How are investment bankers evaluated during recruitment for private equity?

Based on the most helpful WSO content, investment bankers transitioning into private equity are evaluated on several key aspects during the recruitment process:

1. Behavioral Questions: Candidates should prepare for a range of behavioral questions. Common inquiries might include motivations for choosing their college, major, current job, and specifically, their interest in private equity. This helps assess cultural fit and personal motivations.

2. Technical Skills and Deal Experience: Even if a candidate is a first-year analyst and might not have extensive deal experience, it's crucial they can discuss any relevant experience they do have. This includes tasks like spreading comps or building DCF models. More importantly, candidates should demonstrate an understanding of why a particular deal or company makes a good private equity investment.

3. Due Diligence Skills: Candidates are expected to have a strong grasp of due diligence processes. This includes understanding industry dynamics through frameworks like Porter's Five Forces, analyzing company operations (e.g., growth in price or volume, cost structures), scrutinizing financials (like those in a paper LBO), strategic initiatives, and potential exit strategies.

Regarding the verification of a banker's claims about their deal experience and performance, it's common for private equity firms to conduct thorough reference checks. They might also ask for detailed descriptions of the candidate's role in specific transactions, looking for consistency and depth in their understanding. In some cases, candidates might be asked to walk through financial models or deal memos they've prepared, albeit without revealing sensitive or proprietary information.

To prove your accomplishments and stand out: - Document Your Contributions: Keep a record of your contributions to deals, noting specific tasks you handled or contributions you made that led to successful outcomes. - Gather References: Maintain strong professional relationships with supervisors and colleagues who can vouch for your skills and contributions. - Prepare a Deal Sheet: This should list the deals you've worked on, along with a brief description of the role you played in each. This can be part of your resume or a separate document to share during interviews.

These strategies can help substantiate your claims and demonstrate your capabilities to potential private equity employers.

Sources: Private Equity Recruiting Process (From Banking), Private Equity Recruiting Process (From Banking), How to learn to evaluate investment? (PE case study interview), PE professional, what's your process while judging an investment?