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Ken

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5

Pivot from Consulting to Private Equity

Dear community and experts,

I would appreciate your opinions and advice regarding a potential career move from strategy consulting to private equity. Any experiences you may have or cases you may know about are very welcome.

Background:

  • Engineering bachelor and masters from a top UK university
  • 2 years of experience at a tier-2 consultancy in Dubai (working mainly in commercial strategy, growth strategy and M&A projects), now seeking to pivot towards PE (or VC as a 2nd option)
  • Considering an MBA within the next 3 years
  • Passionate about impact investing, renewable energy, access to capital, access to education and emerging markets
  • Long-term goal: help commercialize renewable energy by making them more affordable, especially in emerging markets through impact investing or similar financing vehicles

The key questions at this stage:

  1. Is a career switch from consulting to PE/VC possible, without an MBA (i.e. doing the MBA later on)?
  2. What are the most valuable skills that one can sell and transfer from the consulting industry to the PE sector?
  3. What is the recruitment process for the top PE firms (i.e. Blackstone, KKR, TPG, Apollo...) like?
  4. How would you recommend preparing for the recruitment process?
  5. How important will networking and securing referrals be to make the transition, and what are the most effective ways to network (i.e. through which channels, who to target, etc.)?
  6. What is the hiring situation like at US offices of the primary PE firms, and do they intake international applicants?

Many thanks in advance

Dear community and experts,

I would appreciate your opinions and advice regarding a potential career move from strategy consulting to private equity. Any experiences you may have or cases you may know about are very welcome.

Background:

  • Engineering bachelor and masters from a top UK university
  • 2 years of experience at a tier-2 consultancy in Dubai (working mainly in commercial strategy, growth strategy and M&A projects), now seeking to pivot towards PE (or VC as a 2nd option)
  • Considering an MBA within the next 3 years
  • Passionate about impact investing, renewable energy, access to capital, access to education and emerging markets
  • Long-term goal: help commercialize renewable energy by making them more affordable, especially in emerging markets through impact investing or similar financing vehicles

The key questions at this stage:

  1. Is a career switch from consulting to PE/VC possible, without an MBA (i.e. doing the MBA later on)?
  2. What are the most valuable skills that one can sell and transfer from the consulting industry to the PE sector?
  3. What is the recruitment process for the top PE firms (i.e. Blackstone, KKR, TPG, Apollo...) like?
  4. How would you recommend preparing for the recruitment process?
  5. How important will networking and securing referrals be to make the transition, and what are the most effective ways to network (i.e. through which channels, who to target, etc.)?
  6. What is the hiring situation like at US offices of the primary PE firms, and do they intake international applicants?

Many thanks in advance

5 answers

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Best Answer
Book a coaching with Ken

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It will really come down to where you want to be working and how selective you want to be with choosing which PE fund. Assuming you are referring to a deal team role, the good news is that there is a longtail of PE funds you can consider (e.g., mid cap energy fund) if you're open minded about the brand, but they will still be super selective (tier 2 to PE/VC is not common) and will usually hire locally.

1. If you are looking to change geographies then an MBA will make a big differrence. As you already know, PE/VC is super competitive and local where many like hiring top performers from top MBAs, who naturally tend to have a strong pre-MBA background as well

2. The general thesis is that you need to learn the PE toolkit asap from scratch which is partly why they like to hire early professionals (2-3 years of experience) but they typically say that a consultants ability to analyse a business holisitically (i.e., business DD) is a transferrable skill

3. I have interviewed at two of the firms you've listed where they all have a strong bias towards bankers over consultants. The interview is a mix of personal fit, technical questions, deal experience, investment thesis, LBO modelling test and sometimes a investment case study. The number of interviews can really vary where some will expect you to meet with the majority of people from that team across levels and all partners/MDs

4. For a consultant, it's really the accounting and finance basics behind an LBO model and ideally trying to get as much DD experience as possible so that you are good at developing an investment thesis

5. Much of the recruiting happens through headhunters so it's super important that they know you and see you as a strong candidate. Referrals do happen but are not super common unlike consulting and so I would focus more on the network building. The networking is most naturally done through alums of your company who have joined that fund - if there aren't any that's usually a sign...

