How Do I Get Into Private Equity?
For those that don't know, private equity firms invest in a company, take a majority stake, improve the company and then exit their investment at a large profit. In order to magnify returns, PE firms make use of leverage (borrowed money) to conduct Leveraged Buyouts (LBOs).
Read a detailed guide to Private Equity on WSO. This guide goes through the basics of the industry, and where you can get started.
How to Get a Job in PE?
There are several common paths to make it into private equity:
- Investment Banking - This is by far the most common way to get into top tier private equity firms. These firms recruit top analysts out of investment banking analyst programs. Analysts interview for PE shops early in their first year and then work at their banks for 2 years before moving over
- Direct from Undergrad - While less common, PE firms have been creating post undergrad programs to hire students direct from university. Learn how to jump straight to the buyside on WSO
- Consulting - Similar to banking, some PE shops recruit top candidates out of consulting firms as their skills are applicable to the management changes that are needed at PE holding companies
- Post MBA - After going through a top 10 MBA program, there is a chance to go through the PE recruiting process - however, this is less frequent as often times PE shops will prefer to hire candidates who worked in PE before going to get their MBA
how to break into private equity without experience?
It will be very difficult to get into private equity without experience in IB or PE and without having gone to a typical target school. However, it is not impossible to break into the industry.
- The best chance is to get a strong job in the financial services after you graduate and then attempt to move into investment banking laterally. This will require a great deal of cold networking and studying on the side of your main job.
- Read more about cold emailing on WSO.
- If you are able to successfully lateral into IB - then you can attempt to go through the more traditional PE recruiting process. You should focus your energy on networking intensely with small and middle market private equity shops that might be willing to hire candidates in non-traditional ways.
Understanding Private Equity Fundamentals
Check out the video below for another overview:
Read More About PE Recruiting
- Consulting to Private Equity
- Path to PE Post-MBA w/o pre-MBA banking experience
- Wanna Jump Straight to the Buy Side?
Interviewing for Private Equity Jobs?
Want to land at an elite private equity fund try our comprehensive PE Interview Prep Course. Our course includes 2,447 questions across 203 private equity funds that have been crowdsourced from over 500,000 members. The WSO Private Equity Interview Prep Guide has everything you’ll ever need to land the most coveted jobs on Wall Street.
Brutal truth and you may dislike me for this, but even if you don't believe it, at least hear it; there is little hope. Here's why. PE firms look to recruit from IB, especially with regards to 2 years in IB post undergrad since there is a recruiting process. However, most of these firms will kick you out after 2 years to go do something else. For those who want to continue to do PE, they have to get their MBA at a top program and then recruit to be a post-MBA associate. Even then, many of these roles will never lead to the partner track where you are making operational changes and raking in real money. It is virtually impossible to get one of these post-MBA associate roles in PE unless you've done PE pre-MBA. Considering that you won't be able to get into a PE shop pre-MBA since you haven't done IB (or MBB consulting for some shops), this will not be possible. Even if you did, the fact that you haven't done IB at a good shop will put you at a disadvantage in comparison to other candidates. Especially considering that you are from a non-target, your candidacy has no real merits.
Here is some hope though. If you want to do IB, this is certainly very possible. Spend a couple years working in something business/finance, got to an M7 MBA and then recruit as a post-MBA associate in IB. Doing PE after this stint will most likely not be possible, but you will at least be able to work on M&A at an investment bank. Especially considering how crowded the PE space is and how much more saturated it is getting (with too much dry powder chasing too few deals), the IRR's are also coming down so if you are looking to build a long-term future in this career, it will be not be as great a space to get into. I'd advise that you look more into IB in the future if you are interested in IB, but PE even for a candidate that has been at a target, good GPA, and IB experience is an uphill battle for most candidates. With your case, it is not likely.
I knew this would get hit with MS, but I responded anyway because there are some things, even harsh that it helps to hear early on; you do you in the end though
not sure why this got a MS but it is true
Lol it's definitely the non target seniors without IB jobs that are feeling ticked off. I get it, it's not fair, but it's just the way things are
Edit: To the non target seniors who failed to get an IB job, continue throwing as much MS at this as you want, Idgaf
Ok, so I got into target, now what ?
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Op. Make 1000 cold calls and send 1000 cold emails and get back to us.
Make sure to use the assumptive close with the MD "Well that all sounds good I will be showing up tomorrow at 9AM for my unpaid internship. See you tomorrow. Click." Turn off your phone and don't check your email so they can't contact you.
Then the next morning show up with donuts and coffee for everyone and do anything they need done.
OP this might be your only chance.
I actually listened to a podcast with an interview of Patrick Curtis. He was asked what his favorite part of the job is. He said that his favorite part is reading about success stories. He pointed out that there was this veteran who never had a banking, consulting, or even accounting job. After reading up on PE, he really wanted to do it. He wanted it so bad that he taught himself modelling, cold called 1000 recruiters, PE funds, and networked like crazy until one person gave him the opportunity to phone interview. He had been a smart guy, but had a 3.0 gpa, so not amazing. After his tour he studied and networked until that one phone interview with the headhunter convinced the firm to let him come onsite and it worked.
My point is, is that there are ways around the conventional recruiting and hiring methods. I know someone who works at General Atlantic in NYC, got there after being a realtor. The way I see it- do your best to differentiate yourself and learn the skills you need. Grind to get there because there is going to be someone who does, just make it you.