment bank, and PE shops aren’t interested in you.
Lateral hires at your level – > wants PE experience (or minimal investing)
Fresh incoming PE asso -> they want analyst 2 or 3 only
Tried networking and such for some time, but no traction given you’re kind of in no man’s land..
Does going to a top business school work? ie. to move from IBD to PE (or even SWF, long only, growth equity..).
I don’t think business school would help much in this case because you’re already an Associate. Your best bet is to go much smaller and target boutique PE firms that don’t necessarily care about your years of work experience. Even MM PE firms might be a stretch because Analysts still tend to fill most of those roles. Another option might be to forget PE for now and target corporate development roles instead.
Got it, thanks. Let’s say I am able to get into a family office or a small boutique PE but wanted to move to a MM PE or something better later. Would you think MM/MFs are completely out of the question, or would you consider going to a top 5 MBA with prior investing experience so you could recruit for MM/MFs at the MBA (which i understand do exist, but are extremely competitive and rare, unlike consulting)
An MBA still doesn’t help in this scenario because larger firms don’t do that much recruiting directly out of those programs. I don’t think you’re going to move from a boutique PE firm to Blackstone or KKR, but you can move to a mid-sized firm. I think you need to ask why you want to do this – Money? Prestige? More interesting work? You can accomplish any of those in different ways. You don’t need to work at one of the mega-funds, and, in fact, I expect them to under-perform and eventually disappear or become less relevant (along with most of the finance industry).
hi there
after spending 14 years in risk management and fin tech space working as an independent consultant for various tier one banks, i want to switch to PE. i have an undergrad degree in economics, master of science in finance and also have FRM certificate. do you have any suggestions ? i know it is extremely hard to switch paths after 14 years but just want to do something different that is more closely related to investments rather than risk models.
I think your best bet is probably to aim for a growth equity firm that invests in fintech companies or ones in the risk management space and come in as an operational expert. Maybe look at PE firms that invest in financial services as well and see if there’s an opportunity for operational roles there.
Hi Brian,
How hard is it to break into private equity from a nontarget? Should one aim to get a junior year PE summer analyst position or a bulge bracket IB summer analyst position then recruit for a FT PE analyst position afterward?
Thanks
Directly out of undergrad from a non-target? Almost impossible. See: https://mergersandinquisitions.com/private-equity-analyst/
IB is a much more viable path coming from a non-target school. And then move into PE.
Hi Brian,
Thank you for your time and effort.
I am a junior undergrad management student in a top university in my country, I am also doing a finance internship in a multinational company before applying to IB’s for my senior year. I was considering to learn about possible applications of AI and machine learning in PEs and IBs. I have relevant skills in relevant programming languages. Do you think in future these applications will be in demand in these firms? Will they value these kind of trades when recruiting? Or it will take more time for recruiters to really consider these skills as promising traits for entry-level jobs?
Thank you!
Probably not. It might be a good talking point if you interview with a tech-focused firm, but you never use those technologies in IB/PE. Most recruiters don’t even understand them. Recruiting comes down to work experience, grades, and university quality.
Hi Brian
First of all, thank you very much for your time, effort and all the passion you have put in this website. I have learnt so much from your posts and I really appreciate it. I have a question.
I am trying to get a foot in IB or PE but I’m still feeling a bit insecured due to 2 reasons:
1. I’m now a current Masters student in Finance (with expected Distinction) but I have other 2 degrees MSc in Business Management and BSc in Marketing in the UK (I’m currently in the UK). I afraid they would reject me for having too many degrees. The reason being is I found my passion too late and I grew up in Vietnam where IB and PE are not well-known widely. I pursued the first 2 degrees due to family encouragement and I know that’s not a good reason enough to justify it. I am 23 with no gap in my CV so I think my age is still appropriate to apply for an Analyst position at either IB or PE.
2. I don’t have a lot of relevant experience. I was a business intern and marketing analyst intern and I’m trying to make it sound as much relevant to finance as possible. Therefore, I’m working really hard on my technical skills to make up for it. I had a Bloomberg training certificate and currently enrolling in an online self-study Financial Modelling course. I also participated in many extra-curricular activities.
I write to ask for your honest opinion, do I have a chance? And what else could I do to improve/ fix it?
Thank you very much in advance Brian. I have saved a lot of your posts on IB and PE on bookmark and re-read them over and over again. I haven’t found any blog or website that has a better insight into industries like yours. Please keep up the good work. I’m sure it has helped many people out there, including me.
Thank you again. Looking forward to your reply.
1) I would just find a way to downplay these degrees and list them all together, or at least combine the ones you earned at the same schools, if possible. Amount of work experience is more of an issue than age/degrees.
2) I think you’re going to have a very difficult time breaking in with that type of background because as of 2020, most students who get into these industries have multiple finance internships before winning offers. Your best bet at this point is probably to win some type of off-cycle internship at a small PE firm or bank and go from there. See:
https://mergersandinquisitions.com/private-equity-internship-to-investment-banking-networking/
https://mergersandinquisitions.com/how-to-get-into-investment-banking/#Path2
I am so happy that you replied to my question! Thank you so much for your straight-forward advice. Is it okay if I don’t include the first 2 degrees in my education? Instead, I focus on what I have achieved in this Master degree (grades, project, achievements) and the online Modelling course.
I also wanted to ask, as very few people has touched on this topic, do women in IB have to be (or act) “tough” or “aggressive” in IB in order to fit in?
Thank you again for your time and help.
I think you will have to include the degrees somehow, but maybe just act like they were combined as part of the same program. For the second question, please see: https://mergersandinquisitions.com/finance-networking-females/
Not necessarily “aggressive,” but you need to speak in a confident way that sometimes doesn’t align with traditionally gendered communication styles.
