In this post, we are going to evaluate a dataset of private equity professionals to assess which schools, career paths, and firms produce the highest number of private equity professionals. We will answer the following questions:
Which undergraduate school places the most people into private equity?
Which MBA program places the most people into private equity?
Which firm (investment bank and consultancy) places the most people into private equity?
Like our investment banking target school list, we are going to arrive at this by cataloguing a database of hires and then by ranking each school and firm by number of total placements.
However, unlike our investment banking target school list, we collected this data by hand, going through each private equity firm website and manually recording each entry.
We did this because there are much fewer people at the top private equity firms vs. at the top investment banks. There is also less standardization in LinkedIn job title (lots of people as “Associate”, “Investment Associate”, “Private Equity Investor”, etc.). We also wanted to have more control over data integrity given the smaller universe of candidates and thus wanted to verify each entry ourselves.
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Because this was effort was manual, there are a few caveats and limitations of the data:
The data includes all positions below the Partner / Senior Director role. Our main goal is to understand recruiting paths and we found that many Partners joined the firm several decades ago under very different circumstances.
The data is only based on what was available on the firm website.(Video) Best Private Equity Placement (Top Schools and Banks)
We did this to make sure we could verify every entry and to eliminate the noise from LinkedIn (e.g. people using different titles or not updating when they move jobs). Some larger firms (e.g. Blackstone) don’t include non-senior roles on their website and are therefore underrepresented on the list.
The data only covers “upper middle market / large cap” private equity firms. I cut off the firms at about ~$5B fund size. We would've only done mega funds, but that wouldn't have been enough data.
The data was collected in Q4 2020.
The data only includes New York offices of each firm.
We did this primarily because it would be too hard to standardize placement across all satellite offices. As we’ve discussed elsewhere, satellite offices tend to recruit a little differently (i.e. less competition and less requirements for traditional prestige). This unfairly underrepresents west coast focused firms such as TPG, Vista, Thoma Bravo.
After doing this exercise, we ended up with 16 private equity funds and 290 professionals, of which ~40% were Associates / Analysts.
This is kind of a small data set, but we saw enough clear patterns in the data to feel comfortable working with this.
Let’s dive in.
Best Undergraduate Schools
University of Pennsylvania
There should be no doubt in our mind what the best undergraduate school for private equity is.
The reigning champion for New York large-cap private equity is without a doubt, the University of Pennsylvania, which is home to Wharton. Wharton isn’t just a private equity powerhouse – they’re quite likely the best school for any buyside job, including hedge funds and possibly venture capital.
I can’t even imagine what it’s like to attend Wharton – it must be a crazy pressure cooker, where landing a job at Goldman TMT is viewed as pedestrian and uninspired. People casually exit to the best funds in the world and still feel insecure about their accomplishments.
19% of our data set attended the University of Pennsylvania and Penn had twice the number of professionals as the #2 school, Harvard.
What’s extremely notable is that Penn has so many juniors in private equity.
This is because they send people directly into private equity as Analysts into top firms like Warburg Pincus, Silver Lake and Blackstone. No other school has even close to the level of Analyst track record that Penn has.
The second most represented school in New York large-cap private equity is Harvard – ever heard of it?
Harvard is an amazing place to be if you want to go to the buyside. 8% of this data set went to Harvard for their undergrad. And Harvard likely beats Penn on a per capita basis, but Harvard has a relatively smaller school size.
Importantly, it seems to me that Harvard does not quite have the same Analyst pipeline as Penn. Only 33% of Harvard’s private equity professionals in this data set are juniors. What this suggests to me is that the Harvard folks that choose to pursue private equity tend to climb the ranks well.
Other Top Schools
The playing field is much more even after the University of Pennsylvania and Harvard.
One big theme that emerges when you look at the top schools on this list is that traditional prestige seems to matter more vs. for the investment banking target school list. You have your traditional Ivy leagues in Dartmouth, Cornell, Yale, as well as other overall strong schools like University of Chicago and Duke.
