Lateral Hiring Into PE: From Banking, Consulting & Beyond

The traditional route into PE runs through two years in investment banking. But the industry is far more permeable than it was a decade ago. An increasing number of mid-market and growth equity firms actively recruit from consulting, transaction services, corporate development, and even operational backgrounds. This guide covers how to position yourself for a lateral move.

The Consulting Path

Strategy consultants have always had a pathway into PE, but it has traditionally been into growth equity and operational roles rather than pure deal teams. That is changing.

Why firms hire consultants: PE firms value the structured problem-solving, commercial due diligence experience, and client management skills that top-tier consultants bring. Consultants who have done CDD (commercial due diligence) work for PE clients have a direct transferable skill set.

The gap you need to close: Financial modelling. This is non-negotiable. No PE firm will hire you without confidence that you can build and interrogate an LBO model. You do not need to be as fast as a second-year banking analyst, but you need genuine competence. Invest 2-3 months in intensive self-study using case-based modelling practice.

Positioning strategy: Emphasise your CDD experience, your ability to assess market dynamics and competitive positioning, and your project management skills. Frame your consulting work in PE-relevant terms: "I assessed the commercial viability of a £200m healthcare services platform for a PE sponsor" rather than "I worked on a strategy project for a healthcare client."

The Transaction Services Path

Transaction services teams at large accounting and advisory firms are increasingly recognised as PE feeders, particularly for mid-market funds. The FDD (financial due diligence) experience is directly relevant.

Strengths: You understand accounting, earnings quality, working capital normalisation, and the mechanics of deal execution. You have likely worked on dozens of PE-backed transactions and understand what sponsors care about.

Weaknesses to address: Transaction services analysts are often seen as processors rather than thinkers. You need to demonstrate that you can form investment judgements, not just verify numbers. Practice articulating views like "I would/would not invest because..." rather than "The adjusted EBITDA was £12m."

Best approach: Target mid-market PE firms where the deal teams are smaller and your breadth of transaction experience is valued. Many of these firms have direct recruiting relationships with transaction services teams.

Corporate Development Path

Corporate development professionals at large companies manage M&A execution, strategic investments, and divestiture processes. This is an underrated PE feeder.

Advantages: You understand the buy-side perspective, have negotiated deals, and know how to integrate acquisitions. You may also have operational understanding of a specific sector that PE firms find valuable.

Challenge: Corp dev is often more process-oriented and less analytical than PE. You need to demonstrate that you can do bottoms-up financial analysis and model complex scenarios, not just manage deal workstreams.

Making the Transition

Regardless of your background, successful lateral candidates share these traits:

1. They close the modelling gap. You need hands-on LBO modelling experience. Use platforms like Eternal PE Game to practice building models under pressure with real consequences for errors. The interview will test this relentlessly.

2. They develop a sector thesis. Generalist lateral candidates lose to specialists. Pick a sector you know well — ideally one where your previous experience gives you genuine insight — and develop an investment thesis. Be able to talk about specific companies you would back and why.

3. They network aggressively but intelligently. PE is a relationship business. Attend industry events, connect with PE professionals on LinkedIn with personalised messages, and leverage alumni networks. The best approach is to offer value: share a relevant article, a market insight, or a deal idea. Do not just ask for introductions.

4. They accept a potential step-down. Depending on your seniority, you may need to accept an associate-level role even if you were a senior consultant or VP in your previous role. PE career progression is steep, so this is usually worth the short-term trade-off.

5. They target the right firms. Not every PE firm hires laterally. Mid-market funds, growth equity firms, sector-specialist funds, and operationally-focused firms are most receptive. Large global platforms predominantly hire from banking at junior levels.

The Interview Process for Lateral Candidates

Expect 4-8 interviews over 2-6 weeks, typically including:

• Screening call with a recruiter or junior team member
• Case study or modelling test (often a take-home LBO with 3-4 hours to complete)
• Deal discussion where you present a deal you have worked on or an investment idea
• Partner meetings testing cultural fit and investment judgement
• Reference checks that are more thorough than in banking

The case study is where lateral candidates most often stumble. Practice under timed conditions, focus on clear presentation, and always include a recommendation — "I would / would not invest, and here is why."

The Reality

Breaking into PE laterally is harder than from banking, but entirely achievable with preparation. The key insight is that PE firms hiring laterally are looking for a different profile than the traditional ex-banker: they want someone who brings a complementary skill set — commercial judgement, operational experience, or sector depth — alongside sufficient financial competence. Lead with your unique strengths and close the gaps proactively.