The top private equity roles for strategy consultants

Last year, we asked current strategy consultants which industries they would most likely target if they were to leave consulting. Private equity was the second most popular choice, mirroring a trend we’ve noticed in the last four editions of our strategy compensation studies.

If you’re a current or former strategy consultant interested in joining a private equity firm, there are two common types of opportunities you will most likely be recruited for: investing roles (also known as deal-side roles) and operating roles (also known as portfolio operations or value-creation roles).

Investing roles:

As an investing professional at the fund level, your day-to-day work would involve participating in due diligence, underwriting and executing transactions. Sourcing business deals may or may not be a part of the role; this typically depends on the firm’s deal-sourcing strategy as well as the exact title of your position.

Many investing roles also entail some level of exposure to the private equity firm’s portfolio companies. Specifically with middle-market consultant-friendly firms, we’ve found that is almost always the case. And if the firm is specifically targeting management consultants for their deal teams, there could be a possibility of the role being considered a “hybrid” position, doing both deal-side and operating work, depending on the firm’s overall structure and where its strategic needs are most prevalent.

Operating roles:

Operating teams (also referred to as portfolio operations or value-creation teams) in private equity firms are most often dedicated to partnering with portfolio companies on strategic projects that will improve the performance and value of the business. These teams help lead elements of the portfolio’s value-creation playbook, which could include strategy, cost cutting, transformation, supply chain, sales force optimization and pricing, as a few examples.

Some teams are structured in a way where you work with a handful of portfolio companies (usually 1-3) for a longer period of time, acting as a “Swiss Army knife” who can assist on any initiative to drive value for the business. Others require a specialist functional toolkit where you are supporting the entire portfolio in a specific functional area like finance and accounting or information technology, for example. We even see individuals on these teams step in to play a key interim role for a short, medium or long-term period for one specific portfolio. Additionally, some of these teams will partner closely with the investing team during the diligence phase of a transaction, while others only get involved once a transaction is complete.

The takeaway:

As many private equity firms continue to shift away from a core focus on financial engineering to a more operationally-centric approach, we’ve continued to see the consulting toolkit as an ideal work experience for private equity firms. As consultants continue to seek out these roles and prove their value within them, we expect to continue seeing consistent talent crossover between the two spaces in the coming years.

To learn more about our recruiting capabilities in strategy and private equity, visit our private equity fund level webpage.