Consulting to Private Equity: How to Move from PowerPoint to Poison Pills

Along with “influencer” and “digital nomad” coaches, there’s an abundance of trainers eager to teach management consultants the secrets of moving into private equity.

It makes sense: Consultants love to complain about their jobs, and they have the money to spend on career training.

But you must be careful.

While it is possible to move from consulting to private equity, it is not necessarily probable.

If you want to do this, your success depends heavily on your current firm and the types of PE roles you target.

Before explaining the step-by-step process, I’ll start with a more basic question: Should you even attempt this move?

Should You Make the “Consulting to Private Equity” Move?

There are many articles on this site about private equity and management consulting, so I won’t repeat the basic definitions and career paths here.

If you’re currently in consulting, private equity offers you higher potential compensation, arguably more impactful work, and more ownership in your work over longer time frames.

This is because you invest in companies, hold them for many years, improve them over time, and eventually sell them – unlike consulting, where most projects last for weeks or months.

On the other hand, there are downsides: The work/life balance is much worse due to longer and more stressful hours, there’s less job stability, it’s less collaborative, and it’s normally harder to advance to the top (Partner).

This is because Private Equity Partners have little incentive to bring new individuals into the partnership unless they need to because they’re raising significantly larger funds.

Otherwise, any new Partner simply makes their economics worse. And by the time they’re at this level, their jobs have become easier, so few people leave due to “burnout.”

There is another downside as well: Consultants are not well-positioned to win offers in deal teams at private equity firms.

They’re in a prime position to win offers in value creation teams or in operational groups at PE-owned portfolio companies, such as corporate strategy, partnerships, or business development.

So, if your main goal is to “earn more” or “do more exciting work,” you should start by considering these careers.

If you have your heart set on deal-based investing roles, you must really like working on transactions, and you must be prepared to go through a long and murky recruitment process.

Consulting to Private Equity: *Can* You Make This Move?

Not all consultants are plausible candidates for PE roles, so you need to take an honest look at your background and pedigree to assess your chances.

First, doing this post-MBA is difficult, if not impossible. If you’re in this position, just go for value creation or portfolio company roles.

Second, brand name and pedigree are extremely important, so your chances are far higher if you’re coming from MBB (McKinsey, Bain, and BCG).

Yes, it’s still possible to get into PE coming from Tier 2 and 3 consulting firms, but the odds are very much against you.

Even points like your undergraduate university and GPA may come into play for the same reasons.

Finally, you should ideally have client engagements related to M&A deals or private equity, such as commercial due diligence on potential acquisition targets.

If most of your projects have been social media marketing campaigns to sell organic energy drinks to chicken farmers in Africa, it will be much harder to tell your story.

There is no strict timeline, but don’t wait too long to make this move because you want to be a credible candidate for Associate-level roles.

If you have 2 solid client engagements, and one of them is finance-related, that’s probably enough to get started.

Consulting to Private Equity: The Step-by-Step Process

The overall process looks like this:

1. Step 1: Create a List of Targeted PE Firms – Make a list of “consulting-friendly” firms in your region and find connections to them in your personal network(s).
2. Step 2: Craft Your Story, Highlight Your Strengths, and Prepare for Objections – Before you do any networking, you need to lock down your story and prepare for the most common objections (e.g., lack of technical skills/deal experience).
3. Step 3: Start Networking with Firms and Recruiters – This could be a long process, depending on your alumni network, co-workers, and access to headhunters.
4. Step 4: Prepare for Interviews and Case Studies – As you’re networking, you should also be preparing for technical interview questions and case studies on a range of topics.
5. Step 5: Reassess Your Situation and Plan Next Steps – If you win an offer, great. If you spend 6 – 12 months on this process and are not close to winning anything, figure out what went wrong, ask for feedback, and determine your next steps.

Step 1: Create a List of Targeted PE Firms

If you took my advice and targeted value-creation roles instead, this part is easy because nearly all mid-sized-to-large PE firms have operational teams.

You can go through the lists of mega-funds and middle-market private equity firms on this site, search your LinkedIn connections for anyone working there, and go from there.

If you’re set on a deal-based role, you could focus on smaller or startup PE firms in your region, under the logic that they’re more open to non-traditional candidates.

However, I still suggest starting with larger firms – middle-market or above – because they’re better equipped to handle recruitment.

