How to move into Private Equity from Consulting?

Hi there,

I would be happy to share my thoughts on your questions:

• First of all, moving into private equity from consulting is a well-trodden path for many consultants. Consultants bring in valuable skills, especially when it comes to undestanding target companies or sectors as a whole.
• Moreover, most consultants would (and want to) enter into investment team roles, but some might also be more interested in value creation roles. When it comes to the types of PE firms hiring consultants, there really is no restriction either. It has taken PE firms some years to realize that investment bankers might not be the only (and maybe not even the better) choice for their teams.
• Lastly, the transition timeline can vary based on several factors, including your level of experience, the demand in the PE industry, and networking efforts. I would highly advise you to start by networking within the PE sector and leveraging your consulting experience to highlight how your skills can translate to value in PE.

If you would like a more detailed discussion on your specific situation, please don't hesitate to contact me directly.

Best,

Hagen

This one is really dependent on networking.

There are two types of roles: investment roles and transformation roles.

People going to investment roles usually have experience in Commercial Due Diligence work. These type of roles are highly analytical and most often come from networking only

Transformation roles usually are related to large PE firms that perform large transformation and integration projects and need people to help them on the operational side. Opposite from investment roles, these are not highly analytical, and PMO experience is paramount here. These may come or not from networking - most often they come from either headhunters and public offers. PE firms in some cases directly post these roles within consulting firms alumni websites, or let consulting firms know (which they use for people being counseled out, or other consultants who decide they want to leave). 

Former consultants working in these type of roles are the best options for networking for transformation roles (e.g. managers who are leading the PMI/PMO efforts, for example).

Hi there,

Once you work at MBB, you can “go anywhere”. The work is on you to chart your course.

This comes with connections within the consultancy itself, from all the clients you worked with (especially if you were in the DD/PIPE practice), and from LinkedIn (leveraging your brand).

I've seen “all” exits to PE - they are all possible if you leverage the network right.

Hi there!

I know a few cases of people who did that. 

Typically, it tends to be consultants who have done private equity work while in consulting (e.g., due diligence projects most often, but not exclusively). 

It's either them reaching out to PEs and applying for jobs or being approached by a recruiter. 

The process tends to take a few weeks on average. 

The role / seniority at which they go in differs based on the seniority that they had in the consulting firm. Most people move though when they are at Associate to Manager level. 

My recommendation is that you reach out to a few people who are now working in PEs and were consultants before and get an understanding of how it worked for them. That will be priceless.

Best,
Cristian

Hi there,

It essentially comes down to 2 things:

• Experience
• Network

First, all the people I have seen move from MBB to PE were heavily focusing on PE-related projects during their consulting tenure. That builds up skill, expertise, and credibility.

Second, they were actively networking with prospective employers.

Once they left MBB, they had the right profile for PE.

It's not a super common route but achievable if you set your sails early in the right direction.

Cheers,

Florian

Hi,

Sharing some thoughts having worked in BCG's PE practice and also having considered exits to PE / VC. 

• Firstly, from a deal team perspective, consultants are at a disadvantage vs bankers
  • This is because consulting is way more varied than banking and entails multiple different activities/tasks that do not involve financial modelling and finance
  • If you entered MBB as a junior consultant in the generalist role - you would not have done more 3-statement models (let alone an LBO model) vs a banker
  • The other thing is that consultants often approach modelling from an 80/20 POV - if its good enough, it works. This means often that our models may not always be of the same standard in terms of elegance / formatting / structure vs. what a banker would do
• Thankfully, whether financial modelling is important really depends on the role
  • For value creation / ops team, this is less crucial
  • For deal team side, this is something you need but not something that is an ultimate deal breaker based on the people I know who have made the transfer to deal team
  • Take note for VC, the kind of modelling and diligence you do as part of the deal team is often not to the same depth/extensiveness (esp in sourcing stage) vs PE - for various reasons
• Thirdly, skillsets you can leverage from MBB - again depends on the role
  • Deal team:
    • Business sense/judgment
      • ability to critically think and assess a business, come up with a thesis
    • PMO
      • alot of what junior PE people do is manage process)
    • Relationship management
      • less with the CXO level of target/assets, but still important for junior stakeholders for gathering data etc
      • For VC, this is particularly important where sourcing becomes a big task and you interact a lot with founders
  • Ops/value creation team
    • Problem solving
      • Essentially using your problem solving skills to identify levers to increase value/profit
    • Relationship management
      • You will have to deal with the asset stakeholders/founders - a lot of the ops team role is about influencing
    • PMO
      • You may also have to manage projects/programs, e.g. it is not uncommon for value creation teams to hire MBB/consulting firms to strategize/implement value creation levers

Hope this helps!