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Robert

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6

McK PE practice

Hello,

Is the PE practice at McK new? I see a lot of jobs advertisement for this practice lately. Would be interested in learning more about this practice as I feel McK is trying to get more work in this space. Also, how does it compare to BCG/Bain and IB? Thank you!

Hello,

Is the PE practice at McK new? I see a lot of jobs advertisement for this practice lately. Would be interested in learning more about this practice as I feel McK is trying to get more work in this space. Also, how does it compare to BCG/Bain and IB? Thank you!

6 answers

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Hi Anonymous,

PE practice exists already since long time ago. Traditionally and historically, McKinsey has strong business in financial services industry, which is in close relation to PE.

Without having data on comparing PE at McK vs. BCG and Bain, my gut feeling is much stronger than BCG and similar to Bain.

However, looking at current COVID19 situation, PE also got an initial huge shock but I can see some companies already preparing for potential PE deals as some financially weaker companies might be available for a huge discount at the moment.

Hope that helps - if so, please give it a thumbs-up with the green upvote button below!

Robert

Hi Anonymous,

PE practice exists already since long time ago. Traditionally and historically, McKinsey has strong business in financial services industry, which is in close relation to PE.

Without having data on comparing PE at McK vs. BCG and Bain, my gut feeling is much stronger than BCG and similar to Bain.

However, looking at current COVID19 situation, PE also got an initial huge shock but I can see some companies already preparing for potential PE deals as some financially weaker companies might be available for a huge discount at the moment.

Hope that helps - if so, please give it a thumbs-up with the green upvote button below!

Robert

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Hello!

It´s not new, I did 3 DDs with them in 2016 and 2017.

Is true that is growing a lot, hiring a lot of entry-levels and experienced people.

Bain has always been very specialized in this topic, with their famous "ring of fire", that is a team of consultants that only does DDs.

Hope it helps!

Cheers,

Clara

Hello!

It´s not new, I did 3 DDs with them in 2016 and 2017.

Is true that is growing a lot, hiring a lot of entry-levels and experienced people.

Bain has always been very specialized in this topic, with their famous "ring of fire", that is a team of consultants that only does DDs.

Hope it helps!

Cheers,

Clara

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Hi! It's not new, but it's strong and it's growing very very fast. During my time at the firm, I've done quite a lot of private equity actually – there is never lack of PE projects at the firm, so if you want to do it, the supply is plentiful.

Best,
Daniel

Hi! It's not new, but it's strong and it's growing very very fast. During my time at the firm, I've done quite a lot of private equity actually – there is never lack of PE projects at the firm, so if you want to do it, the supply is plentiful.

Best,
Daniel

Others have covered that the PE practice isn't new and is well established. Some points:

- Overall the practice is still larger than BCG but smaller than Bain, who is by far the leader in this space. All 3 are growing their PE practices very fast.

- Within PE practice, there are different types of projects:

  • Commercial Due Diligence (CDD): Most common, it is where a potential PE buyer (e.g. Bain Capital, KKR) hires consultants to diligence the business and answer some key questions on their investment thesis (e.g. competitive landscape, market growth)
  • Operational Due Diligence (ODD): similar to CDD but rather than commercial questions focused on operational - e.g. benchmarking costs by bucket vs key competitors to identify potential savigns
  • Vendor Due Diligence (VDD): Where a seller pays for a consultancy to provide a "3rd party assessment" of the business. More common in US than Europe. OC&C, LEK, EY Parthenon do a lot of work here, it is generally perceived less attractive than CDD for a few reasons - you can only work for 1 company (whereas with CDD you can run parallel CDDs for multiple potential buyers), and its hard to be impartial as you will have pressure from seller to be more positive about the business
  • Post Acquisition / Value Creation: Growing area, once a PE shop buys a company, they hire consultants to do Post acquisiton work (can be anything from cost cutting to growth strategy)

- Where McK (and to some extent BCG) do beat Bain out is through actual in house expertise - for example McK in London gets a lot of the Pharma / healthcare DDs where Bain doesn't have as much knowledge. Where Bain really excels is taking a topic that is unlikely to have any in house experts and running an excellent process to distill insights quickly

- McK is also relatively stronger in value creation, also because of their expert model - they pay a lot of senior (former) executives to act as advisors for them which can be very helpful for a case (I heard a story of McK stealing a post Acq case on a logistics business from Bain because they brought the ex CEO of DHL/Fedex/similar to the pitch.

Hope that is helpful! I worked extensively in Bain's PE practice in London so any other questions in this area feel free to message me!

Others have covered that the PE practice isn't new and is well established. Some points:

- Overall the practice is still larger than BCG but smaller than Bain, who is by far the leader in this space. All 3 are growing their PE practices very fast.

- Within PE practice, there are different types of projects:

  • Commercial Due Diligence (CDD): Most common, it is where a potential PE buyer (e.g. Bain Capital, KKR) hires consultants to diligence the business and answer some key questions on their investment thesis (e.g. competitive landscape, market growth)
  • Operational Due Diligence (ODD): similar to CDD but rather than commercial questions focused on operational - e.g. benchmarking costs by bucket vs key competitors to identify potential savigns
  • Vendor Due Diligence (VDD): Where a seller pays for a consultancy to provide a "3rd party assessment" of the business. More common in US than Europe. OC&C, LEK, EY Parthenon do a lot of work here, it is generally perceived less attractive than CDD for a few reasons - you can only work for 1 company (whereas with CDD you can run parallel CDDs for multiple potential buyers), and its hard to be impartial as you will have pressure from seller to be more positive about the business
  • Post Acquisition / Value Creation: Growing area, once a PE shop buys a company, they hire consultants to do Post acquisiton work (can be anything from cost cutting to growth strategy)

- Where McK (and to some extent BCG) do beat Bain out is through actual in house expertise - for example McK in London gets a lot of the Pharma / healthcare DDs where Bain doesn't have as much knowledge. Where Bain really excels is taking a topic that is unlikely to have any in house experts and running an excellent process to distill insights quickly

- McK is also relatively stronger in value creation, also because of their expert model - they pay a lot of senior (former) executives to act as advisors for them which can be very helpful for a case (I heard a story of McK stealing a post Acq case on a logistics business from Bain because they brought the ex CEO of DHL/Fedex/similar to the pitch.

Hope that is helpful! I worked extensively in Bain's PE practice in London so any other questions in this area feel free to message me!

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Hi, I confirm it's an established practice in McK. Maybe in some geographies it's growing and there is a particular need for new hires. You are going to do it at the top level.

Best,
Antonello

Hi, I confirm it's an established practice in McK. Maybe in some geographies it's growing and there is a particular need for new hires. You are going to do it at the top level.

Best,
Antonello

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Hello,

PE practice is not new for McKinsey, and it's comparable with the one at BCG or Bain. The comparision has to be made for a specific country.

Best,
Luca

Hello,

PE practice is not new for McKinsey, and it's comparable with the one at BCG or Bain. The comparision has to be made for a specific country.

Best,
Luca

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