Hi Brian – One question for you: what specifically do you mean by this (especially as it pertains to being a junior banker)? “You Have Added Value to Deals and are Capable of Running Deals” – I’ve run into issues explaining this and it seems extremely important from my conversations with PE professionals (and how can you actually execute on it on live deals given short leash and limited exposure to clients/third parties in IB?).
Also, how can you intelligently convey that you’ve “run” a deal process when you’ve only been involved with parts of a deal process (for junior bankers, not VP level and above in IB)?
Thanks,
KEG
Most of the value you add will come from reviewing the financials/other documents, finding potential problems, and flagging them, or answering questions based on what you know of them. You just have to be creative when spinning it into sounding more important than it actually was.
For running a deal process, yes, maybe other bankers actually called the potential buyers or negotiated, but you probably had something to do with tracking the process, sending updates, creating new presentations, etc., so you could consider all of that part of the process as well. If you just observed what the senior bankers were doing, you can also point to that and say you learned the process steps by watching.
Do you have any idea which Megafunds have a generalist associate program?
Almost all of them? You almost always have to specialize in an industry or geography eventually, but you usually start out as a generalist unless the fund itself is specialized (e.g., Silver Lake).
Most funds at megafund shops are specialized (ex. I know Carlyle and TPG have consumer funds and as an associate you only cover consumer when you are hired into that fund). But are you aware of many megafunds who have generalist funds? For example, Carlyle’s long dated fund you cover all industries. Thank you, hope that was more specific.
OK, I don’t know, we don’t really track that information. For most people, winning an offer at a megafund is equivalent to winning the lottery, so there is not much focus/discussion of the in’s and out’s of how groups are set up at those places.
Hi Brian,
Great article, thank you very much.
I graduated in Business Engineering during my Bachelor, in Italy, and then I majored in Finance during my Master of Science, with top grades. After graduating I have been working at a Big4 firm, in Milan, in the M&A/Corporate Finance team, for almost 2.5 years now. I believe that my longer team goal would be to work in Private Equity. At the same time I am also strongly interested in making a move in terms of location, and the ideal one for me has always been London.
Over the past 2 years, while working at the big4 firm, I focused on applying for IB roles in London, both via applications and via headhunters, without receiving an offer so far. From my personal experience, I realised that chances to be considered for IB roles coming from a non-UK big4 firm are actually not as high as expected. I took part in a few hiring processes, yet they did not lead to any offer because of a higher focus on profiles coming from banking or, in some other cases, because banks/boutiques made a step back on their hiring needs (especially over the past year, where the demand on the market of IB profiles had a slowdown).
At the moment, I received an offer from a “small” (in terms of people working there) PE firm in Milan (almost $1bln of AuM), and is one of the most active at the moment on the Italian market.
It’s a very good opportunity in order to break into the PE italian market; on the other hand, I still have the same goal to move to London. In addition, I think that on the longer term I would be interested in moving to a larger PE firm (I am not referring to Tier1 PE firms like KKR, Blackstone, etc.).
What would your recommendation be in relation to this? Will I have a higher chance to enter the PE UK market starting from this opportunity at the PE in Italy? Or would it be better to keep trying for banking roles in London and then swtich to PE from there? Or should I even consider making an even stronger effort to move internally within the big4, at the London office (although it does not seem easy)?
In particular, in order to have better chances to enter larger PE firms or good names with a middle-market focus, what would be the best move to reach these?
In case you would recommend to start at the PE firm in Italy, what would be the minimum amount of time I should spend in order to have a reasonable chance to move to PE firms in London, and, in case, what would be the appropriate way?
Would a MBA be an additional way worth considering, in order to make the move I am looking for, or, once entered PE industry, it would be preferable to stick with it?
Thank you very very much in advance!
I would accept this PE offer in Milan. The longer you stay at the Big 4 firm, the harder it will be to move into both PE and IB. So if your long-term goal is one of those, move over as quickly as possible. Work there for a few years and then aim to move to a larger PE firm or bank. An MBA isn’t necessary if you do it that way.
Hey Brian,
I graduated from a 5 year bachelor degree in civil engineering, however, I never had passion for engineering and I’ve always wanted to work in finance. so my research led me to one conclusion, that studying for the CFA and gaining relative experience would help me break into the industry I like. So i finished CFA level 1 December 2018 with my score being almost within the top 10% worldwide. I was able to spin off my story and gain internships in corporate finance position working on capital budgeting and rationing, i was able to land an analyst internship in an Asset Management firm, where I was working on analyzing selected stocks and there interaction with the portfolio and trying to find the best portfolio that matches our clients needs. Then I was able to reach my goal and dream opportunity, which is being a junior private equity analyst intern in one of the major national banks in my home country, Egypt.
My dream is to work in PE in the Canadian Market, so I targeted a top business school in Canada and I was accepted in Queen’s University’s MFin Program graduating 2021. My plan is to finish the MFin program, while finishing level 2 and 3 of the CFA. And since I am so interested in Alternative Investments and private equity, I am considering also tackling the CAIA while I am doing the masters program. Even though when i finish the master’s program I will have around 1.5 years of experience in Egyptian market in addition to CFA and CAIA, not to mention I am already improving my financial modelling skills to the max, I was still told that I cant have a PE analyst job postgraduate because it is extremely tough to break into PE in Canada and that I don’t have Canadian experience.
I was wondering does my plan sound legit? If not, what do you recommend doing to be able to work at one of the top PE firms in Canada like Onex, Birch Hill Equity Partners, Novacap Investments and CI Capital Partners for example, what should my plan realistically be?
Thank you for your prompt reply and help!
