Boutique PE firms
I am currently in a mid-market city working in Big 4 TS. I am in the interview process with a small PE firm in the same city.
Is there something as too small of a PE firm? I have never heard of the name before but all of the resumes of the team members are very impressive.
Also, I know every firm is different but does anyone have any insight on the work/life balance at this type of a firm?
TIA.
To answer your first question, as long as there are small companies, there's room for small PE firms. There are a large number of MM and lower MM PE firms, so it goes without saying that there are plenty of good shops that people have never heard of.
Work/Life balance all depends on the dealflow. You're not at the beck and call of clients like you are in IB, so the hours are generally less volatile, but they may not necessarily be better. If there are a lot of good deals that are coming in through origination/sourcing efforts, then expect banking-esque hours.
I'd recommend asking candidly during the interview about what it's like to work there, and you should try to reach out to some of the junior guys. They can provide you tons of insight.
Are there any good ways to see if it is a reputable place to work? Also, I have a few interview etiquette questions:
1) Is it appropriate to ask associates with the firm what their work environment (work/life balance) is like? How do you do this without sounding like you don't want to work a lot ?
2) To prepare for the financial modeling aspect of the interviews, should I take the WSP course or can I simply find youtube videos, etc. to sufficiently prepare myself?
TIA.
mtnmmnn hit it right on the mark. Use the angle that you're just trying to learn more about the culture, which is more important than the hours. I'd rather work 100 hr weeks with people I like than 80 hrs with people I can't stand.
I've heard good things about WSP and BIWS modeling courses. If you have the cash to spend on the program, I think it'd be a good investment.
Yes there is such a thing as too small of a PE firm. It's a PE firm that is too small to afford your salary.
1) Of course, just ask along the line of what's a typical day / week like or something like this (everyone knows what this means). It's definitely a very important part of your due diligence and it would reflect poorly on you if you didn't ask.
2) it depends on how comfortable you are building an lbo model from scratch. Case study / modelling test are usually pretty simple, but need to be done under a very tight deadline (unless it's a take home) so you should be able to build a model and short deck summarizing your investment decision in ~3 hours
I'm at a fund with with
Painting with the broadest brush strokes possible, firms like that tend to have an easy work-life balance, low employee turnover, and can present an interesting and lucrative opportunity for career progression.
Given the data that shows how compelling returns in top quartile and median MM buyout funds are relative to other asset classes, LPs love getting into a fund that consistently posts healthy numbers. You'll often see that in mid-market cities where 'differentiated dealflow' isn't a lie: the partners know the market really well, have great relationships, and have built a network and reputation that serves them well.
It's a different route than BB IBD > MF PE > HSW MBA > ?? > (greatness) ... but if someone's willing to pay you banking-esque dollars in a low COL city for a junior role that will take ~60 hours weekly (leaving you time to enjoy family, friendships, romance, fitness, and hobbies) and offer the opportunity to progress upwards over time and tilt the compensation formula more towards carry than salary, sign on the dotted line and don't look back.
To see whether this firm you're interviewing with is like that, ask real questions. When doing this, don't be arrogant, embarrassed, or insincere. Present yourself as earnest, hardworking, and humble. With that attitude, it's entirely appropriate (and shows them you're thinking the right things) to ask: - whether investment professionals tend to leave or progress internally - if they leave, what for (b-school, another fund, industry change) - where they are in the lifecycle of the current fund (percentage of cash deployed) - whether they prefer employees to get an MBA to advance internally - what the responsibilities of the role you're interviewing for are - how those responsibilities might grow over time and how your progress would be judged
You should also look at the caliber of the senior professionals' backgrounds (sounds like you already have). See if you can find former but not current employees on LinkedIn and judge whether their next step was an improvement or not. See if you can find if people progressed internally, and if so, how quickly.
For example, someone who just has "Investment Professional" as their title with a timing of "2007-Present" isn't helpful. Seeing someone with "Analyst, 2004-2008; Associate, 2008-2014; Vice President, 2014-Present" might not be as promising as "Analyst, 2008-2010; Associate, 2010-2013; Vice President; 2013-Present."
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