These top schools just don’t have the pure volume and student population to be at the top of investment banking lists, but it’s clear that recruiters and firms are still looking for that kind of caliber and cachet.
NYU and Michigan, which can be likened to investment banking boot camps, do not place proportionally as well into private equity. It’s a bit sad how pronounced their drop-off is relative to investment banking placement.
Ivey Business School (The Canadian Wharton)
I attended this school – and although you might be tempted to believe that I tampered with this data just to stick it to those Cornell kids – I can 100% affirm to you how well Ivey places into private equity.
The Ivey Business School is the top Canadian school for finance. It's also the only Canadian semi-target on the overall investment banking school list and it’s clear that they consistently place into top private equity firms. I would say that Ivey tends to attract the top students in Canada and many students have a laser focus on dominating finance recruiting.
I think a big reason why Ivey places so well on this list is because they have extremely consistent placement into a couple of key firms. They have a dominant representation at Onex (the largest Canadian firm) and good representation at firms like Silver Lake and TPG.
Other Undergraduate Schools
Overall, I also want to highlight how the #20 firm on this list only has a handful of people in private equity. That’s why it can feel so hard when you’re networking and trying to break in. There really just aren’t a ton of top spots available.
There are a number of schools with just 1 or 2 people at the top private equity firms. This might seem disheartening, but I do think that your firm really does matter more. We’ll explore that data point in a moment.
Best MBA Programs
The best MBA program to get into private equity (and likely all of finance) is the Harvard Business School. 37% of all mid-level (and above) positions were occupied by graduates of HBS.
It’s hilarious thinking that there are so many people from HBS in the industry, but it’s true. During my time at Providence, I noticed that every single mid-level person in the New York office either went to HBS or didn’t go to school at all. I mean, going to HBS really is the path if you think about it (2 years of IB, 2 years of PE, 2 years of HBS). Private equity really is just a bunch of smart, polished path followers running around and trading B2B software businesses.
Stanford also places amazingly. However, they are a bit underrepresented because our data excludes the west coast offices. The Stanford school size is also meaningfully smaller than HBS, so it won’t put up the same numbers as HBS.
In general, I’ve also found that Stanford students tend to be less obsessed with private equity / hedge funds.
The same can not be said for Wharton. They’re just much worse at placing into top private equity firms than either HBS or Stanford. They’re 3rd, but it’s a distant 3rd.
Most MBA Programs are Trash for Private Equity
I’m sorry to burst your bubble if you’re a wide-eyed MBA, but the chance of breaking into a top private equity firm if you don’t go to a top MBA is extremely low. Frankly, if you don’t go to the Harvard Business School, your chance of landing a top spot without prior private equity experience is virtually nothing.
I think it’s still extremely possibly to go to a middle market firm, pension fund, or other great investing roles, but the top private equity firms are filled with people who have never strayed from The Path. There are too many exceptional path followers in the world that top firms aren’t incentivized to take a chance on other people.
One extremely important thing to note: a large majority of people in these top spots started as pre-MBA Associates at that firm. That means that people placed into these roles out of banking or consulting and then just stayed there the entire time. Even if they went to get their MBA, they went back to the same firm.
Roughly 2/3 of the mid-level+ people are at firms that they were pre-MBA associates at. This should paint an even grimmer picture for you. Many pre-MBA associate hotshots go to HBS thinking that they can upgrade or change the firm they’re at, but the majority end up right where they started. No shame in that though, you’re still bringing in $500k+.
Lastly, it’s important noting that 43% of professionals have no MBA whatsoever. It’s definitely not necessary to get your MBA if all you want to do is forge a career in private equity.
Best Feeder Firms for Private Equity
The firm with the highest representation into top New York private equity firms is Goldman Sachs.