I think it will be extremely difficult to win a PE offer in Canada, given the work/visa situation there. See: https://mergersandinquisitions.com/investment-banking-private-equity-canada/ and https://mergersandinquisitions.com/canada-corporate-finance-jobs/
You might be able to do it under the “skilled immigrant” visa category, but even there, some type of corporate finance role is more likely.
I don’t think another level of the CFA or the CAIA will help at all because getting into PE is almost 100% work experience and education and networking. And yes, the lack of Canadian experience and citizenship will count against you.
If you want a good chance of working at any of those firms, you will need to sort out the work visa situation first (which we cannot advise on), and then you’ll most likely need to win an IB role in Canada, which is also very difficult because it’s a small market (see: https://mergersandinquisitions.com/canadian-pension-fund-jobs/).
They’re going to discount experience in Egypt because the assumption, right or wrong, is that you don’t do as much “real work” in emerging/frontier markets.
Hi Brian,
Thank you for your reply! I have checked the links provided, however I am still hesitant about couple of points. What is the best course of action to reach my goal? Given that after the Masters program I will have a full time work permit. should i try working in pension funds then make the jump? or should i target investment banking and then consider the shift to PE?
Putting the work permit and Visa aside, which path do you recommend? and what exactly should i do along the path you will recommend to reach my goal as fast and efficient as possible?
Thank you!
If you can work in Canada afterward, then I think you’ll need to target IB firms first before considering either pensions or PE. If that doesn’t work out, then maybe you can think about Big 4 TAS groups (or similar) and apply from there. But I don’t think pensions or PE firms in Canada are going to give you “full credit” for your experience in Egypt.
The path is pretty simple: gain internship experience in Canada before/during the program, target IB roles out of the program, if those don’t work, go for Big 4 roles, and then recruit for PE firms or pensions after that.
Do you have any recommendations for Associate investment bankers who are looking to move into PE?
Please see: https://mergersandinquisitions.com/investment-banking-associate-exit-opportunities/
Hi Brian,
I know it’s best to be specific with the roles you’re looking for, but is it acceptable to tell different recruiters different preferences and to give different roles a shot without appearing uncertain to any one headhunting firm.
Thanks
If you can keep them all straight in your head, sure, but in practice, it’s quite difficult to interview for multiple different roles if you are already working full-time. So I don’t think this is a great idea in most cases.
Hello Brian
Thank you for the great article. I am exactly one of those above trying to break into this industry. I have an upcoming test next Wednesday, in which they will test me about an “aptitude test” that takes 1h45min. My role is the Post-Investment analyst, implementing projects coordination, working with management teams of portfolio companies, building strategy plan & implementation and other relevant tasks to grow the investment value that PE firm has injected. I am wondering whether this test is a set of behavioral question or some kind of valuation model? I am really from outside the industry, so honestly I have no idea what that is. Any idea that can clarify this? Really appreciate your advice. Thanks in advance.
I would guess it’s some type of behavioral question test because you don’t really need to know valuation or technical skills in the same depth if you’re doing project management for portfolio companies.
Hi Brian,
Great article. As I know that bankers work 80-100 hours per week, when do analysts find time to prepare for PE interviews, especially for the on cycle ones since they start so soon after analysts begin working? Do they just prepare in the office, or is that not risky if senior bankers notice? Of course these interviews take a lot of time to prepare for.
It’s tricky to find the time in some cases, but remember that there’s also a lot of downtime in banking where you’re waiting around for work assignments… so it’s not hard to discreetly practice modeling tests and case studies in that downtime. It will just look like another Excel or PowerPoint file to anyone walking by. It’s more difficult to prepare for your deal discussions because you’ll have to heavily spin pitches into sounding like deals.
Hi Brian,
Thanks for the insightful post on breaking into private equity. I just want to get your thoughts on a role at a PE firm that I am currently being interviewed for.
It’s a post-investment management role, i.e. focusing solely on managing investments that the PE firm has made. Responsibilities include monitoring and reporting performance of investment companies to senior management and assisting on projects including working with consultants/ company C-suites on operational improvement projects and assisting on any fund raising or M&A processes, ie. add-on acquisition or exiting investments.
Is this a role that I can leverage to transition into an investment role?
Potentially, yes, but I would still probably rate that role as a less effective way of getting into a deal execution role in PE than, say, a job in IB where you work on deals. Even if a lot of the work is the same, the perception is that there’s a big difference between executing deals and managing portfolio companies. But if this is your best/most realistic option for private equity currently, you should take it.
I want to add that this is all in NYC
Hello Brian, thanks for all this wisdom and for your site generally.
My background: I’m a post-MBA (top 10), post M&A generalist at BB (2yrs in BB) and now 3 years as head of finance at fin-tech startup (25 people, ~$5M raised). Pre-MBA I worked at Big 4 audit in banking and capital market (got CPA, 4 yrs) and then at GS (controller, 1.5 yrs). I’m now looking to make the transition to PE. I’m working on spinning a fin-tech industry story (and that I wanted hands on experience from a startup’s perspective, dealing with investors) while preparing using the points you’ve made in this article and the post-MBA associate articles. However, I don’t have a very strong industry preference. I’m looking at smaller PE shops.
Question: I have some opportunities in the private credit team (that does occasional equity deals) within a small PE shop; will this experience increase my chances of landing a PE job later? Or, should I go for it now and try to land a PE job now. I am also trying to work some of our investor relationships for a PE role. I’m confident I can prepare for technical interviews and have two good deals to speak about from M&A days. My fear is that I have taken too long (5 years post-MBA) for this transition and don’t have a strong industry identity (latter may be remedied by preparation?). I do not have an ego around entry levels–I can go in as an associate. Any other thoughts will be appreciated! (Note I’ve read the post-MBA associate article but I’m posting this question here because you’ve answered questions here more recently.)
