I’ve briefly discussed consulting exit options before.
This article is part 1 of 2 that will “deep dive” into the topic (with a precise estimate of the percentage pursuing each).
I considered bumming on a beach in Koh Samui when I left consulting, but for more ambitious folk, here are the main paths:
Mergers and Inquisitions briefly covers this topic in its private equity recruiting post. Consultants are well-suited for private equity jobs – but they need to pick their spots.
- Most consultants exit to middle-market PE firms that are operationally-focused on portfolio companies and leverage consulting skillsets well
- Most consultants exit to PE firms with a tradition of hiring consultants. Golden Gate Capital is one example. Others include Audax and Capstone (the “consulting arm” of KKR)
- Larger shops like Carlyle and TPG prefer consultants with corporate finance project work or prior banking experience (eg, a summer internship at Morgan Stanley)
What are the benefits of leaving consulting for private equity? PE offers better pay, great prestige, and an opportunity to work on industry-shaping deals.
If you want to work in PE and have the opportunity, take it now. It’s easier to enter the industry before business school than after.
What are the best consulting firms to enter private equity? Target the big guys (McKBain Group) and those with a financial sector focus (eg, Oliver Wyman).
Like private equity recruiting, consultants can break into the hedge fund industry but opportunities are limited. Focus on funds where consulting skillsets are valued. For example, equity long-short and macroeconomic funds emphasize market research and operational due diligence in investments. Specialized funds (such as mezzanine debt) would not be a good fit.
What are the benefits of leaving consulting for a hedge fund? Like private equity, hedge funds offer better pay and industry-changing opportunities. This is another industry where entering before business school is easier than after.
Asset management and equity research
Business consulting skillsets are a great fit for jobs in asset management and equity research. Work for the best consulting firms and target modeling-heavy projects.
With all consulting exit options into finance, your path is made easier by taking a finance job to begin with. Investment banking with prestigious M&A groups offers a better shot at strong private equity and hedge fund exits
Consulting provides a strong platform for entrepreneurs – you’re exposed to multiple industries, complex business problems, and a wide network of business-savvy people. I took this path upon leaving McKinsey.
There are 2 options:
- Start a company – this is common across tenures. In fact, Bain was started by a former BCG partner! A colleague of mine is CEO of GiveReal, if anyone wants to send me a drink.
- Join a startup – consulting firms are full of entrepreneurial people, and usually have strong startup communities helpful for recruiting.
That’s it for now. Expect the concluding part 2 on Consulting Exit Opportunities tomorrow (topics include graduate school, Fortune 500, and more).
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