6. Unless you are a US citizen or have prior experience in the US, large cap PE funds will not consider you as they already have a wealth of talent from IBD, MBB and top MBAs to pick and choose from

It will really come down to where you want to be working and how selective you want to be with choosing which PE fund. Assuming you are referring to a deal team role, the good news is that there is a longtail of PE funds you can consider (e.g., mid cap energy fund) if you're open minded about the brand, but they will still be super selective (tier 2 to PE/VC is not common) and will usually hire locally.

1. If you are looking to change geographies then an MBA will make a big differrence. As you already know, PE/VC is super competitive and local where many like hiring top performers from top MBAs, who naturally tend to have a strong pre-MBA background as well

2. The general thesis is that you need to learn the PE toolkit asap from scratch which is partly why they like to hire early professionals (2-3 years of experience) but they typically say that a consultants ability to analyse a business holisitically (i.e., business DD) is a transferrable skill

3. I have interviewed at two of the firms you've listed where they all have a strong bias towards bankers over consultants. The interview is a mix of personal fit, technical questions, deal experience, investment thesis, LBO modelling test and sometimes a investment case study. The number of interviews can really vary where some will expect you to meet with the majority of people from that team across levels and all partners/MDs

4. For a consultant, it's really the accounting and finance basics behind an LBO model and ideally trying to get as much DD experience as possible so that you are good at developing an investment thesis

5. Much of the recruiting happens through headhunters so it's super important that they know you and see you as a strong candidate. Referrals do happen but are not super common unlike consulting and so I would focus more on the network building. The networking is most naturally done through alums of your company who have joined that fund - if there aren't any that's usually a sign...

6. Unless you are a US citizen or have prior experience in the US, large cap PE funds will not consider you as they already have a wealth of talent from IBD, MBB and top MBAs to pick and choose from

(edited)

Very helpful comments Ken, much appreciated. — Anonymous A on Jan 25, 2021

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1. Yes - But in my opinion this is much higher for MBB. PE usually wants IB folks and not consultants given the strong financial skillsets required. You will need to focus on PE firms that regularly recruit from consulting firms. Ideally from your consulting firm. Typically these will be smaller shops with a particular industry focus

2. Multiple Due Diligence projects is a huge plus. Aside from that emphasize your technical/analytical skills as much as possible

3. Super super selective and you usually get 'tapped' for it in the US at least. Expecially BAs at McK for example the recruiters would reach out to you to ask to apply. If not then work with a recruiter - Specifically those that work with the PE firms you identified. This is not so difficult to find once you narrow the country and roles you are after and do some google searches (e.g,, PinPoint partners)

4. Many guides (like the vault guide) have a solid approach to this. Your focus will be on showcasing financial analysis skills alongside solving cases in the interview

5. As always very effective - your best bet is alumni of your firm or college

6. Extremely unlikely if you need sponsorship - there is tons of demand from local candidates. Your best bet is to start in your country and then transfer later.

Best,

Udayan

1. Yes - But in my opinion this is much higher for MBB. PE usually wants IB folks and not consultants given the strong financial skillsets required. You will need to focus on PE firms that regularly recruit from consulting firms. Ideally from your consulting firm. Typically these will be smaller shops with a particular industry focus

2. Multiple Due Diligence projects is a huge plus. Aside from that emphasize your technical/analytical skills as much as possible

3. Super super selective and you usually get 'tapped' for it in the US at least. Expecially BAs at McK for example the recruiters would reach out to you to ask to apply. If not then work with a recruiter - Specifically those that work with the PE firms you identified. This is not so difficult to find once you narrow the country and roles you are after and do some google searches (e.g,, PinPoint partners)

4. Many guides (like the vault guide) have a solid approach to this. Your focus will be on showcasing financial analysis skills alongside solving cases in the interview

5. As always very effective - your best bet is alumni of your firm or college

6. Extremely unlikely if you need sponsorship - there is tons of demand from local candidates. Your best bet is to start in your country and then transfer later.

Best,

Udayan

(edited)

Much appreciated comments Udayan — Anonymous A on Jan 25, 2021

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Hi there,

This career transition looks very difficult to me at this point of time.

