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How to Break Into Private Equity Without Banking Experience

Breaking into private equity without any investment banking experience can be a challenging task. But, while investment banking might be the traditional pathway to a private equity career, it’s definitely not the only way to get there.

Try Management Consulting

One potential route to break into private equity without a banking background is via management consulting. It’s slightly more difficult than breaking in from investment banking, but it’s common enough that you’ll still be able to leverage headhunters and participate in standard on-cycle and off-cycle recruiting.

If you know you’re interested in PE, be sure to reach out to headhunters as soon as you hit the desk. The earlier the better, given how early recruiting kicks off these days.

You’ll want to spend extra time polishing up your modeling skills because you’ll be held to the same standards as bankers. That’s not that big a hurdle though, given how simple most LBO model tests are and the fact that analysts in banking have almost zero experience when they start recruiting.

The other thing to keep in mind is that certain private equity firms are more receptive to consultants than others. Places like Charlesbank or Golden Gate are known for prioritizing consultants, while other firms almost never hire from consulting.

Your headhunter will have this background and know which firms to point you toward, but it’s also helpful for you to know which firms to prioritize. Take a quick look at associate bios on firm websites, or browse profiles of prior associates on LinkedIn – you’ll quickly get an idea of whether there might be an opening for your profile.

Candidates from McKinsey, Bain, and BCG will have the best luck recruiting and will be able to break into almost any type of firm, including megafunds and upper middle market shops.

However, consultants from firms outside MBB will have a considerably more difficult time. You’ll likely be shut off from the largest private equity firms, though you’ll still have a decent shot at the middle market.

Deal-Related Role with M&A Experience

Outside of banking or management consulting, which are the two more traditional routes, your next best bet is to try and jump to PE from an M&A-focused role. Because private equity is all about deal making, they’ll prioritize candidates with exposure to M&A.

Something like corporate development or Big 4 transaction services would provide a reasonable platform to make the move. In CorpDev, you’re evaluating opportunities and getting exposure to the deal process – in some sense you’re making investment decisions. In a transaction advisory role you’re also getting first-hand exposure to sale processes.

However, coming from corporate development or a similar role will shut you off from most headhunters. They’ll already have a ton of candidates that fit the target profile, so it’s tough for them to justify spending their limited time on you.

In this case, you’ll need to hit the street and start networking. Reach out to any friends, alums, former colleagues, etc. that are in private equity. They may have a spot open at their firm, or they can put you in touch with someone else.

If you’ve exhausted your network, feel free to start cold emailing. It’s a numbers game and you won’t get a lot of hits, but eventually you can make something stick.

You won’t have much (or any) luck at megafunds or upper middle market firms. Most more established middle market shops will also turn you away. However, you will have a reasonable shot at breaking in with lower middle market shops or with upstart firms.

Try to target private equity firms that specialize in whatever industry you have prior experience in. For example, if you’re coming from a healthcare corporate development role, look for lower middle market PE firms that focus on healthcare. You’ll be more valuable to them and will have an easier time getting your foot in the door.

Find a Way Into Investment Banking

Rather than looking for a way to break into private equity without investment banking experience, an easier route might actually be to just get some banking reps under your belt.

It’s a bit of a detour, but can save you some trouble (plus improve your ultimate outcome).

If you’re early in your career, consider lateraling into an investment banking analyst position, even if it means starting as a first-year analyst. 

Keep in mind, this transition can be tough if you’re not in a related role. Your greatest chance of success will be a switch from something like transaction advisory, capital markets, corporate development, and corporate finance.

Same deal – network, cold email, and just generally be relentless. You won’t land a spot immediately, but you will eventually, with enough persistence.

If your ultimate goal is private equity, the name brand of your bank matters. Perhaps even more so given you’re now making up for a non-traditional path on your resume. Target any top firms, but avoid taking an offer from a small regional boutique, as that won’t actually improve your prospects for breaking into PE.

Once you’ve landed an analyst spot, now you can get yourself on the normal PE recruiting timeline. Reach out to headhunters for your initial discussions and start prepping. Depending on your lateral date, you may need to wait a certain amount of time before on-cycle, but you’ll likely get some looks if you’ve landed at a decent bank.

Otherwise, you’ll have plenty of opportunity when off-cycle recruiting roles around. 

Break Into Private Equity Via Post-MBA Investment Banking

The other option you’ll have is to get yourself into banking via an MBA. 

The pathway from MBA into investment banking is significantly easier (higher probability) than trying to lateral, though it may take more time.

Banks have established recruiting programs for MBA hires. It’s their primary pipeline to bring on career bankers, so you’ll have plenty of opportunities to land a spot (as long as you come from a solid MBA). 

But, instead of staying on as a career banker, you can still make your jump to PE.

That said, you will have an uphill battle and it’s going to be more difficult than making the jump as a banking analyst. Again, it’s important that you get into the strongest bank and strongest group possible, because this will only improve your chances.

After ~6 – 12 months on the desk, start reaching out to private equity headhunters. You won’t be on their radar otherwise, because they’re only focused on analysts. You’ll need to have a tight story on why you’re interested in private equity (and expect to get grilled).

You won’t be able to participate in standard on-cycle recruiting, but you’ll probably be able to worm your way into some off-cycle processes.

Note that this path will severely limit the type of private equity role available to you. The most realistic options at this stage are lower middle market and smaller middle market firms. 

You’ll also still come into private equity as an associate. That can be totally fine, but be aware that you might be quite a bit older than your peers and will have put in a lot of effort to still start at the bottom.

Other Options to Break Into Private Equity Without Banking

If none of these options interest you, you can still try to “brute force” your way in. No guarantees this will work, but enough networking and cold emailing can have surprising results.

Pull together a list of every lower middle market private equity firm you’d be interested in working at. You’ll need to be geographically agnostic and reach out everywhere.

Shoot over an email to VPs on the team and express your interest. Hop on the phone and make your case. You’ll be rejected 99% of the time, but you only need one “yes.”

Sam Hillier

Sam Hillier is a reporter at Transacted, covering private equity and investment banking. He previously spent time as an investment professional focused on direct buyouts, as well as an earlier strategic advisory stint.