Why Consultants make the move into Private Equity

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What are the motivating factors for Consultants switching into Private Equity?

Private equity is an industry sought by many working professionals. When we look at the junior hiring landscape, the typical move into private equity is from the sell-side and this remains the most sought-after group. However, in recent years there has been a greater push for candidates from consulting backgrounds, especially from McKinsey, Bain & Co, and BCG.

The transition into private equity from another industry can feel difficult to navigate, especially with the uncertainty of whether giving up the industry that you might have spent 3-5 years honing your skillset in is the right decision. We asked some of the ex-Consultants in our network who made the move for their insight into how they knew private equity was the next logical step.

Why the move towards private equity?

For most, the combination of working consultatively within client relationships, flexing their commercial thinking, and the ability to work deeper within the financial services sector were the core reasons why they were attracted to private equity initially.

Many expressed the desire to be part of a holistic process; seeing it from the beginning through to end rather than working on a project for a short period or stage; their work becoming more meaningful in witnessing the impact their work created first-hand. Moving into a longer-term role within a deal means you’re able to be more hands on with the process and gain a greater deal of responsibility.

What is most important to consultants when making that move?

One of the biggest hurdles for many Consultants is understanding how to differentiate the firms in the industry to decide which is best suited to their long-term career goals. Right at the top of the list of essential requirements for most is personal growth and the prospect of career progression. Positive team culture and an excellent wider firm culture were also extremely important factors.

This proves that the name or status of a company is not the most persuading factor anymore, individuals want the promise of progression and positive environments and are willing to sacrifice working in the top companies if it means they’re guaranteed this.

What do you expect during an interview process?

Particularly interesting was finding out what support Consultants would like to see when beginning their interview process. Since their background is vastly different to an investment banker, they raised concerns.

In general, transparency before, during, and after the process was mentioned frequently. One of the biggest concerns raised is most likely being one of the few Consultants within an interview process and fear of an inability to compete with their investment banking counterparts, particularly in regard to financial modelling.

Recently, more and more candidates have been asking for informal chats with potential co-workers in hope of getting a better grasp and further insights into the environment, the responsibilities expected from them, alongside finding out more on the people they could potentially work with. If this would help you to gain a better understanding of culture and ease any concerns, you shouldn’t hesitate to ask.

Making the jump into private equity might feel unfeasible, but ultimately, firms are making the conscious effort to further embed diversity into their teams. Your experience in consulting brings a wealth of knowledge that isn’t replicable in investment banking or other sectors and the advantage this brings to client management or to a deal team is invaluable.

If this is a career move you’re considering, we’re here to help. If you’re a Consultant who has thought about a career in private equity or you’re interested in finding out more about it, please feel free to reach out to me at: lilli.gruendl@dartmouthpartners.com.

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