Best level to transit from consulting to private equity

Hi anonymous,

Moving into PE is a great idea! A few thoughts and questions come to mind as you consider plotting this move in order to give you better advice: (1) which market do you work in at BCG / or which market are you looking to recruit in for PE? This will have an impact on the questions you have asked. (2) What are your motivations to move into PE? These could include: better long-term comp, longer-term / more hands on involvement with companies (whether via deals or portfolio work) or exposure to the investment side. These questions could also have an impact on how you decide to manage your move strategy. Based on the answer to these questions, there may also be other considerations which open up more options. For instance, is venture capital (incl. corporate venture) also worth considering? I left consulting 2.5 years ago to join what was essentially a mid-state VC.

To answer your questions specifically:

1. The equivalent levels, strictly speaking, in PE (and VC): BCG associate typically translates to Analyst; Consultant typically translates to Associate (potentially senior associate). Associate could also be generically known as “Investor” in VC.

2. The best time to leave also depends on your objectives. Typically, there is a lot more liquidity in hiring at the Analyst and Associate levels in PE - meaning if you wait until post-consultant roles (PL), there'll be less opportunities as PE want “raw horsepower and skills” rather to invest in significant re-training. If you're looking to get into the investment side of the business (e.g: investment analyst / associate) BCG associate is the best time to transition, followed by Consultant. If you're looking for a portfolio role (this is effectively in-house consulting for the PE), Consultant or PL may be appropriate levels for the switch. Do your research to determine what role you want in PE.

3. Again, this depends on whether you're honing in on an investment or operating role in PE (or VC). As mentioned in above points, BCG associate is a good time to start working on this as they are looking for raw mental horsepower and basic skills (e.g: modelling) so you will accumulate less “unrelated” experience.

4. Relative comp is market dependent (and also depend on large vs. mid / small cap PE vs. VC). In the United States and U.K, in mid to large cap, if you transition as Assoc or Consultant, expect parity to -15% on base salary - but remember bonuses are higher so your total comp could increase by 20-30%. VC will pay relatively less than these. If you are in a developing market, the comp in PE may be relatively less vs. consulting.

5. I am not aware of any. Brush up on your case skills to be interview-ready for any problem solving questions but the key thing you need to work on here is specific financial modelling skills (and terminology). You need to know your way around a financial model intrincately. Remember, you will be competing with M&A bankers for these positions so you need to establish relative parity on this front. You will find some advanced modelling courses online you can use.

In summary, either the associate or consultant levels are a good time to transition. If you have your heart set on PE (or VC) then, start investigating, building a network, and applying now - it may take time for the right role to come through and so you might be a C by this stage anyway. Have clarity on why you want to make the move, and map your list of target firms accordingly. Don't only apply for big-cap PEs - consider whether a first-step is a smaller cap PE or VC to get a foot in the door as you work on a longer term transition, and make a final decision based on what roles you land. Remember, junior PE roles, especially in large-cap firms, are highly competitive (you will be up against many ivy-league grads with 2 years M&A banking experience and advanced financial modelling skills), so develop your strategy and think through your points of parity and difference accordingly. Ensure you start doing some cases in the PIPE practice of BCG, if you haven't already, so you can talk about your existing exposure to the space.

I hope this helps, and good luck with your transition!

Hi there,

First, good luck with the transition!

Second, leverage your network. These are all great questions (and excuses) for talking with consultants as well of those who made the switch.

1. What is the equivalent associate role in private equity and equivalent consultant role?

It's going to depend on the firm and where they see you. Get talking to them!

2. What is the best time/level to transition from consulting to private equity? I’m trying to weigh leaving BCG at senior associate level vs at consultant level 

I'd actually say consultant level. But, ultimately, it's when your networking reveals there are open roles and someone will refer you.

As in…when you CAN (if you want to now)

3. How much would my tenure at BCG count in terms of the role I would be eligible for at a PE firm? Would I be going into the entry level role or something els?

The more years, the higher the tenure. Don't overcomplicate this :) But, of course, they're not perfectly transferable skills, so, you need to expect a lateral or downwards move. Depends on the firm and how well you recruit/interview

4. Would I be expected to PE take a pay cut if I transition from BCG consultant level?

Totally depends on the firm.

5. Is there a preplounge equivalent for private equity application?

Leland has a wide range of coaches. Wall street prep is another off the top of my head

Hi there,

First of all, congratulations on your career trajectory thus far!

I would be happy to share my thoughts on your questions:

• First of all, the equivalent roles in private equity generally align with your experience level. For a 2nd year associate at BCG, you might look at Analyst roles in PE.
• Moreover, the best time to transition from consulting to private equity depends on your career goals and the opportunities available. Transitioning at the consultant level might offer more leverage given your experience and network. However, transitioning earlier can give you more time to grow within the PE industry.
• Lastly, your future salary obviously depends on the PE firms you apply to (and potentially any negotiation skills). However, I do not know of any equivalent to PrepLounge for PE (or even IB).

You can find more on this topic here: Salaries in the consulting industry.

If you would like a more detailed discussion on how to best prepare for your upcoming transition, please don't hesitate to contact me directly.

Best,

Hagen

Hi there,

These are all great questions and I would use them as discussion starters for networking efforts with relevant folks in PE.

1. In private equity, the equivalent role to an associate in consulting like BCG is often an 'Associate' as well. For a consultant, the closest equivalent could be a 'Senior Associate', depending on the firm's structure and the individual's experience.

2. The optimal time to transition from consulting to private equity varies. Transitioning at the senior associate level can be beneficial for gaining more responsibility early in your PE career. Transitioning at the consultant level might offer a higher position and potentially more strategic input from the start. Generally, it is easier to transition at an earlier stage of your career.

3. Your tenure at BCG will be valued, particularly in terms of the skills and network you've developed. You're likely to enter at a level above entry, but this depends on the specific PE firm and the relevance of your experience. The more time you have spent on PE projects at BCG the better for your story of course.

4. You would earn more due to the bonus structure. For exact figures, I would check Glassdoor or levels.

5. There isn't a direct equivalent of Preplounge for private equity. However, there are resources like Wall Street Oasis, Mergers & Inquisitions, as well as networking groups on LinkedIn, as well as mentorship programs, and forums that focus on private equity careers.

All the best with the move!

Cheers,

Florian

Hi there!

I see you've received great answers already. 

I would strongly advise you as a next step to actually have conversation with people who are in private equity. This way you can learn directly from the source, develop your network and even find out about job opportunities in this space. 

One starting place is to look at people who have moved from your firm and office into private equity and understand from them how they made this transition.

Best,
Cristian