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Hey Guys,

I have a n interview at Audax Group this coming Friday and I have no clue on how to prepare for a private equity interview. I was wondering if anyone had any suggestions about Audax Group and what the interviews for them are like. In addition, any tips on the finance interview process in general?

Particularly, why PE?

Background:
Junior at a target school w/ 3.86 concentrating in Finance and Accounting. Had a summer internship last summer at a boutique bank in NYC but did not do valuation/technical stuff.

Thanks a lot guys.

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Comments (14)

  • PartyInTheUSA's picture

    curious as well (^hence the bump), but would also like to hear about what people do after working at a place like this

  • CompBanker's picture

    I interviewed with Audax more than a year ago, and it was as an experienced hire, not out of undergrad, but I'll give you the advice I have:

    1 - Audax is a sweatshop, be prepared for this. They will work you into the ground for many, many years before your hours get reasonable, if ever. The tradeoff is that Audax does a shit ton of deals. They are big into the "buy and build" strategy. Essentially, they do a heck of a lot of smaller add-ons to their portfolio companies and grow through synergies. They pay very high multiples for their platform acquisitions, so this is one of the ways that they "average down" the multiple.

    2 - They generally staff their analysts on deals in teams of two. Basically, 1 analyst is the financial guy and the other is the "market" guy. So one does the modeling and the other does the research. As a result, you're expected to know more than just models and technicals.

    3 - Per #2 above, their interviews focus heavily on understanding of business. Expect questions such as: "I have a company that does xyz, what keeps me up at night?" Also, expect a lot of consulting, case type questions. They primarily hire consultants so they are looking for people who can think and strategize rather than just model monkeys.

    4 - The first thing people do after Audax is sleep. As for exit ops, they generally consist of other PE shops or business school. Given the experience you gain, you're very marketable to MM PE shops like Audax. They have a reputation for being very bright individuals, despite over paying for companies. Also, they have a culture of promoting from within, so it is not unreasonable to have someone stick it out and move all the way to the top (See: Joel Russ, who just recently became a MD).

    As an undergrad looking for an SA, I can't really promise you anything other than that your experience will not be exactly the same as mine. I participated in multiple phone interviews and multiple superdays, you may encounter less. Either way, goodluck.

    CompBanker

  • In reply to CompBanker
    Chenjamin's picture

    Hey, I am curious how I should go about prepping for the case solving aspect of this interview given that I have only one day left? Thanks a lot. Any suggestion would be greatly appreciated.

  • CompBanker's picture

    The idea of the case solving aspect is that you aren't supposed to be able to "reherse" the answers, it is a test of your ability to think on your feet and your knowledge of business. If your interview is in just 1 day, I wouldn't worry about it. A good night sleep is far more important.

    CompBanker

  • Cypher's picture

    I interviewed with them last year for their SA program. The interview is 20% behavioral and 80% case. Don't expect a full-blown consulting case interview question. However, since most of their experienced hires are from the consulting ranks (as CompBanker pointed out), don't expect your typical finance interview either. They will give you a case and analyze your thought process as you reason your way through the case. Their cases are more finance-oriented than strategy-oriented, so be ready to talk intelligently about revenue, costs, margins, and other income statement items. That said, being aware of high-level strategic concerns will get you bonus points. They want to see that you understand a business and know the drivers of a business/industry. As for preparation, as long as you have your finance down and can speak intelligently about a business, you should be good to go. No need to pull out a case interview guide with one night to go. Good luck.

  • Kanon's picture

    Anyone know if Audax is hiring for FT analyst positions right now? Either out of undergrad or people with 1-3 yr experience?

  • DrJeffreyWigand's picture

    Audax I believe hires for FT industry-hire analysts throughout the year. I have a friend who moved from NYC into Audax out of industry and hear all sorts of complaints from this person and the folks this person has worked with. Mostly the comments about lifestyle are true, though not so much as historically as deal flow is not as strong as 2007/2008. The issues I take are the following -- and recalling from memory here so may not be complete, lots to remember here lol:

    1) Experience: Audax has close to 20-30 analysts (used to be able to track but they have been removed from the website for some reason -- they used to be on there). Given the lack of deal activity, this has diluted the experience/quality of work for many people and a good portion of the work is process driven, such as reporting (these guys do weekly reporting on 20-30 portfolio companies!). When teams looking at deals have multiple people on them, including multiple analysts, there tends to be work generation that doesn't help anything. Staffing model also calls for people to be staffed on multiple things, which can wreak havoc on work-life and is unpredictable as everyone can demand everything at once -- also allows for some analysts to fly under the radar and avoid work by playing one workstream off the other. That being said, these guys get the top experience...especially out of undergrad...that anyone can find in PE this early. Lots of exposure to all parts of the deal process as much work that is normally outsourced is done internally. I'm sure this hits a plateau at some point.