I would say you’re better off taking the private credit role now and then using the experience to eventually transition to the equity side. If you wait, it will only get tougher to move into PE, and 5+ years in other roles post-MBA is pushing it, even if you target smaller funds.
Hi brian, I have just completed PGDM in finance which is a 2 year course in India. How can i break into PE firms as analyst. Do i have to pursue any other courses like cfa for that. Suggest me some ideas to get in
Please see: https://mergersandinquisitions.com/private-equity-india/
Is there a fine line between a private equity associate and a private equity business development associate?
Maybe? I’m not sure, there are a lot of variations with job titles, and sometimes it’s hard to say without seeing the firm and job description. “Business development” usually implies that you do sales and partnerships, not investing, but again, it varies based on the firm and specific role. So we would need to see more information on this one.
Hi Brian, I recently landed a BB IB offer from a non-target state school background. I am just wondering will my nontarget school background come back to haunt me during PE recruiting even with a BB name on my resume? Thanks.
Yes, unfortunately, it could still hurt you even if you’re at a top bank. See: https://mergersandinquisitions.com/private-equity-recruitment/
“Also, your undergraduate institution, GPA, and bank name play a huge role in the process.”
You will still get interviews, but you will be at a disadvantage next to someone in the same group who went to a target school – just because they have very little to go on if it’s only a few months into your full-time role.
Hi Brian,
I enjoyed your article. It was very informative yet succinct.
I have a question regarding my current situation.
After working 2 years at a 2nd tier strategy consulting firm, I am currently working in Big4 M&A deal team as senior analyst. I am thinking (not decided yet) of pursuing MBA in the US with the purpose of entering US private equity sector (after graduating from top 10~20 university in the US, I came back to Korea).
Do you think lending a job in major US private equity firm with my background is a possibility?
I am also thinking of moving to 2nd tier IB, if possible, which in this case I must postpone my MBA plan by 2-3 years. If not, I may not pursue MBA as the value of US MBA is declining in Korean market.
Thanks in advance!
I think it would be very tough to get into PE post-MBA in the US if you have not had IB or PE experience prior to the MBA. The market is too competitive and there are too few spots for most firms to take a chance on you if you haven’t directly relevant experience before.
Hi Brian,
I transfered from a non target university to a target university for my masters degree. To get some experience in IB/PE I am currently trying to get a side job in PE. How well do you thinks a side job in PE is regarded in comparison to an internship in the same field?
Kind regards,
Nick
About the same? If by “side job” you mean “school-year internship,” it would be viewed as similar to a summer internship.
Thanks! I indeed mean a school-year internship. It would be around 16-24 hours per week, which I would do besides my masters degree.
Brian,
Curious your thoughts on people attempting to jump from an allocator role to PE or a hedge fund for that matter. I started straight out of school at billion + university endowment that runs a more coinvest model. Ideally I would make the switch to a lower middle market PE shop for more direct transaction exposure but it’s rare that I ever see allocators spoken about on forums like this. I am currently interviewing for a smaller “hedge fund” and wondering if that would be a better place to transition to PE or if I should try to get there from my current role. Thanks!
I don’t know enough about it to say much. But it is generally difficult to move from PE funds of funds to direct PE unless you happen to work on a lot of co-investments. I don’t think moving to a hedge fund would help you at all because you need to get M&A/LBO transaction experience to move over, and you won’t get that at the hedge fund unless the HF happens to acquire entire companies, in which case it’s not really a hedge fund.
Hi Brian,
I am working as buy side analyst for a mutual fund in Vietnam (my fund is considerably big) and pursuing CFA (currently level 3 candidate)
I also have several year of experience working for real estate, and manufacutring company before joining finance and banking field
Would it be possible for me to move to PE after awhile? Or what should I do to improve my profile attractiveness?
Thank you
It is tough to move into PE without deal experience. At a mutual fund, you don’t work on transactions, so the experience isn’t ideal for this transition. It would be better to gain experience in investment banking, corporate development, or even real estate private equity (by using your previous RE experience) so you can point to deals you’ve worked on.
Hello Brian, You have mentioned that it is often easier to move from top level IB firm to big PE firms like KKR, Blackstone. But how about moving from a smaller PE shop first then to larger PE firms?
It is possible, but more difficult than starting at a large bank and then moving to a large PE firm.
Brian, I will be working in an Alternative Energy Investment Banking Group at a BB in June. Most of the deal experience focuses on project finance for the acquisition of windmills, solar plants, geothermal plants etc. Do you think this type of deal experience would hurt me in PE recruiting as I would not have as much straightforward M&A experience? Additionally, by being in a group with a high focus on project finance would I not be recruited by headhunters? My group has a history of sending analyst to PE energy funds, however I’m not sure if this was by their own off-cycle networking or through on cycle recruitment.
Yes, it will hurt you in PE recruiting, and you probably won’t have a good shot at traditional firms. You could do infrastructure PE or something related to energy/infrastructure maybe. Headhunters will still contact you, but they’ll almost always present energy/infrastructure opportunities.
Brian, a few weeks ago I got an offer as a FP&A within a company which is sponsored by a PE, is there any chances to break into PE afterwards?
It would be extremely challenging to get into PE from an FP&A role because you do not work on transactions in FP&A. You would probably have to move to a role where you do work on transactions (IB, corporate development, etc.) first.
Would corporate banking be consider as “closely related” industry that one can easily break into private equity?
In theory, yes, but in practice, it would be quite tough. I interviewed one reader who moved from a direct lending role into PE, but it was a massive uphill battle, and I think corporate banking would be about the same. You’d have an easier time if you moved into Leveraged Finance or an industry group at a bank first.
Thanks Brian! If you got to choose between a mid-market investment bank, and a big bank’s Corporate Finance (say JPM, MS or Citi) what would it be?
