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Chances of breaking into Private Equity

Happy new year AFers, 

Hope everyone had a good holiday. I am creating this post in hope some of you more experienced folks here can share some insights on the career path I am considering. I’m from Canada and I currently work as a credit rating analyst in one of the major banks in Canada. The natural (or at least the most common) progression of our role inside of the organization is to transition into corporate banking 3-5 years down the road based on education and experience level. However working on the credit side is not truly my passion, hence I’ve explored other avenues with inside of the organization. I spoke with a senior from the private equity team at our firm, and he mentioned they do hire ppl from time to time by 2 different avenues. One, as an analyst, usually new grads from top schools in Canada. Two, as an associate, they usually hire ppl with more experience for this role. And he recommended me to either go back school for a MBA or trying to get into the corporate banking team and get some years of transactional experience under my belt before applying. But nothing is guaranteed and the competition is extremely high. Close to a quarter of my colleagues have CFA, and maybe another quarter have CPA or MBA. Some of them even have both. And I graduated from a non target school, if it wasn’t for CFA I might never get in here. And looking externally is not really a great alternative either given the opportunities available in the area, I’m not in Toronto or Montreal. Moving is also painful given the fact I have young family and recently bought a house. So I am considering a MBA maybe next year, and my choices are limited cuz I can’t afford to go full time. Based on my research the only target school I am able to do part time in my city is Queen’s university, but they’re not the best MBA, probably ranking the lower spectrum of the target school based on what I heard ( could be wrong). 

So if I do this MBA and maybe also get in to corporate banking, what do you think my chances of getting into PE are after I followed thru the plan? And any alternative you could recommend?

Many thanks!

If you are not able or willing to get into a better MBA program or take other steps to improve competitiveness, what do you have to offer that other candidates don’t? The guy just gave you good information of candidates that they are interested in. If you are not willing to work and sacrifice to enter that profile, then maybe this path is not for you.

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

Yeah, what Ohai said.

You basically want to get into a very competitive and selective portion of the industry but without competing or making the sacrifices.  Reading your litany of excuses was somewhat pitiful.  I find in life when I know my preparation is adequate is when the reward feels less like winning a prize and more like getting what is owed to me, this generally occurs after you’ve put in the work and it is clearly obvious. Going the alternate route through corporate banking is playing much longer odds, both require you to separate yourself from your peers but the corporate banking route means truly being set apart in that field from a performance standpoint.  These sacrifices are why people get paid, whether it be lawyer, doctor or otherwise.

#FreeCVM #FreeTurd #2007-2017

Black Swan wrote:

Reading your litany of excuses was somewhat pitiful.

Had he used paragraphs it would have been much less painful. 

Black Swan wrote:

Yeah, what Ohai said.

You basically want to get into a very competitive and selective portion of the industry but without competing or making the sacrifices.  Reading your litany of excuses was somewhat pitiful.  I find in life when I know my preparation is adequate is when the reward feels less like winning a prize and more like getting what is owed to me, this generally occurs after you’ve put in the work and it is clearly obvious. Going the alternate route through corporate banking is playing much longer odds, both require you to separate yourself from your peers but the corporate banking route means truly being set apart in that field from a performance standpoint.  These sacrifices are why people get paid, whether it be lawyer, doctor or otherwise.

Thanks for the reply, so you would recommend getting a top notch MBA instead of taking the corporate banking route? 

Sweep the Leg wrote:

Black Swan wrote:

Reading your litany of excuses was somewhat pitiful.

Had he used paragraphs it would have been much less painful. 

Will work on my writing skills next time I post something :)

ohai wrote:

If you are not able or willing to get into a better MBA program or take other steps to improve competitiveness, what do you have to offer that other candidates don’t? The guy just gave you good information of candidates that they are interested in. If you are not willing to work and sacrifice to enter that profile, then maybe this path is not for you.

Getting into corporate banking is the natural progression of my current role, just takes time and need to work harder. Doing a full time top notch MBA is a different ballgame (financial hit, time away from family etc.). Do you think one is necessarily better than the other?

Asianrepresents wrote:

Thanks for the reply, so you would recommend getting a top notch MBA instead of taking the corporate banking route? 

