MBB PIPE

Hi,

I was a Principal in the PIPE practice at BCG - sharing my experience based on that and also having interviewed/considered exit opportunities in value creation with PE shops.

First of all, your Goals and Objectives

• I think this really depends on what you mean by ‘more valuable’ and to what end do you need these ‘[enhanced] skill sets’
• The reason is because depending on your mid/long term vision, the necessity of taking a certain path would differ.
• For e.g., if you really only wanted to go to a Unicorn in an M&A/BD role, you wouldn't really need to come from PE
• For e.g., if you wanted to take on an operating role in a small-mid sized company, having PE ops experience may be an advantage

Secondly, its useful to understand the differences between MBB PIPE and PE:

MBB PIPE:

• This is advisory-type work and the reality is that the bulk of the work you will be doing is Commercial Due Diligence (CDD). CDDs are on average between 2-4 weeks
• While there is also portfolio optimization work, this is often a smaller share of the work and tends to vary by geography (e.g. in SEA deal sizes are just smaller and therefore targets/assets may not be of the right scale for MBB level work) but more importantly due to simple numbers: In the investment process funnel, PE firms will diligence much more targets than they actually invest in
• You may also work on other strategic topics e.g. I have worked on fund strategy & allocation before, but these again tend to not as common

PE value creation

• Firstly it's important to note that different PE firms (also geography specific) setup and run their value creation teams differently. E.g. some tend to higher more senior advisors, some are more junior heavy (which I assume this is what you are looking for). This has other implications also - but happy to chat on that separately offline
• PE value creation can -on average- be best described as a being a consultant but getting your hands more dirty (how dirty really depends on the setup - i've known some who are ‘embedded’ into the asset companies, i've also known some who only attend board meetings)
• You may or may not be involved in the CDD process (as value creation plan is often part of the CDD), but you are definitely mainly responsible for helping the asset achieve the EBITDA targets within the investment horizon (that means ~3-5 years)

Next, on what its like to work at the 2 places & skillsets

MBB PIPE

• This will be a lot more team based versus PE ops in terms of a day-to-day basis
• PIPE is renown within consulting for having a very high bar, and imo it is the best training ground for most of the core consulting toolkit
  • What it's good for: Problem-solving & analytical thinking (both qual and quant), effectiveness and prioritization e.g. 80/20, slide-generation
  • What it's not so good for:
    • client relationship management → you will not get the same level and type of client interaction and engagement vs. a typical strategy or transformation/implementation project
    • process implementation → while you will know how to run and adhere to a tight process in PIPE, it will not train you to really run an manage a complex and long process
• In MBB, you are also part of a much bigger organization which means more defined and structured learning opportunities, mentorship and progression

PE value creation

• PE value creation from day 1 requires the same skillsets that you are trained on in consulting, and this is why they often like to hire from MBB, because those skillsets are already established
• On the job, of course you will also be expected to demonstrate(or learn, if there is someone to teach you) the core consulting skillsets in order to either 1) identify value creation levers or 2) unlock identified value creation levers
• However the biggest difference between PE value creation and MBB PIPE is the difference in what the outcome is defined as and therefore what kind of abilities you tend to develop more. In PE your KPI is the EBITDA of the asset. In PIPE, your KPI as a consultant is to deliver your workstream which is part of a report (recommendation). This has several implications and nuances
  • You will feel more ‘stake’ or ‘skin in the game’ (this is also another reason why many consultants choose to go in-house to corporate)
  • In PE, no one will care about -how- you go about getting to the outcome (of course, within legal/ethical boundaries), and so if you can increase EBITDA by just having a conversation over lunch and getting someone to agree on a decision (and not doing a whole deck of analysis), this works as well
  • Thus, influencing and the ability to read, manage and influence people is one of the things ex-consultants have told me they have had to either change their mindset about or that they have developed and sharpened alot more in PE ops
• Do note also that many PE value creation teams are rather small - and even the biggest ones e.g. in North America will not be as big as MBB. Smaller places can mean several things: it is less structured, less defined, less consistent even in terms of progression and development

Lastly, Exit Opportunities

• MBB PIPE
  • If you want to exit to PE value creation: Yes, having MBB PIPE is an advantage
  • If you want to exit to Corporate: Frankly, having the PIPE is not as important as having the MBB brand itself.
    • Also note that some industries prefer you to have done work in a certain industry (e.g. Consumer Goods), and you will only get this experience if you have done CG projects and not only PIPE projects
    • But being in MBB gives you the opportunity to be exposed to this (assuming you shift out of PIPE after a while)
  • If you want to exit to Startup: Same as Corporate. MBB brand is what they generally look for

• PE value creation
  • At least in my region, the people that are in PE value creation are either mid or senior level career individuals and mostly from consulting background
  • Most either 1) stay in the value creation space or 2) shift to startups / small-mid size companies
  • I will say though that at least from conversations, you are more valuable and have more to bring to the table w.r.t. operator roles

Happy to chat more in detail - there are several other nuances which I have not covered here. 

Hope it helps!

Hi there,

Fantastic that you are able to get an MBB offer! I really wish I could have known that as well before recruiting.

Ok, sorry, facetiousness aside for now :)

Why do you know you're going to MBB? “My plan is to work at MBB” is like saying “My plan is to go to Oxford or Cambridge”

What if they don't hire/interview you?

You're just assuming you're going to be able to walk into one of the top 3 consulting firms in the world during a significant hiring downturn.

Please don't do this!

Apply to MBB AND PE firms. More than that, apply to many other consultancies!

Once you have offers, then you can decide. The most likely/realistic outcome? They'll decide for you (i.e. you may only have 1 or 2 offers at the end of it all)

Why not apply to/interview for both?

You're making a decision assuming they will all be making you offers. My strong advice is to apply to PE and MBB and other consultancies.

Hi there, 

I've done a couple of projects with the PIPE practice while in McKinsey plus I know a few people who were part of the practice specifically. 

It's a very intense, yet great place to be from a learning standpoint. It's all very fast-paced - the client and location usually change every 2-3 weeks. The hours are long. The complexity is high. In short, it's consulting on steroids. 

However, the exit opportunities are also amazing. Many PE firms recruit directly from MBB PE consultants because they already have an amazing skillset, plus the experience to work in vastly different industries. 

Like I recommend all candidates, if you're planning on applying around this time, I'd suggest you apply to a broad spectrum of firms. I've detailed the why and how in the following article:

• Maximizing your chances of getting a consulting job during an economic downturn

Best,
Cristian

Hi there,

Q: Any thoughts on going to MBB PIPE practice instead of a PE house directly?

It depends on your goals. 

In general, getting into PE out of undergrad/without relevant experience is very difficult. Most people work for a few years in IB (more common) or top consulting firms before moving there.

If your long-term goal is to be in PE, it would make sense for you to go there directly if you can. However MBB PIPE could also help you to get there eventually.

If your goals are different, it would depend on what they are exactly.

Best,
Francesco

I worked on a few PE cases when I was at McKinsey - I was not in the PE practice myself, but through this I interacted with lots of colleagues who were. In general, PE projects at MBB tend to be fairly intense and fast-paced (usually 2-3 weeks, with very long work hours). Lots of my colleagues from the PE practice ended up successfully exiting to PE firms after a few years. You will certainly pick up a lot of useful skills and expertise, and develop some contacts in the industry. 

The problem with that plan is that you don't really control your career that much. Honestly it is harder to get into PE and into MBB. PE funds like to see previous… PE/IB experience.

So a better plan would be to go to PE, then apply to MBB, and then return to PE, as this is more doable than the opposite.