Yes, you would have to stay there for 3 years and leave (as they would probably bring you in as a 1st Year Analyst) or find a firm that does off-cycle recruiting and leave once you get the offer.

As for whether or not a lateral move is worth it, it really depends on the specific PE firms you want to target. Your chances will always be higher at BB/EB banks, but you’ll also end up staying in banking for more time and not necessarily earning much more in PE if you’re going to target mid-sized funds in either case.

If you really care about the difference between “lower-middle market” and “upper-middle market,” then you should probably move to a bigger bank. In practice, most people do not really care or notice the slightly higher compensation, so in many cases, a lateral move may not make sense.

Long time reader here finally posting a question. Would definitely appreciate any insight.

I’m a First Year Analyst at a MM Investment Bank (industry group in NYC). Same tier as something like Piper/HW/WB/RJ/Stifel. Semi target school and alright GPA

My goal is UMM/MM PE-something above LMM really. The relatively grueling hours of IB or MF PE are something I’d want to avoid in my late 20s/early 30s, and PE does actually sound pretty interesting to me.

In your other replies, I have seen you recommend analysts in my position to lateral to BB/EBs as thats a significant advantage for PE recruiting.

My question is how would this impact my PE recruting cycle timeline. If I end up starting to lateral recruit now and get to a BB/EB by August 2021, wouldnt that hurt me for PE recruting since I might miss the train there? I know most BB/EBs have a 2 yr and out culture so its not like I’d have the option of extending my analyst stint for another year right? (Total 4 yrs of IB analyst across MM/BB?)

Also, do you find the chances of landing a lateral typically hard for someone in my position in the first place? Is it worth the time that could otherwise go towards trying to directly land PE from my MM bank?

Thank you

They will contact you if you’re at a BB or EB bank.

Hi Brian,

How do headhunters find and reach out to IB analysts? Or do IB analysts need to network/make connections with headhunters in order to get PE interviews?

Thanks!

They are both really good. The main difference is the obvious one, the SF offer will be better for tech PE, growth equity, and VC opportunities, and the NY one will be better for mega-funds based in NY. Take a look at the articles on the venture capital career path, growth equity, and private equity career path for more. It really just comes down to your preference for tech vs. generalist opportunities.

1. Tech San Fran
2. M&A/Tech/FSG NY

I might be interested in PE later. Can you kindly provide some insight on:

1. Pros & cons for each
2. What PE funds will be interested in each
3. Potential career path/Lifestyle

Thanks!

They matter to some extent, but recruiters tend to sort people by bank and group first. So, an analyst from a non-target school working in GS TMT will still be ahead of someone from Princeton who’s at UBS. But within the same bank, those with better universities and GPAs tend to win out.

PE internship experience helps, but these days almost everyone has multiple finance internships before working in IB full-time, so it won’t make that big a difference.

How much do your undergrad institution and GPA matter relative to the bank/group you’re in during this process?

Also, how much would it help to have PE internship experience from college?

Thanks.

1) It shouldn’t really take that long to prepare, assuming you know basic accounting and finance. Maybe do it in the few weeks before training/the job starts so you don’t forget too much. Look at our courses and guides for examples. LBO modeling is the easiest part of the process because once you do enough models, you can do them in your sleep. But you can’t do anything about your GPA or university at this stage.

2) If you’re asking whether or not you still have to exaggerate pitches and make them sound like deals, yes, pretty much, because these firms will still ask about deal experience. Another option is to reference deals you worked on in internships.

3) You will still have to go through headhunters because even those types of firms use on-cycle recruiting. Cold emailing could work in some cases, but more so for actual small firms (i.e., below “middle market”) or for newer/startup funds that are not yet plugged into recruiting.

Thanks for the great interview! I have a few questions regarding PE recruiting when you start as BB 1st-year analyst.

1. As a recruiting process is getting faster and faster, I was wondering when would be the right time to prepare for LBO modeling. Would Senior-spring be a good time? If so, how would you recommend prepping for LBO modeling test (any suggested materials to prep for it)?

2. Since there is lesser time to get involved in deals, do you still recommend adding BS to deal exposure?

3. If I am not thinking of going into MF and aiming safely at middle-lower MM PE, is job searching still the most effective through headhunters or through cold-emailing?

Thanks a lot!!