In more of a hurry than that? A quarter of MBA graduates make it to partner in seven years or less. The median is nine years, and a quarter of MBA graduates take 10 years or more. These results are based on a survey this spring and summer of 36 buyout and growth equity firms with average committed capital to all funds of $1.8 billion. Altogether this year compensation consulting firms Holt Private Equity Consultants and MM&K, along with Thomson Reuters (until early October publisher of Buyouts, prior to its sale to UCG), surveyed nearly 100 North American private equity firms on their compensation practices. The report groups them in some 25 categories, including venture capital, mezzanine and funds of funds.
It takes a little less time, on average, to advance from MBA to partner at venture capital firms in the study—eight years; the median is seven years, while a quarter take five years or less and a quarter take 12 years or more. For mezzanine firms in our sample the climb takes an average of eight years; the median, as it is at buyout and growth equity firms, is nine years.
Sponsors that are part of large institutions like banks and insurance companies tend to promote more rapidly, according to the report. For those firms the average time it takes to advance from MBA to partner is just seven years, and the median is also seven years. More time, by contrast, is needed to reach partner at sponsors of funds of funds. The average span from MBA to partner is 11 years, while the median is 10 years.
Well over half (57 percent) of buyout and growth equity firms responding to the survey said they hire new or recent MBA grads. The figure is 29 percent for venture capital firms in the study, 36 percent for mezzanine firms and 40 percent for funds of funds.