Some of the firms that you have listed have been my clients when I was part of PE practice in McKinsey and even today some of my friends work here. So according to my experience, these firms would rather prefer Investment Banking background over management consulting. Within management consulting, these companies prefer people from MBB, or somebody who has an understanding of the kind of work that they do.

For the kind of long-term objective you're talking about and also the step of MBA that you're planning in 3 years, I can suggest the following:

  1. Why don't you consider preparing for MBB and spending there some couple of years so you can get an MBB experience. Then after you can go directly to PE // or do an MBA so you'll be a more attractive hire after, too
  2. Try and see whether you can get into boutique private equity or investment bank. You can spend some time there either pre-MBA part or you spend around 3 years at this position and network and maybe go directly to the PE of your first choice.

This is an important career decision and I wish you good luck in taking it.

Let me know if I can be of any further help for you.

Cheers,

GB

Hi there,

This career transition looks very difficult to me at this point of time.

Some of the firms that you have listed have been my clients when I was part of PE practice in McKinsey and even today some of my friends work here. So according to my experience, these firms would rather prefer Investment Banking background over management consulting. Within management consulting, these companies prefer people from MBB, or somebody who has an understanding of the kind of work that they do.

For the kind of long-term objective you're talking about and also the step of MBA that you're planning in 3 years, I can suggest the following:

  1. Why don't you consider preparing for MBB and spending there some couple of years so you can get an MBB experience. Then after you can go directly to PE // or do an MBA so you'll be a more attractive hire after, too
  2. Try and see whether you can get into boutique private equity or investment bank. You can spend some time there either pre-MBA part or you spend around 3 years at this position and network and maybe go directly to the PE of your first choice.

This is an important career decision and I wish you good luck in taking it.

Let me know if I can be of any further help for you.

Cheers,

GB

Thanks Guarav, for the very useful comments. I have been giving it a deeper thought and it seems like the first option you highlight is the path that makes most sense. The challenge now will be to make the jump to MBB whilst on the job, and given the reduced intake due to COVID. However, I think I have valuable experiences and learnings from the last 2 years which I can leverage. — Anonymous A on Jan 27, 2021 (edited)

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Hi A,

it is totally possbible but obviously depends on many factors - I have had PE interviews and received offers but turned them down because MBA sponsoring was not part of the package.

They recommended me doing the MBA first, get some Investment Banking experience and then transition again with some more deal and corporate finance experience (in addition to the awesome strategic and ops experience from Bain) under my belly!

However, many of my friends immediately transitioned immediately from MBB into top PE funds straight away or from MBB into MBA then PE.

Best,

Denis

Hi A,

it is totally possbible but obviously depends on many factors - I have had PE interviews and received offers but turned them down because MBA sponsoring was not part of the package.

They recommended me doing the MBA first, get some Investment Banking experience and then transition again with some more deal and corporate finance experience (in addition to the awesome strategic and ops experience from Bain) under my belly!

However, many of my friends immediately transitioned immediately from MBB into top PE funds straight away or from MBB into MBA then PE.

Best,

Denis

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Hi there,

Thanks for the background and well-thought out question! Here are my thoughts:

  1. It is, but hard. Working at Bain or within the DD/FI branches of your consulting company improves your odds
  2. Being able to handle long hours/hard work, client management skills, analytical ability, clear communication, broad/deep industry knowledge
  3. Can't speak to this
  4. Can't speak in-depth to this, but certainly make sure you network aggressivley and prepare for both fit and content interviews!
  5. ALWAYS important
  6. Can't speak to this

Good luck!

Hi there,

Thanks for the background and well-thought out question! Here are my thoughts:

  1. It is, but hard. Working at Bain or within the DD/FI branches of your consulting company improves your odds
  2. Being able to handle long hours/hard work, client management skills, analytical ability, clear communication, broad/deep industry knowledge
  3. Can't speak to this
  4. Can't speak in-depth to this, but certainly make sure you network aggressivley and prepare for both fit and content interviews!
  5. ALWAYS important
  6. Can't speak to this

Good luck!

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