Lateral from BB "weak group" to stronger BB / EB group for better PE exits? If so, how?
Hey everyone,
I am currently an incoming IB analyst going to the perceived "weakest" group in a mid-tier BB that has disappointing exits. No one (according to my research and conversations) has exited to a strong PE fund in a couple of years. Was wondering if lateraling to a much stronger group — either at an EB / BB group in my industry and region — helps with my buy-side recruiting process? If so, do I just tell headhunters to wait a year and delay this year's process? If not, should I try my luck this year anyway despite the lack of precedents? (I do have an otherwise fitting background with PE internship experience, target school and good GPA. I know exactly the type of funds I want to end up in. Unfortunately just couldn't find anyone from my group who went there.)
Would also appreciate any advice on when to apply for lateral positions, how to prepare, whether networking is needed and any other information on this process. Thanks so much!
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Is this a FIG/RE/energy type group? Otherwise yo ushould be ok
It's a more general group (Healthcare / Consumer / Tech), but the exits are just not great
Exits probably haven't been great historically because of the quality/preparedness of the candidate, not because of the group. A coverage group from a BB should be "prestigious" enough to get you looks at most PE firms.
If you practice the modeling/technical aspect enough, you should be fine I think.
What if it's a RE group? Worth it to lateral?
Yes - if it’s an RE group and you want to do corporate buyout, definitely try to lateral
even at a mid-bb (citi/bofa) with target school?
It’s not what you want to hear - but yes.
appreciate the honesty. could I hear your reasoning why? I've asked a few people and they said just to go do on-cycle.
Headhunters control a lot of resume flow, if they see you are from an RE group they won’t be convinced you have what it takes to do PE recruiting. I personally think it shouldn’t matter but just highlighting how the HHs will think.
In my seat if I have a candidate that’s doing RE and a candidate that’s doing xyz other industry, I’m going to favor the xyz coverage because it’s more directly applicable. Your 2 years in RE are going to teach you a bunch about RE companies and assets but in corporate buyout we don’t really care about cap rates and FFO and NOI - the skills you learn from that perspective just aren’t apples to apples compared to what a healthcare/industrials/consumer analyst would learn.
There exists an REPE world which is pretty active and people are always going to assume that’s your default exit opp. You’ll have to explain why not RE + why PE vs. just why PE.
All that being said - you can definitely do corporate buyout from an RE coverage group. I have no doubt about it. But if you want to maximize your chances and have more confidence in your exit opp set when it comes to recruiting, lateral to a different coverage group.
Think: if you find it hard / annoying to lateral into a coverage group right now, that lateral process is only [1/5th] of how hard PE recruiting is. Spend the time and put in the effort now so you can 1) make it easier in the future 2) broaden your exit opp set and 3) have more (but not full) certainty
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create search filters on the job search sites (indeed) for the groups and positions you are looking for...i see these all the time...when one opens up..apply to lateral...work for 1 year...and then the exits you are seeking should be easy
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