From consulting to PE?

Question

Hi guys, I'd like to hear your advice on this topic. A few questions:

1. How feasible is it to transfer from consulting to PE? What practice / specific project types to focus on in order to build up skills required by PE (ex: practice: corporate finance & strategy, PIPE, etc)?

2. What specific skill sets are valued by PE? What is the reason why PE hire consultants instead of investment bankers?

3. Following the above questions, how does people with IB / consulting background work together in PE? What would be the work split and major differences in job responsibilities (assuming same seniority)?

Thank you!

Answer 1

Hello!

1. It is very feasible, PE is a fairly common exit route from consulting. I would recommend focusing on due diligence and PEPI (private equity and principal investor) projects, although experience in other industries can also be useful if you want to invest into into specific industries within PE.

2. Due diligence projects will give you some understanding of the PE world, which is valuable. Generally the consulting toolkit (quantitative analysis, Excel and Powerpoint, problem-solving, etc.) and work ethic is valued, but beyond that you will be taught a lot from scratch.

3. I echo what Ken said - you are not going to be directly segmented based on your prior professional experience, but rather you will be trained in fundamental PE skills from scratch, and then will face relatively similar job responsibilities.

Answer 2

1. Although super competitive, it's definitely feasible mostly from MBB. It always helps to have deal experience where the DD skill set is transferrable and PE portfolio value creation experience is also a bonus

2. The business DD and value creation experience is valued where as investment bankers would be more around valuation and financing. Most PEs would say that both cohorts only have a small proportion of the PE toolkit covered and the majority will need to be learned on the job including accounting, legal, sourcing, etc.

3. Most PEs I've seen will expect you to learn the full PE toolkit so that you are able to cover the entire deal flow as you progress. There's no point have an ex-banker who can build a model, etc.

Answer 3

Hi there,

1) It's feasible/doable but honestly somewhat rare. I have a few colleagues who have done it, though most go into inhouse consulting.

Quite logically, you want to focus on PE/Due Diligence/Finance projects!

2) Not my area of expertise frankly. Best to network with current bankers to get answers here. However, of course PE will require you to understand various markets, industries, company dynamics, and have strong quant skills (for valuation, etc.)

3) This is a big question! It'll depend on the company, the type of work you're doing, your role, your specific project, etc. etc. Again, best to network to understand this nuance.

Answer 4

Hey there,

Great answers here already. I would like to add one point.

Most colleagues I know who made the transition from MBB to PE mainly focused on PE and DD projects during their time in consulting. So if that is the route you are planning to go down, already establish your expertise and experience early in your MBB tenure.

Cheers,

Florian