McKinsey Exit Options, Timing, and PE?

exit options Finance McKinsey McKinsey & Company Private Equity
Neue Antwort am 21. Jul 2021
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Anonym A fragte am 20. Jul 2021

Hi guys,

I'm happy to share that I've been extended an offer to join McKinsey & Company as a fellow (business analyst) fresh out of school. In terms of my academic background, I've completed my bachelors in business administration (BBA) with a majors in marketing.

My thought process (and please do comment on this) currently is that I'll work at the firm for 3-4 years where there exists a possibility of bring promoted to associate and then look to exit management consulting into private equity, which seems to be a lucrative option at this time.

Now I completely understand if the above is entirely wishful thinking but I'd like to understand a few things.

  1. What is the best time to exit management consulting, I've read the average to be 2-3 years but I'm thinking a promotion to associate may be useful?  
  2. Is private equity a possibilty given my background? It's unlikely that I will get to select which projects I work on this early in so I might not be able to work on DD or M&A projects.  
  3. Should I consider an MBA first, i.e. after leaving consulting & before transitioning or is it important to have PE experience before masters?  
  4. How can I better equip myself for a role in finance, perhaps giving the CFA?

I understand this post is long-winded and talks generally about a number of things however this is the starting point of this research so any direction would be greatly appriciated.

Thank you!

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Ken
Experte
bearbeitete eine Antwort am 20. Jul 2021
Ex-McKinsey London final round interviewer

If you want to go into PE, I would start early than late where I've seen some BA's leave after 18 months or straight after MBA; 3-4 years is definitely on the longer side where "more" experience in conslting is not necessarily seen as a plus. The one concern I have is your comment about not having choice on PE projects. If so, that also suggests to me that you live in a geography where PE is not prevalent and that also might limit your access into PE as an exit option.

1. Promotion to Associate is only valuable in the sense that you have validation of your performance (3 out 25 in your BA class to be promoted after 18 months)

2. McKinsey BA is definitely eligible but PE is super competitive and so it would also depend on your broader background. Deal experience is crucial especially if you are applying straight to PE. I get the impression they are more open minded when you are coming out of HBS/GSB

3. I would apply before, during and after MBA where it's all about luck and timing where there are usually very few spots compared to a large pool of strong MBB/buldge bracket bankers/MBA grads

4. I'm assuming you are referring specifically to PE (not FInance broadly). If so, familiarity with basic financial knowledge around the 3-statements and financing deals is critical, building an LBO model and then your DD ability in terms of looking at a business in context of it's external and internal drivers is crucial too where you will come across interviews where you will need to argue for or against acquiring a specific asset 

Most importantly, I would first focus on enjoying and thriving at McKinsey then start planning for your exit options., Good luck!

(editiert)

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Erica
Experte
Content Creator
antwortete am 21. Jul 2021
Ex-McKinsey / 100% offer rate / LBS / Principle driven / Real case/ If you get the interview, you should get the offer!

Hi there - congrats on the McK offer, well done!

Joining PE from management consulting is not uncommon - in fact, many of my colleagues have done so. However, when to join PE and whether you will be able to get in depends on your project experience and whether you've acquired the necessary skillset PE firms are looking for. 

For example (a very general one), if two analysts A and B, both spend 1 year with McK. A were put on 10 DD projects (let's say each lasts 2-3 weeks) while B were put on 2 academic research projects (each lasts 6 months). I'd say if they both exit after one year and apply for PE firm, A would have a much much higher chance of being selected. 

So the point I'm making here is that you need to have a more clear idea on what skillset your target PE firm(s)/team look for and do your best to obtain these skills during your time at McK. Exit at a point when you think you've gained sufficient experience/skills. McK does a lot of PE related projects (at least in Asia this is the case!) so there will be plenty chance for you the learn and grow towards your target. 

I don't think CFA is neccesary. McK can provide resource for you to gain all the key financial skills.

Hope this helps!

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Francesco
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antwortete am 21. Jul 2021
#1 Expert for Coaching Sessions (3.600+) | 1.300+ Reviews with 100% Recommendation Rate | Ex BCG | 8+ Years of Coaching

Hi there,

Congratulations on the offer! Answering your questions:

  1. Really depends on your goals. If you get the right opportunity, may be after 1 year.
    1. Most people maximize the exit potential in the Industry once reached the manager role
    2. However for PE most people do the transition before the manager role. I know several people that transitioned to it as Associates or with 2 years of Analyst + MBA (so right after the MBA). May also happen as an Analyst (I know some cases when this happened) but you need to be lucky (meaning: working on the right projects + having the right connections)
    3. The exact timing also depends on the geography
  2. For sure it is possible with the MBB brand, although PE firms get a lot of demand
  3. As reported in 1, you will probably maximize your chances with 2 years of Analyst+MBA or as Associate (for which you may need an MBA). You may still network as an Analyst and if you are lucky with projects and connections make the transition earlier before the MBA
  4. Best thing would be to focus on DD projects whenever possible. CFA may help to show credibility

Best,

Francesco

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Udayan
Experte
Content Creator
antwortete am 20. Jul 2021
Top rated McKinsey coach with many offers /Ex McKinsey EM in New York /6 years McKinsey recruiting experience/Real cases

Ken has the right idea - if PE is your goal, you start recruiting in year 1 and you leave month 18-24 depending on where you join and what you negotiate with McK. I would say exiting as a BA is the best way to join PE. The later you join the lower your chances of getting in and BAs typically have the highest odds of making it into PE.

You should not do an MBA before PE  - most PE firms will require you to do an MBA after 2 years anyway so that is the best time to do it.

Best,

Udayan

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Adi
CoachingPlus-Experte
Content Creator
antwortete am 20. Jul 2021
Accenture, Deloitte | Precision Case Prep | Experienced Interviewer & Career Coach | 15 years professional experience

Ken has given a good explanation.

From my perspective, you are really getting ahead of yourself here. You have not even landed in McK and are already thinking of exit- great to have ambitions and plans but not great to approach it with this mindset. We live in volatile times and you need to be flexible and adapatable and change course as required.

Focus on learning, do a very good job at McK and give your best. Good things will happen. Dont bet too much on future events - they may or may not happen as you plan. 

All the best & congrats!

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Ken

Ex-McKinsey London final round interviewer
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