It’s hard to ignore their dominance, as they have more than 2x their bulge bracket comps of JP Morgan and Morgan Stanley.
In my opinion, Goldman is by far the best investment bank when it comes to buyside and overall exits. There definitely is a certain cachet about the brand and I would say that most people I’ve met from Goldman are bright and hard working.
However, after Goldman, I would say that the playing field is pretty even. If you’re at any respectable, top-10 investment bank, you’ll have a reasonably good shot landing somewhere. The numbers for all of these investment banks are close enough that you could imagine the number of hires and ranking changing on any given year.
PJT (formerly Blackstone) is the best performing elite boutique on this list. However, it’s worth noting that PJT itself is relatively new, as it was spun out of Blackstone in late 2015. Most people included on the list had worked for Blackstone, not PJT. I think PJT is still very strong, but it’s still unclear to me if they will be as dominant as Blackstone was.
Evercore and Moelis also have solid placement for elite boutiques. Elite boutiques are much smaller, so it’s likely they place a little better than JP Morgan (which has very large classes) and potentially in line with Morgan Stanley.
McKinsey seems to place overall the best among MBB (McKinsey, BCG, Bain). I’m more cautious to dub them a clear winner because the numbers are relatively closer (McKinsey with 12 vs. BCG with 8), but it’s my perception that McKinsey is indeed the overall best when it comes to getting into the buyside.
Many consultants don’t even consider the buyside, so it’s incredible that MBB can place similarly to investment banks. I will say that many consultants placed into private equity after going to get their MBA, but it’s still crazy that going to Bain could be better than going to say, Lazard, when it comes to breaking into a top private equity firm.
Unfortunately, there was no other representation outside of MBB on this list from consulting firms. If you’re at a different consulting firm and you want to break into private equity, you should consider potentially first moving to MBB.
From a recruiting perspective, MBB folks definitely also get contacted by all the main headhunters. Most MBB people do not recruit in their first year of consulting, so they tend to interview with more work experience under their belt. Most MBB people will recruit in their second or even third year and tend to be more open to off-cycle recruiting.
Lots of private equity firms don’t hire consultants, but the ones that do tend to always reserve a few spots for them. Hellman & Friedman, Advent, and Bain Capital all tend to hire consultants.
It might feel grim to see this cold hard data, but you should view it as informative. Know that it’s hard for every single candidate to break into private equity. These are some of the most competitive roles in the world and that’s why the lists are topped by the most competitive schools and firms. You'll want to make sure you're fully technically prepped with our Private Equity Recruiting Course in order to maximize your chances of landing an offer.
I would say – if you’re not at one of the firms listed here, then you should consider making a lateral move before you start recruiting. I think firm is more important than school. There are definitely stories of non-targets breaking into top firms, but you won’t even make it on the radar of headhunters if you’re at a B-tier firm.
Private equity firms are typically ranked by their assets under management (AUM) and success in returning gains to investors. The Blackstone Group Inc. had the most AUM out of any private equity firm in 2021.
Overwhelmingly, private equity firms hire: Investment Banking Analysts at bulge bracket and elite boutique banks, as well as a few In-Between-a-Banks.
Your odds at landing a Private Equity job at a top 10 firm is 1 in 300. As of October 2019, the US college population size of students pursing business degrees is 3.9 million,3 according to the National Center for Education Statistics.
- Get into private equity right out of college. ...
- Get a master's degree. ...
- Transition from an engineering career to one in private equity. ...
- Transition from a consulting, accounting or investment banking role.
The firm had more than 15,000 applications for 100 analyst positions, co-founder Steve Schwarzman said on Thursday on a conference call with analysts and investors. That's an acceptance rate of less than 0.7 per cent.
On average, private equity analyst has a total compensation of around $120K. That of associate is from $170K to $270K, of principle is $850K, and of managing director is $1.6M. While you certainly will earn a lot of money if you're in private equity, the salary range can differ based on regions or types of funds.