I would say the mid-market investment bank because in either case, you’ll have to move elsewhere to access recruiting at the top PE funds, but at a mid-market bank, you at least have access to smaller-to-mid-size PE funds. Whereas in corporate finance, you wouldn’t to the same degree, even at the large banks.
Hi Brian, I was wondering how headhunters contact you. Do they do it through LinkedIn or your bank’s email?
Thanks!
Email
Thanks so much. How do they know your bank’s email? Would they guess through your LinkedIn?
They can easily get lists of employee names from banks, or just guess based on the email format of the bank and LinkedIn
Got it thank you.
Hello,
Your mentions of Portugal/Brazil/C&E Europe being easier to break into is interesting. Have you released an article on this already, and is there any reason as to why it is that way? And what sort of language proficiency is required to break in?
https://mergersandinquisitions.com/?s=portugal
https://mergersandinquisitions.com/?s=brazil
https://mergersandinquisitions.com/?s=cee
I currently work as in professional service (big 4), specifically transaction advisory (due diligence – sell side, buy side, capital raise). My role title is Senior Consultant (equivalent to an associate in the UK) and wondering whether my background would appeal to a private equity firm?
Currently looking into self study/courses on modelling to boost my resume. Any thoughts?
Hi Brian,
Is it possible to get into a top PE fund from a top group in an American in-between bank in NYC? With decent GPA from a top 5 university.
Thanks!
Potentially, yes, but it depends on what you mean by “top PE fund.” Probably not the top 2-3 but maybe one of the top 5-10.
Hi Brian,
Thanks a lot for your help! Do you think it makes sense for me to try to lateral to a BB or elite boutique during my first year and wait for another year to recruit? If I don’t care about waiting for another year. If I decide to stay at the in-between bank, do I need to network with headhunters more or should I reach out to associates and senior people at PE firms?
Thanks again for your help!
No, I don’t think it makes much sense to make a lateral move. The slight advantage isn’t worth another year spent in banking. Yes, you’ll have to do more networking at the IBAB, which means mostly headhunters but also some on your own.
Hi Brian – thanks for your help and this article. Currently weighing a few options and wanted to consult your opinion – if I wanted to go into MF PE or business school later, which do you think is better: Citi NY M&A or MBB? How do you think the former option compares to GS SF (not TMT)?
Citi NY M&A, easily. I would also rank it above GS SF non-TMT, but closer in that case.
I like the team, but I’m worried that my exit options won’t be as good as MBB. Would Citi M&A feed into MF PE? Some people on wso say because its not GS/MS/JPM that people probably go into MM funds. Others have also said consulting work would be more thought provoking, while banking gives you solid financial skills. I read your article on consulting vs banking but am still incredibly torn. Which do you think is more prestigious / how much does that prestige matter?
It’s notoriously far more difficult to get into PE from any type of consulting firm, even the top ones. Take a look at the “Team” pages of all the PE mega-funds and count how many people come from large banks vs. MBB, and it will be at least an 80% / 20% ratio (or even more lopsided).
People on WSO are mostly high school / university students and don’t know anything. You can easily verify this by searching LinkedIn or the official Team pages of PE firms. It’s true that the top 3 banks give you more options than Citi in terms of PE, but plenty of Analysts from Citi end up in the industry at larger funds.
Hi Brian,
Thanks a lot for this informative article.
I landed an interview with a Real Estate PE firm, the first round is already with 2 MDs. My background was from BB Real estate equity research.
1) I was wondering what will be the focus of this interview? Do you think it will be fit/behavioural focus or technical (given these guys are very experienced and my background was from this industry)?
2) Why PE? I thought about this question, I want to say “I like to be an investor in the long-term, rather than an advisor, learn about operations and I am excited in “making in impact” (deal driven)…”. But I can see follow-up questions will be asked, such as, “Why not hedge fund/asset mgmt/IBD?”, “real estate PE is not like other PE, which you get to sit in the board or affect operations…”…Is there another angle to spin the story better?
3) Any materials on co-investment/club deals?
Thanks
1) They will focus on why you’re making the change and ask you to discuss the industry, how you think through real estate investments, and so on. Probably no case study at this stage.
2) Say that you like the industry from your previous experience, but you want to make a longer-term impact on properties instead of just following REITs, REOCs, etc. and making occasional recommendations. You always think of opportunities for renovations/acquisitions/developments, but are fairly removed in research, and you want to be more involved with the granular details going forward.
3) All we have on real estate is here: https://mergersandinquisitions.com/commercial-real-estate/
Hi Brian,
Thank you for the helpful article. I have just started my Investment Banking Analyst position at JP Morgan in there Diversified Industries Group in Chicago. I was wondering how recruiting would work for me. I understand I am at a great bank, but does being in Chicago limit me to only off-cycle recruiting? Do you have any specific recommendations for people in a regional office?
Thank you!
You will be contacted by recruiters, but there won’t be as many opportunities as there are in NYC. You can still gain access to some if you are proactive enough, so start speaking with 2nd year Analysts and anyone else you know who has gone through recruiters and get direct referrals.
Hi Brian,
Great article. I am in somewhat of a unique position so I am trying to figure out the best path into PE and thought you may be able to help me out on this. I am currently working FT at a valuation consulting firm while pursuing my MBA PT (nights) at a highly regarded (though not ivy league) B-school. Once I am done with the program I will have roughly 3 years of experience in valuation.
Should I try to make my way into IB prior to seeking out opportunities at PE firms, or do you think my experience in valuation will be sufficient? Thanks!
You don’t have a good chance of moving directly from valuation consulting into PE, so you will probably need IB experience or something that’s more transaction-related first.
Great article! I’m in my last year of undergrad and have two choices
1) MBB
2) Big 4 CF/M&A
Would Big 4 be a better choice for PE despite lower ‘prestige’ than MBB?
