When's the best time to quit banking for Carlyle, KKR or TPG?
You're fed up with being an analyst or associate in an investment bank. Like every other junior IBD professional, you want to move to the buy-side. - Specifically, you want to move to private equity. So, when's the best time to quit?
We looked at 30 former investment bankers who left a variety of leading investment banks for three top private equity funds in London - Carlyle, KKR and TPG. The takeaway? Most people who quit banking for private equity do after 24 to 34 months in IBD.
Charlie Hunt, principal consultant at PER, a private equity recruitment firm, said you might even want to leave earlier: "You ideally want to leave sometime between being a second year analyst and first year associate."
If you're going to quit for private equity, you need at least one year's deal experience, says Hunt. Although we came across assorted people who quit banks like Goldman, Morgan Stanley and Credit Suisse for KKR with anything from 49 months to 60 months' IBD experience, Hunt says the move across becomes harder the longer you leave it. "It's more of a gamble when you wait. Moves at that level usually only happen when you know someone in the fund," he said. Most of the people moving across with that level of experience joined as principals rather than associates.
Of the three firms we looked at, one seems to prefer its associates with a little more experience than others: KKR. On average, KKR's associate hires have three years' investment banking experience, compared to closer to two and a half at Carlyle and TPG.
While leading private equity firms like to hire from leading banks, they seemingly like to hire from one bank more than the rest: Goldman Sachs. - Around 40% of the associates in our sample worked for Goldman before making the move.