So, here’s a list of some “consultant-friendly firms” in that category:

 

Historically, Bain Capital and Golden Gate Capital are both known for hiring many consultants (Bain for obvious reasons).

Hellman & Friedman and Advent Capital often hire “split classes” of bankers and consultants, and Altamont, a Golden Gate spin-out, is also consultant-friendly.

Other firms known to hire consultants include AEA, Apax, Audax, AVALT, Berkshire, Charlesbank, Cove Hill, Friedman Fleischer & Lowe (FFL), Insight, Lee Equity, Madison Dearborn, New Mountain Capital, Parthenon, Serent (McKinsey co-founder), Sycamore (they like retail consultants), and TSG Consumer.

A few sources claim that Warburg Pincus and Francisco Partners also like consultants, but it seems like hiring is more sporadic there.

Among European PE firms, EQT, CVC, and Permira are also consultant-friendly, but it’s unclear whether this applies across all locations or only to a specific region.

On the growth equity side, TA Associates and Summit have both hired plenty of consultants before.

It’s always worth reaching out to the top PE headhunters (Amity, Ratio, CPI, SG, Gold Coast, etc.), especially if you can get a warm introduction.

You could also contact some consulting and “general executive”-type recruiters, such as Charles Aris, Spencer Stuart, Korn Ferry, and Heidrick & Struggles.

But you’re likely to have the highest probability of success by going directly to the professionals at the firms you’re targeting and making your case to them.

Step 2: Craft Your Story, Highlight Your Strengths, and Prepare for Objections

As a starting point, make sure you’ve reviewed the templates and example answers in the “Walk me through your resume,” fit question, and buy-side resume walkthrough articles.

The key differences in your story and fit questions for PE roles include:

1. Consulting Was Your Plan All Along – In your story, you need to make it sound like you purposely went into consulting and that you were not interested in IB for reasons X, Y, and Z.
2. Timing – Since you’ll be using mostly off-cycle PE recruiting, you can focus more on your current consulting role rather than relying on university internships in your “Growing Interest” section. Your “Spark” should be from a finance-related client engagement.
3. Strengths – Play up strengths that IB Analyst candidates will not have, such as leadership skills, more exposure to senior executives, and a better understanding of how to evaluate operational changes and growth plans.
4. Weaknesses – Your story should not explicitly address your weaknesses, or it will be far too long. But you should be prepared to answer follow-up questions about every single potential problem a consultant might have (lack of technical/modeling experience, no deal experience, inability to work long/stressful hours, etc.).

A story outline might look like this:

• Beginning: Mention your university, summarize your internships, and explain why you pursued consulting rather than banking (e.g., you wanted operational experience that you could eventually use to improve companies).
• Spark: Describe a client engagement that made you interested in private equity rather than internal operational roles at companies (e.g., you conducted due diligence on a growth-stage cybersecurity company and saw ways to reorganize the entire company to improve margins, but it was only possible to implement this as the owner).
• Growing Interest: You then pushed for assignments to similar projects, such as expansions or growth initiatives for PE-owned companies. You also started learning about deals, valuation, and financial modeling on your own.
• The Future and Why You’re Here Today: You’re especially interested in Industry A or Deal Type B from your time in consulting, and moving to PE Firm X would allow you to work on deals and build value over the long term using the operational skills you gained in consulting, plus the finance skills you have learned along the way.

To address the most common objections:

• Why Didn’t You Do Banking First? – You were always more interested in helping companies grow and felt you would learn the most valuable parts, such as how to win executive buy-in and implementation support, by working in consulting. You do learn valuable skills in IB as well, but in your view, it’s easier to learn those skills outside of a client/deal context.
• You Have No Financial Modeling Experience – Point to any self-study you’ve done, relevant university classes, the CFA, or the models you’ve worked on for client engagements. If you’re very confident, offer to complete a timed, on-site modeling test.
• You Haven’t Led Deals Before – Point to the client engagements where you had to win buy-in from different parties and coordinate multiple groups to get the project done. It’s not the same as working on an M&A deal, but the key challenges are similar (winning agreement and getting information from different teams).
• Can You Work Extremely Long Hours? – Point to any 3-4+ month periods in which you had to work at least 60 – 70 hours per week. Think: Dual degrees from university, multiple internships, a full-time job + a side hustle, or a university degree + part-time job + difficult family/personal issues.

Step 3: Start Networking with Firms and Recruiters

I don’t have much to add here over the existing articles on networking, PE recruitment, and headhunters.

