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Private equity and strategy

Hello everyone,

is private equity a common exit from consulting? Does PE firms evaluate and hire strategy consultants? How do the interviews are? Are the same for candidates from strategy and from Investment Banking? What about the salary in PE? Do they differ from those who came from consulting and those who came from Investment banking ?

Thanks a lot

Hello everyone,

is private equity a common exit from consulting? Does PE firms evaluate and hire strategy consultants? How do the interviews are? Are the same for candidates from strategy and from Investment Banking? What about the salary in PE? Do they differ from those who came from consulting and those who came from Investment banking ?

Thanks a lot

4 answers

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Hi,

PE is not a common exit, simply because there are so many MBB alums and a very limited number of PE roles.

To give you some context - at my MBA class at Harvard, we had more ex-PEs looking for a PE job than the final PE job offers. As you can see - the PE world is very very small

Salaries are much higher if you stay long term since PE assumes Carry. Once you are in - the salaries are the same no matter what was your background. However, keep in mind that some PEs have operational roles (typical for ex consultants) where the salaries are lower than with investment roles

In private equity interviews, the cases will be much more detailed in the financial part. Depending on the company you'll need to:

  • Find the relevant information in P&L and Balance sheet
  • Do the simplified valuation using NPV: calculate cash flows and make assumptions about growth rate and discount rate
  • Do the valuation using comps - you'll have to explain which comps you will use and why

Good luck!

Hi,

PE is not a common exit, simply because there are so many MBB alums and a very limited number of PE roles.

To give you some context - at my MBA class at Harvard, we had more ex-PEs looking for a PE job than the final PE job offers. As you can see - the PE world is very very small

Salaries are much higher if you stay long term since PE assumes Carry. Once you are in - the salaries are the same no matter what was your background. However, keep in mind that some PEs have operational roles (typical for ex consultants) where the salaries are lower than with investment roles

In private equity interviews, the cases will be much more detailed in the financial part. Depending on the company you'll need to:

  • Find the relevant information in P&L and Balance sheet
  • Do the simplified valuation using NPV: calculate cash flows and make assumptions about growth rate and discount rate
  • Do the valuation using comps - you'll have to explain which comps you will use and why

Good luck!

Is PE base salary higher than base salary MBB (if you exclude carry and bonus) and compare same level of seniority (middle-manager/senior associate). In London and NYC — Anonymous B on May 12, 2020

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Hi,

PE is a common exit option for MBB consultants. Although the salary will be the same, role of former consultants is usually different from ex investment bankers. Consultants most commonly work after the deal as board members of the acquired company. Investment bankers instead, work for the deal.

Best,

Antonello

Hi,

PE is a common exit option for MBB consultants. Although the salary will be the same, role of former consultants is usually different from ex investment bankers. Consultants most commonly work after the deal as board members of the acquired company. Investment bankers instead, work for the deal.

Best,

Antonello

Is PE base salary higher than base salary MBB (if you exclude carry and bonus) and compare same level of seniority (middle-manager/senior associate)? In London and NYC — Anonymous on May 12, 2020 (edited)

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Hello there,

It depends on which 'arms' of PE firms referred to in this case.

  • Generally, the 'consulting arm', such as KKR Capstone, is a common exit option for consultants, as it deals with transformation and turnaround projects similar to what a management consutlant does.
  • The primary 'investing arm' of PE, is a rare exit for a consultant. The typical profile of a PE analysts / associates are going through bulge bracket IB firms in their junior years before getting into a PE firm (which is very limited in terms of number of firms and size of each), this opportunity is still even limited to such IB alumni. Only consultants with adept skillsets in financial valuation, due diligence, investment thesis development, etc, are able to get an opportunity to get in to the team. Getting a headhunter to reeach you out for a role is very doable with a consultant profile, especially from MBB, but to actually excel at it and getting in is quite challenging.

Salary in high-end financial firms such as IB and PE is typically better than management consulting, especially if we consider 'carry'.

Hope it helps.

Kind regards,
Nathan

Hello there,

It depends on which 'arms' of PE firms referred to in this case.

  • Generally, the 'consulting arm', such as KKR Capstone, is a common exit option for consultants, as it deals with transformation and turnaround projects similar to what a management consutlant does.
  • The primary 'investing arm' of PE, is a rare exit for a consultant. The typical profile of a PE analysts / associates are going through bulge bracket IB firms in their junior years before getting into a PE firm (which is very limited in terms of number of firms and size of each), this opportunity is still even limited to such IB alumni. Only consultants with adept skillsets in financial valuation, due diligence, investment thesis development, etc, are able to get an opportunity to get in to the team. Getting a headhunter to reeach you out for a role is very doable with a consultant profile, especially from MBB, but to actually excel at it and getting in is quite challenging.

Salary in high-end financial firms such as IB and PE is typically better than management consulting, especially if we consider 'carry'.

Hope it helps.

Kind regards,
Nathan

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Hello,

Yes, it's a common exit since PE are always looking for consultants.The salary could be a bit higher (depending on the PE) and your tasks and interviews will be different from former bankers.
You can find more details here: https://www.mergersandinquisitions.com/private-equity-interviews/

Best,
Luca

Hello,

Yes, it's a common exit since PE are always looking for consultants.The salary could be a bit higher (depending on the PE) and your tasks and interviews will be different from former bankers.
You can find more details here: https://www.mergersandinquisitions.com/private-equity-interviews/

Best,
Luca

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