No, MBB is better for PE because of the brand name/reputation.
Where do second year bulge bracket IB analysts fit in to this? Are they able to participate in the on cycle process or is it closer to an off cycle process if you are a second year during recruiting season. Thanks
They can go through the on-cycle process, and some that do not get great deal experience the first time around do so. But you are taking a risk because you’ll have to hope you get a 3rd year offer. If you don’t get a 3rd year offer or there’s a high chance of not receiving one, off-cycle recruiting for a role that starts immediately is less risky.
Thanks, Brian makes sense.
I was also wondering about the comment you made on FIG analysts here. Is it really that difficult to make the transition from fin tech into tech-focused growth equity? My resume is exclusively FinTech and 2 of my 3 deals involve payments companies that are/were taking growth equity money. Is it a waste of my time to recruit for this?
You can try, but I’ve heard multiple times from multiple sources that it’s difficult, and I know from personal experience that headhunters tend to be obtuse. You might have a better chance if you go for off-cycle roles and skip headhunters.
Can you work at a PE fund if you are an IB analyst in Los Angeles?
Sure… there are PE firms in LA and on the west coast in general…
Does PE FoF count as transactional?
Depends on how many co-investments you work on…
Hi Brian,
Thanks for the post. I recently started networking with alumni who work at PE mega funds/IB bulge brackets in London. Our school is in a Continental European country where getting into PE right out of graduation is a little bit more common than the US/UK (usually through off-cycle internship and getting a return offer), but I don’t speak much the local language.
My goal is to get brand-name PE experience, either an internship directly or making the jump after IB full-time (hopefully). I already have an NYC boutique M&A internship under my belt. So far the PE guys have been more responsive, but as UK PE firms don’t usually hire interns, I wonder how I might leverage this network more efficiently?
Thanks in advance!
Plenty of smaller firms do hire interns, and if they’ve been responsive so far, I’m not sure what you’re worried about. See:
https://mergersandinquisitions.com/private-equity-internship-to-investment-banking-networking/
Hi great article. I am finishing my 2nd year out of 4 for a UK economics degree. I am only doing research over the summer as back in October I thought I wanted to do a PhD, (and there was no way I would have got hired as an intern in finance). I am going to try really hard to get a finance internship next year. I would eventually like to work in REPE. I would like to do something where you are trying to find undervalued illiquid assets, and where you don’t have to destroy your health working 100 hour weeks. 70 hours is fine with me. What division in a bulge bracket would be the best starting point? Investment management, Merchant banking or Reality Management? I have heard too many horror stories about IBD.
If that’s your goal, skip IB entirely and go straight into a real estate firm and then real estate private equity…
https://mergersandinquisitions.com/real-estate-private-equity/
https://mergersandinquisitions.com/real-estate-debt-funds/
Different types of pe firms have different recruiting process. I am heading to Shanghai for a 2 month M&A/PE firm in 2 months. I am amazed that they don’t ask me anything about valuation and financial metrics, but instead they focus more on my tri-lingual language skills and report writing experience. I guess in China those houses do deals on relationship basis like negotiating in the wet market in China.
Yes, that is true, but it’s not true everywhere in China… depends on the firm…
https://mergersandinquisitions.com/china-investment-banking-private-equity/
Hi Brian
What do you think of the prospect of boutique and normal IB in China? After doing some research I found the industry quite fragmented. Alot of them are boutique players or pretend to be financial advisers. I am seriously considering a career in China over HK (when you consider both economic and political environment). but hk still pay more.
Cheers
The problem is that it’s hard to tell what’s a legitimate company vs. a scam in China. There are some good, large firms, but you’re taking a huge chance if you go to a boutique. You are generally better off starting in places like the US, UK, or HK.
Brian,
Thanks for the article.
I`ve been working as an analyst at Edmund de Rothschild`s Private Equity department (2b AUM) since I graduated college a year ago. My main goal is to move up to an Apollo, Oaktree, etc.
I have an opportunity to work at one of the Big 4 or continue at Rothschild, which moves me closer to my goal?
Thanks
Stay at Rothschild. The Big 4 move you further away, if anything.
Hi Brian
Can you talk about the PE recruiting in Hong Kong or Singapore as well? (Maybe in your next article for emerging market/Brazil)
Thanks.
Unfortunately, I just don’t know enough about the process to write a full article on it unless someone volunteers. My understanding is that it’s far less structured and closer to the off-cycle process described here. For Singapore, please see:
https://mergersandinquisitions.com/singapore-investment-banking-private-equity/
Hi Brian,
I’m a first year associate at a PE fund focused on buyout co-investing. I did two years at an elite boutique IB and am looking to lateral out of co-investing to a direct buyout shop. What do you think my odds are and what stands in my way?
Thanks,
Juan
You have decent odds, but more so if you target smaller firms. It would be tough to move into a direct buyout firm of the same size because they’ll discount your experience no matter what you do or so.
Hello, my name is Hayashi. I have received an offer from one of the top IB in Japan and I will start working in 4 months.
I always thought the common case was working in IB for 3 to 4 years and then going into PE. It makes sense to me because PE wants to recruit people that have actually done some works.
Are you suggesting that I should starting reaching out to PE funds as soon as I start working at IB?
I don’t know the PE recruiting process or time line in Japan (have never been able to find substantial information on it), so I can’t speak to that one. I would assume it probably works in more of an off-cycle way with slower timing.