Asianrepresents wrote:

Getting into corporate banking is the natural progression of my current role, just takes time and need to work harder. Doing a full time top notch MBA is a different ballgame (financial hit, time away from family etc.). Do you think one is necessarily better than the other?

Let me combine these two.  If you get an absolutely top tier MBA full time, that is often a better route to a transition like that.  You have brand name recognition on your side and two years working within a recruiter targeted environment to exclusively focus on your career transition.  The internship also helps establish a foothold for your exit.  Nothing is a given, but this is a reasonable track if you are focused and driven.  I’m unsure of the size and scale of PE in Canada though and if you are completely mobile would consider a top US school with the size of the PE market here.

If going back full time is hard to realistically swing, you MIGHT get there through corporate banking.  But be aware that there are a lot of corporate bankers and very, very, very few from that pool make it into PE.  It happens and I have a friend that did that but its a much smaller subset and he was extremely fortunate to be able to jump from corporate banking to IB to PE.  He also had to outwork everyone and separate himself from the pack for a ~five year period while networking aggressively to make it happen.  He was the type of employee that when he tried to leave the corporate banking firm, the firm (a major one) fought to keep him and guaranteed him a substantially upgraded role if he chose to return later. 

So corporate banking is not an easy route nor a guaranteed one and if you already need to work harder to get to corporate banking then that doesn’t bode well for what it would take from there to get to PE.

#FreeCVM #FreeTurd #2007-2017

Also be aware that age may start to become a limiting factor for these transitions as you cross into your 30’s.

#FreeCVM #FreeTurd #2007-2017

Black Swan wrote:

Asianrepresents wrote:

Thanks for the reply, so you would recommend getting a top notch MBA instead of taking the corporate banking route? 

Asianrepresents wrote:

Getting into corporate banking is the natural progression of my current role, just takes time and need to work harder. Doing a full time top notch MBA is a different ballgame (financial hit, time away from family etc.). Do you think one is necessarily better than the other?

Let me combine these two.  If you get an absolutely top tier MBA full time, that is often a better route to a transition like that.  You have brand name recognition on your side and two years working within a recruiter targeted environment to exclusively focus on your career transition.  The internship also helps establish a foothold for your exit.  Nothing is a given, but this is a reasonable track if you are focused and driven.  I’m unsure of the size and scale of PE in Canada though and if you are completely mobile would consider a top US school with the size of the PE market here.

If going back full time is hard to realistically swing, you MIGHT get there through corporate banking.  But be aware that there are a lot of corporate bankers and very, very, very few from that pool make it into PE.  It happens and I have a friend that did that but its a much smaller subset and he was extremely fortunate to be able to jump from corporate banking to IB to PE.  He also had to outwork everyone and separate himself from the pack for a ~five year period while networking aggressively to make it happen.  He was the type of employee that when he tried to leave the corporate banking firm, the firm (a major one) fought to keep him and guaranteed him a substantially upgraded role if he chose to return later. 

So corporate banking is not an easy route nor a guaranteed one and if you already need to work harder to get to corporate banking then that doesn’t bode well for what it would take from there to get to PE.

Thanks for the elaboration, what you said there echo with what I read online.I was confused about that corporate banking route as well, given the conventional transition into PE is usually thru IB. I guess the reason they brought up the corporate banking path was because our firm tends to hire a lot of positions internally and we dont have a IB department to make that traditional transition. And I just turned 30 this year.

Well, I guess MBA it is then!

It’s worth considering whether you are so hell bent on PE or if a good career in corporate banking would be better?  Seems more probable, you can probably get there quickly, no lost income during MBA or tuition cost, hours are nice, stable, etc.

To outperform you’d have to count cost of two years of lost income plus tuition and estimate the payback ABOVE what you would have earned?  It’s also worth considering that MBA deadlines for top schools this year have passed, you will have to get ~99th percentile test scores (usually takes a few months) write all of your essays, get materials together etc. and will be targeting the 2023 (enter fall 2021) graduation.  Most top schools are targeting 24-28 year olds, if it is not a truly elite school you are taking a bigger gamble.  It’s still plausible but will not be simple.

It’s always a good idea to contemplate your career and goals and form a 5 year plan and routinely update.  I’m just offering a realistic view of what it takes to get to PE and what the challenges and moving pieces will be.

#FreeCVM #FreeTurd #2007-2017