Several months ago, I wrote about leaving NYC and investment banking without explaining why… As you can tell from the title of this post, I moved across the country from New York City to Los Angeles to start a new career as a private equity investor.
I always enjoy listening to people’s career stories, and I hope my story can be insightful to others. There is a very common career progression in finance which consists of completing an investment banking analyst program and then going to either private equity or a hedge fund. Because it is such an established process, it is easy to “follow the herd,” but I think it is so important to know WHY you want to pursue each step of the process. Everyone has their own story, and here is mine!
So where should I start… I originally had no interest in finance when I first set foot at Swarthmore College. My passion was economic policy, but I figured I needed to gain transferrable problem solving experience first, which is how I stumbled upon consulting. I then went on to found the Swarthmore College chapter of 180 Degrees Consulting, the world’s largest student-run pro bono consulting organization that advises socially conscious non profits and organizations, which I loved and led me to start my first job in consulting.
Surprisingly, consulting is where I was first exposed to M&A and private equity! I was in the finance group, where I worked with private equity firms and their portfolio companies on finance-related operational improvements. I was incredibly fortunate to have worked on The Blackstone Group’s $20bn acquisition of Thomson Reuters’ Financial & Risk division, which is one of the deals that opened my eyes to private equity. I wanted to understand EVERY step of the process. How did Blackstone determine valuation and the appropriate leverage quantum? How did they think through transaction structure? How did they think about value creation? From the seller’s side, how did they communicate the investment merits to investors?
Five months into my consulting job, I realized that consulting was not the place where I was going to learn the answers to my questions — that’s just not in the scope of what consultants do. Lateraling into investment banking made the most sense to me, because I could learn valuation, run a process, communicate with investors, and lastly, figure out if private equity was something I still wanted to pursue. However, almost everyone – even Swarthmore alumni – warned me that it was going to be difficult. Someone literally told me, “I tried to lateral into banking, but it didn’t work, so just go get an MBA. They accept a ton of women these days anyways.” I knew lateraling would be tough, but I wanted to shoot my shot, because private equity is generally open only to investment banking analysts and not post-MBA investment banking associates.
Interviewing for investment banking as a full-time consultant while traveling 4-5 days a week was incredibly stressful. I studied technicals from my 3am Uber rides to JFK until I arrived at the client site. As soon as I got back to my hotel room after a full day of meetings, I studied and practiced modeling until 2am. Whenever I was home in NYC, I basically ran all over Manhattan, networking and interviewing. This crazy schedule went on for a couple months. At the end, on one Friday afternoon, my phone rang from several investment banks calling me with offers and asking me to start immediately. After a weekend of thinking through all my options, I decided to join an elite boutique investment bank and submitted my two weeks’ notice for my consulting job.
I talked a lot about my investment banking experience in my prior post, but to reiterate, I joined the elite boutique for three key reasons: reputation for rigorous technical training, strong deal flow, and a unique generalist analyst program across M&A, restructuring, and capital markets in all industries. I knew it was going to offer a phenomenal learning experience… and it did!
My generalist experience helped me narrow down what I wanted in an investing role. I wanted to be an industry generalist focused on large-cap transactions at a relatively large fund ($5bn+ fund size) with a strong track record and ton of momentum and deal flow. In terms of investment strategy, I was interested in contrarian, value-oriented buyout funds that also have an appetite for engaging in distressed situations.
Geographically, I was open to NYC, Los Angeles, or San Francisco, but I was most drawn to and excited by Los Angeles. A lot of my friends were very surprised when I said I was moving to LA, but I was confident with the decision. Professionally, I was comfortable given that the investment bank I worked for dominates the M&A scene in LA, and I had worked with many LA-based investment firms through my deals. On a personal level, I was ready for a new change, and, as most people know, LA is completely different from NYC. I also had friends who were really helpful in giving me their insights on what it is like to live and work in finance in LA!
Ultimately, I landed a private equity role that not only met all of my criteria but also exceeded my expectations: generalist across industrials, healthcare, and technology at a $10bn (and growing) value-oriented fund with a phenomenal track record – and I already signed a deal! I took a once-in-a-lifetime opportunity and never looked back. I also LOVE Los Angeles. All my friends and family who have seen me in both LA and NYC have said that I look so much happier and at peace here.
The past five years have been a crazy roller coaster ride. After three years of investment banking, I got to my dream job in private equity, and every second was so worth it. Needless to say, this move was a huge positive step in my life.
My takeaways from my experience:
- Patience is key to learning and self-discovery. Take time to understand what you like and don’t like as well as your strengths and weaknesses. The more you know, the more of an informed decision you can make for yourself.
- Do what feels right FOR YOU. I know a lot of people who did not “follow the herd” into the buyside. Some stayed in banking, went to corporate development, or even left finance, because they knew they were not interested in investing. I applaud them for it!
- If there is something you want, don’t wait for it to happen “one day” — make today your “day one.” I said this in one of my earlier blog posts: the first step is always the hardest. Stay disciplined to get past it.
Thank you for reading through this very long post! Hope you found it insightful.
Phyllis