Brian,
Thank you for the well written and informative article. I have about 6 years of total work experience, a bachelors and masters in accounting, and an MBA from a respectable state school, but not ivy league. The last 3 years, I have worked in corporate development for a relatively large public corporation (almost $100 B enterprise value). All the deals we look at are in the billions of dollars, one has closed, and I have brought multiple others to executive vetting and bids. I have always wanted to eventually move into private equity and wanted to get your take on how feasible it is for someone with my background to break in and what level do you think I would fit in at? Also, you mention in your article for “off-cycle” candidates to network. If I don’t personally know anyone at these firms, do you recommend using LinkedIn to set up informational interviews? If so, what level should I shoot for? VP, Director, MD? Do you have any recommendations for good headhunter firms for “off-cycle” candidates?
Thanks,
J
It’s possible to get in coming from that background, but it will still be very tough vs. the process that bankers go through. I have seen people get into PE from corporate development before, but usually it’s in the same or a similar industry and/or they move to a smaller PE firm. You would most likely come in as an Associate or Senior Associate if you haven’t done PE before. Yes, you can use LinkedIn to contact people at these firms. Go for the most senior ones you can find at first. But always email them; LinkedIn is only helpful for finding names (I have messages from 6 months ago I still haven’t responded to). Headhunters do not focus on off-cycle candidates, so I cannot recommend any. You have to be extremely proactive to make this process work.
Thanks for the articles. Your website has helped me come from a non target state school, get offers at a couple bulge brackets, but ultimately accepted an analyst role in Investment Strategy at BlackRock.
Coming from an asset management role where most of the day to day consists of bespoke financial analysis and presentations on different markets, would I have a chance to break into PE? Assuming I know the material, am efficient at modeling, and have strong communication skills.
Possibly, but you wouldn’t have a great chance at PE no matter what you do. I have seen people move from equity research to PE, but usually they do it by trading down and going to much smaller firms outside of major financial centers. If you’re willing to do that, you could get into the industry, but otherwise, your chances are much higher at hedge funds or other asset management firms.
On this note of asset management, would you mind explaining to me how (if at all) alternatives asset management (specifically GS/JPM alternatives AM “private equity group”) is different from your general _____ Private Equity Analyst?
I just find it confusing because I see people on LinkedIn who are ____ Private Equity Analyst, but I never see anything on the websites to apply for where it is just “Private Equity Analyst.”
Thank you :)
That is a great question, and I don’t have an immediate answer for you. The large banks all have internal private equity and alternative asset groups, but I believe they’re a bit more constrained in their strategies vs. the external/dedicated PE firms. But I’ll see if we can cover this distinction in the future.
Brian, where do you view Wells Fargo in the In-Between-a-Bank classification in terms of placing into Private Equity jobs after Investment Banking? What groups do you think are the strongest there in regards to offering the best exit opps into Private Equity? And where does the bank stand in the ranks amongst the bulge brackets? Thanks!
Also, does location play a huge role in exit placement? Charlotte vs NYC?
Very much appreciated!
Yes, it plays a role. It will be somewhat tougher to win jobs coming from Charlotte.
Placements from Wells Fargo are decent-to-good, depending on your group. Some of the industry groups are probably best for private equity, but one of the debt-related groups also work. It is probably about the same as the European bulge brackets.
Hey Brian,
Thanks for the read. I have a question- I’m currently a first year analyst working at a global bank but working within their middle market (companies between $50MM-$2B in revenue). Our MM segment within the bank is unique in that we regularly deal with syndicated financing that requires modeling out multiple scenarios for deals related to lending to PE firms for M&A transactions (our office uses the same M&A model as what IB uses). After sitting in and working on many of these deals first hand I am starting to notice similarities between my role and what a PE analyst would ultimately do (we’re just on different sides of the negotiation table). I am curious of your opinion on how a PE firm would look at my current job and how well it would translate to a middle market PE firm. I find M&A transactions more interesting than commercial lending so I have been gaining interest in pursuing the industry. Thanks.
I think they would view the experience as applicable, but you would still probably have a better chance at a credit fund or direct lender or something like that (i.e., like a private equity fund, but focused on debt investments instead). You still have a shot at middle-market PE firms, especially since you’re at a large bank, but your chances are probably better on the credit side.
Hello Brian,
Thank you for all the great content. I would like to ask for an opinion regarding starting out at a small private equity firm straight out of university. I have an offer to join a PE shop with 200-300 million AUM in a smaller European country. How do you view the possibility of lateraling to a larger fund after a few years of PE experience at a fund like this? I see myself staying in PE for the long haul and would ideally move to a larger fund down the road.
My other choice is to join an MM investment bank in the same geographical area.
It’s possible to move to a larger fund, but it’s still not easy. But if you’re 100% certain you want to do PE in the long term, it’s a bit better to start at the smaller fund and move up. If you go to the bank first, you’ll have to move over to a smaller PE firm first and then move up from there.
Hi,
Is it possible to move into PE after 12 years of financial services project management role. I’m interested in doing so. I have worked only in fortune 100 companies and big financial public sector. Do another MBA in ivy league like wharton (executive) help? Need an honest answer
After 12 years, it would be extremely tough to make that move. Maybe you could get some type of operational role at a PE firm or work at a PE portfolio company, but it would be tough to get in directly on the investing side.
Brian,
Does working as an analyst in a specialized group (restructuring, etc) within a good MM bank in NYC help at all with PE recruiting? If yes, do headhunters reach out to these analysts for roles at smaller funds? If not, do headhunters reach out with other IB analyst roles at EBs or BBs?
If no to both, what do you recommend you do if you ultimately want to work at a larger PE fund? Thanks for your help
It might help a bit, but I still don’t think most headhunters will contact you independently if you’re at a non-EB or BB bank. Your best bet is to get referrals to headhunters from friends at EB or BB banks, contact them, ask specifically about distressed/restructuring opportunities, and be very specific with your criteria. Ask for larger funds, but accept smaller funds if that’s what it comes to, and then try to move to a larger fund over time.
Understood. Do you think it would be difficult to lateral to an EB/BB after your first year as an analyst with this background?