When you reach out to your connections at PE firms, always ask for advice and take more of an “informational interview” approach.

Aim to send 5 – 10 customized, highly personalized messages per week, and try to set up 1 – 2 calls with bankers. If you’re in a rush, double these numbers.

Focus the initial call on your questions about moving into the industry and the person’s background, and save your more detailed, follow-up questions for emails and calls after that.

After the initial calls or meetings, the process consists of following up repeatedly (every few weeks at first and eventually once every few months) and adding to your networking list as you move along.

If you contact recruiters, you need to be direct and very specific with your requests:

“I am interested in middle-market, operationally focused firms that invest in industrial and consumer companies with between $50 and $200 million in revenue.”

Step 4: Prepare for Interviews and Case Studies

You don’t need to know all the technical concepts in-depth to start the networking process.

As it advances, however, you should spend at least a few hours per week studying the most important points.

By the time interviews begin, you should be comfortable with everything in the investment banking interview questions and private equity interview articles on this site.

The most important topic areas are accounting, the financial statements, valuation, and LBO modeling; LBO modeling is the most tested topic in PE interviews.

Topics like merger models and credit analysis are less important.

You could learn these concepts in many ways: Courses, books, a private tutor, free YouTube tutorials or articles, online quizzes, etc.

Pick a method that fits your schedule, learning style, and budget, and stick with it.

The most common types of case studies are:

1. Consulting-Style Cases where you evaluate a company and make a recommendation on its strategy, growth plan, product line-up, etc. You should be good at this by now.
2. 3-Statement Modeling Cases like the free example on this site, where they give you a company and ask you to build a model from scratch or complete a template. This could also take the form of a growth equity case study, with slightly different output.
3. LBO Modeling Cases, also like the free example on this site, where you either build a model from scratch or complete a partial template.

You should aim to complete at least 8 – 10 practice case studies as you move through recruiting, ideally split between these categories.

Block out time on Saturday or Sunday, attempt a 1- or 2-hour case each week, and then check your answers or ask friends for feedback.

Step 5: Reassess Your Situation and Plan Next Steps

All off-cycle PE recruiting processes tend to drag on (2 – 3 weeks between interviews, several months to advance to the final round, etc.).

So, you won’t be able to assess your results for many months.

The speed of the process depends more on the firm’s hiring needs than anything else.

If an Associate just quit, and they need a replacement ASAP, they will move quickly; if not, expect long waits.

If you win an offer, we recommend accepting it ASAP rather than waiting or trying to “negotiate” a better one.

It’s already incredibly difficult to make this move, and you don’t want to do anything that could result in a rescinded offer, such as not appearing interested.

If you’ve been recruiting for 6 – 9 months and you haven’t come close to winning a PE offer, you need to assess what’s going wrong and what your next steps should be.

For example:

• The Wrong Firms – If you got poor responses from the larger firms, maybe you should target smaller/startup firms and see if they’re more responsive.
• Interview Objections – If you kept running into objections about your lack of deal/finance experience, maybe get some more relevant projects at work or consider a move into investment banking.
• Pedigree – If a Tier 2/3 consulting firm or a non-target university held you back, consider a lateral move to MBB or a Master’s in Finance at a top school (depending on your level of commitment… this could also be a bad idea).

If it’s not realistic to “fix” your issues within a reasonable time frame, put your plan to win a deal-based PE role on hold and consider the alternatives.

I do not recommend doing a top MBA because it won’t improve your chances; transitioning into PE from any field gets even harder at the post-MBA level.

Consulting to Private Equity: The Promised Land?

If you’re currently in consulting, I would never tell you to avoid private equity roles.

But I would give you a strong warning that it’s extremely difficult to win deal-based roles in the industry.

If your main goal is to “earn more” or “do more exciting work,” there are many other options, such as value creation teams or corporate strategy/development at PE-owned portfolio companies.

Also, while PE roles at mid-sized-to-large firms pay more than management consulting jobs, the biggest compensation differences emerge at the top levels because the average PE Partner could earn a multiple of what the average Consulting Partner earns…

…but there’s no guarantee that you’ll reach that level, even if you’re quite good at the job itself.

Plenty of other factors, such as office politics, overall fund performance, retirements, and expansion plans, come into play, making promotions challenging and unpredictable.

So, knock yourself out aiming for private equity roles, but keep in mind that the industry itself might be less of a promised land and more of a poison pill.