    2) Layers of analysts / associates: given the number of analysts and associates (set up like law school where you have 1L, 2L, 3L analysts and then associates who are associates for another 2-3 years), everyone is trying to manage and delegate work to the tranche of people below them. In many cases, you have junior associates/senior analysts who are trying to prove their worth and makes for work generation, unnecessary stress, and low morale. Many of these people who were good analysts apparently turn out to be bad managers/low social awareness people. It also leaves with the new batch of analysts getting bombarded with the process heavy work -- and of course it's hard to push back at that point in the game.

    3) Comp: the story I heard here is that recent people got sold on high comp from the 2007-2008 era when coming into the firm in recent years. People got a ton of $$ then and comp was higher than anywhere else as I take it. These were the numbers people were promised (even during the recession) and then came to find out at bonus time that this was not the case. Bonuses were very low in 2009 (maybe half of base -- $70K base I think) for top analysts. 2010 was only marginally better, even though analysts were sold on 1-2 times base even during the interview processes in 2008-2010. For this reason and with the experience issue, many of the top analysts have left for bulge bracket PE shops or just go to b-school.

    Audax seems to have created a 2 year PE analyst program as pay is below market and experience plateaus after a couple of years so the end game is PE shop that offers more experience/pay/better lifestyle or b-school. The experience gives these guys strong entry opportunities into larger PE shops or other MM PEs with better pay as these guys can easily pick off these analysts/associates who are getting no carry and bonuses which are not that compelling. Question is do you do another 2 year program at GS or another big bank (which will pay a lot better) or consulting (and get marginally less pay) with more time to enjoy life instead of Audax when you can end up in the same place with all three options.

    Intern process is also pretty cut throat as only half make it to full-time offers.

  • Kanon's picture

    DrJeffreyWigand:
    Audax I believe hires for FT industry-hire analysts throughout the year. I have a friend who moved from NYC into Audax out of industry and hear all sorts of complaints from this person and the folks this person has worked with. Mostly the comments about lifestyle are true, though not so much as historically as deal flow is not as strong as 2007/2008. The issues I take are the following -- and recalling from memory here so may not be complete, lots to remember here lol:

    1) Experience: Audax has close to 20-30 analysts (used to be able to track but they have been removed from the website for some reason -- they used to be on there). Given the lack of deal activity, this has diluted the experience/quality of work for many people and a good portion of the work is process driven, such as reporting (these guys do weekly reporting on 20-30 portfolio companies!). When teams looking at deals have multiple people on them, including multiple analysts, there tends to be work generation that doesn't help anything. Staffing model also calls for people to be staffed on multiple things, which can wreak havoc on work-life and is unpredictable as everyone can demand everything at once -- also allows for some analysts to fly under the radar and avoid work by playing one workstream off the other. That being said, these guys get the top experience...especially out of undergrad...that anyone can find in PE this early. Lots of exposure to all parts of the deal process as much work that is normally outsourced is done internally. I'm sure this hits a plateau at some point.

    2) Layers of analysts / associates: given the number of analysts and associates (set up like law school where you have 1L, 2L, 3L analysts and then associates who are associates for another 2-3 years), everyone is trying to manage and delegate work to the tranche of people below them. In many cases, you have junior associates/senior analysts who are trying to prove their worth and makes for work generation, unnecessary stress, and low morale. Many of these people who were good analysts apparently turn out to be bad managers/low social awareness people. It also leaves with the new batch of analysts getting bombarded with the process heavy work -- and of course it's hard to push back at that point in the game.

    3) Comp: the story I heard here is that recent people got sold on high comp from the 2007-2008 era when coming into the firm in recent years. People got a ton of $$ then and comp was higher than anywhere else as I take it. These were the numbers people were promised (even during the recession) and then came to find out at bonus time that this was not the case. Bonuses were very low in 2009 (maybe half of base -- $70K base I think) for top analysts. 2010 was only marginally better, even though analysts were sold on 1-2 times base even during the interview processes in 2008-2010. For this reason and with the experience issue, many of the top analysts have left for bulge bracket PE shops or just go to b-school.

    Audax seems to have created a 2 year PE analyst program as pay is below market and experience plateaus after a couple of years so the end game is PE shop that offers more experience/pay/better lifestyle or b-school. The experience gives these guys strong entry opportunities into larger PE shops or other MM PEs with better pay as these guys can easily pick off these analysts/associates who are getting no carry and bonuses which are not that compelling. Question is do you do another 2 year program at GS or another big bank (which will pay a lot better) or consulting (and get marginally less pay) with more time to enjoy life instead of Audax when you can end up in the same place with all three options.

    Intern process is also pretty cut throat as only half make it to full-time offers.

    ^ DrJeffery - Great post! SB for you. I have a contact there, and on occasion I catch up with him. He thinks they're not (currently) hiring at the time I spoke with him, but he may not be in tune w/ recruiting and seemed like he was super busy (as it seems to be the case throughout the firm).

    Do you (or any other WSOers) have any knowledge about their Mezzanine group? They still show their entire team (including analysts/associates) and it doesn't seem to be a large junior level army like with their PE practice.

  • DrJeffreyWigand's picture

    Kanon -- I am not familiar with the mezz operation.

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