No
Dear Brian
First and Foremost thanks for sharing this to us. Good article and very informative.
To start of with, I just would like to get your opinion on what you think of my career pathway. I am currently 29 years old, and has been in Real Estate sectors about 5 years. 3 years in Fund Management and 2 years in Acquisition and Fund Raising for a PERE firm. As a business graduate, I always somehow think of coming back to a corporate acquisition (either sell or buy side) and may be doing something slightly different or more diverse rather than stuck in RE. Do you think my experience in transaction and fund raising in the RE would be transferable to other fields? say to M&A or corporate development or wider-sectors PE?
What do you think?
Yes, potentially it is transferable, but if you’ve already been in real estate for 5 years, you should move over ASAP because it will only get harder to move into a generalist role over time.
Thanks Brian. Generally it makes sense that it is harder to get out once I am already in there for too long.. I wonder if it is better for me to get out after MBA instead since i am planning to go for one and moving out now seems not a good move if I will go out again for MBA in a short while. What do you think? will MBA helps to get out? Is that also the case that if I of course want to start over somewhere lower – like senior analyst again.. as opposed to manager or associate, would that make a difference in term of making a move?
Again, I dont totally hate Real Estate.. in my opinion it is an industry specific but it is a big industry too.. just weighing into my move next..
An MBA might help, but it doesn’t make sense to get two MBAs if that’s what you’re asking (how could you even do that?). To have the best chance, you would need an MBA with a pre-MBA internship in banking or whatever field you want to move into.
Sorry Brian to confuse you. It will be my first MBA :>
Hi Brian
nice article first and foremost, Succinct and yet informative at the same time.
I am currently working with a Real Estate Private Equity arms for its acquisition and fund raising team. Dont have IB experience before. I was from Fund Management team before.
I think my question is that, I sometimes have this thought that may be.. before it is way too late, I should try to go back to generalist sell-side with boutique IB or Big4 transaction team at the very least. As I just think, RE is very microscopic, I dont know what I have missed so far – as RE is purely a project / asset acquisition rather than a company’s buyout (though we may do a buyout sometimes but very rare).
Hence my question is.. do you think my concern is real? and also, if say in the future, I want to go out and seek opportunity in other PE store that may be outside RE – do you think such case is possible?
I do have a plan to pursue MBA next year also.. not sure if that is a value-add or not. But ask I am coming from an emerging market country, it is abit necessary.
Hope can find guidance from you..
Yes, your concern is real. It will be more difficult to move into generalist roles if you stay there too long. If you’ve been there for more than a few years, you should move into a generalist role ASAP or it will be very difficult to do so later on. An MBA may be necessary depending on the market you’re in.
I am currently in FIG corporate development with prior experience in insurance and big 4 transaction. 8 years experience in total, 3 completed transaction so far in South East Asia.
How would you recommend me to position myself for PE? And what level should I aim at (associate? VP?)
Thanks very much
You’ll probably still have to aim for Associate roles (which is ridiculous) because they rarely hire VPs from outside the industry. But it depends on your level as well; if you’re at the Director level or above, you might be able to go for VP roles.
To position yourself, you’ll probably have to focus on FIG PE firms, and I’m not sure how many there are in Southeast Asia. A better approach might be to spin your experience to look more “operational” in nature and then approach firms that focus on operational improvements, since there are far more of those… but I’m not sure what your experience looks like or how easy that would be.
Brian – Would love to hear your advice on this.
I am currently a sophomore at a top university (though not ivy league). I have 2 internship options for my spring semester.
1) Wealth management advisor intern at Merrill Lynch.
2)Through the help of a connection, I also have a position open to intern at Apollo Global Management this semester.
Either way I feel I will learn a substantial amount but I am wondering which potential opportunity you believe will better help me land a position as a summer investment banking analyst at a top IB firm for my junior year.
Apollo is definitely better. The work is more relevant, all the top banks will know the name (even though, to the general public, Merrill Lynch is more recognizable), and you’ll be able to tell your story more effectively if you intern there.
Great article, thanks M&I team.
Thanks for reading!
Hi Brian,
Thank you for the article. I am wondering if you have insights regarding the difficulties of moving upstream in regards with the size of the PE shops? I am graduating from an “elite” university and have the choice of doing a summer internship at a BB in London or starting full-time at a smaller (200-250 million AUM) PE shop in a smaller country in Europe.
My end goal is private equity but I am unsure about how this would affect my career more long term, as ideally I would later move on to a larger MM shop.
Thank you for any comments
I would definitely recommend starting at the BB in London rather than a smaller PE fund in another country for several reasons:
1) It’s easier to move from a BB to a mid-size PE firm than it is to move from a small PE firm to a larger one because you can take advantage of on-cycle recruiting and the structured process.
2) There are far more PE firms in London than in any other European city/country, and it will be easier to interview around there logistically.
3) Going to a brand-name bank gives you more flexibility with exit options later on in case you decide against PE for whatever reason.
Brain,
Thanks for providing an update to this article. I remember reading it a few years ago when I got into IB and always revisiting with thoughts for transitioning to PE. I was wondering if you could provide some advice as I recently interviewed for final round PE shop a few weeks ago and followed the following week to see where the firm was at in their interview process but it has been radio silent on their end.
For reference, I was the first candidate that firm interviewed for Final Rounds
Should I look to follow up again?
Thanks.
Yes, follow up with them again. Similar to banks not responding to you, this behavior generally means you’re in the mid-range of candidates, so they’re waiting to see what other people do first. It’s always worth following up, but at this stage, you need a competing offer to get a quick response from them (most likely).
Thanks for the prompt response.
A quick follow-up question I have is how soon should I look to follow-up with the firm again?
Check back each week until you hear something… maybe decrease the frequency after a few weeks.