For those in banking currently participating in PE recruiting or those that have already traveled down this road... what is/was your preparation methodology or private equity guides? Obviously you need to address fit, technicals and deal experience.
Im mainly talking about deal experience here, how did you guys prepare? I personally don't remember anything from any of my past deals.
Those that have already been through the process, what are the key things you need to have a firm grasp of while going about the process parsimoniously?
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Honestly, I think the most important thing about discussing deal history is being able to discuss investment strategy, why it was a good investment, and risks. I haven't had a single interview that asked me financial questions about the client or transaction. That may not be the case for megafunds, but I've interviewed with a few top middle market funds and it is primarily about fit, deal experience (again, understanding the merits of the transaction), and industry-specific knowledge (making sure you have an opinion that you can back up). I think the best way to prep is scan the CIM/management deck quickly, specifically the investment highlight/risk sections. If you can't speak intelligently about the deal from there.... you probably shouldn't speak about it.
And I think it's important to prep answers for "Why PE?" or "Why this firm?" but I honestly don't buy a whole ton of prep for buyside interviews. Unless you're shooting for KKR or TPG, a lot is going to be about fit, and fit isn't something you prep for.
KKR and TPG care just as much about fit as anybody else on the street. why shouldn't they virtually have their choice of the candidate pool?
For reviewing my deal experience, I literally wrote out all the major details on each deal a couple of times and reviewed them from time to time. When I say all the major details, I mean the major financial stats, investment considerations, trouble areas of the company and how to mitigate them, buyer concerns, and how the process went and ended up overall. Really just a matter of writing things out and being able to speak to each deal intelligently. Took a shit ton of time but helped me in interviews immensely. Was especially helpful because it stopped me from sounding like an "umm, like" stuttering idiot, hahaha.
Thats what I did. Problem is, each deal consisted of like 10 pages of notes... which translates to an entire notepad filled with notes. It generally took me 5-7 hours to write out high-level and detail info on each deal the first time around. Across 5-10 deals, that gets pretty substantial.
I have an interview with a PE firm and have no Banking/Consulting experience. Its a firm that hires undergrads. I have no idea what to expect.
That's pretty hardcore, must be some complicated as shit deals. What you could probably do is just pick out like 3 of the most relevant deals and focus in on those, while having a high level understanding of the others. Generally when i went through interviews, I'd get to pick and choose which deals I would talk about and could usually tailor the discussion based upon the deal I chose. Plus if you know the fund you are talking to has a specialty in a certain industry, you can focus on the appropriate deal.
With that said, I don't know how different it gets in the $1B+ fund range. The biggest fund I ever interviewed with was about $1 billion in size and most of the ones I met with were around $300 - $700M in size.
This was my structure for talking about an M&A buyside deal that I had at the top of my resume:
This was all around a 5 minute answer that I gave in response to a question about this specific deal. I found that when I laid out this answer showing a good mix of both numbers and qualitative understanding, I got very few "trick" follow-up questions. They were confident that I knew what I was talking about.
To prep for this, I actually found it helpful to skim through the CIM that we had for the target as well as the Board presentation that we had put together (you're the analyst - you pulled all-nighters for these materials way back when right? Use them!)
And could you expand on "very few trick follow ups"? It seems like you're comparing this to something else... what have been some of the types of trick follow up questions you've seen in the past?
In my opinion, they're looking to see that you can speak to both the numbers and the qualitative aspects of the deal...and can grill you on one or the other if they sense you might be trying to steer the deal convo one way because you're not comfortable. For example, in some of my earlier interviews (before I brushed up on all of this), if I talked about a deal just qualitatively and didn't throw out numbers, then they would definitely ask about sales, EBITDA, possibly market cap and firm value for your client. One guy asked me to walk through all of the sources and uses (tranches, leverage, pricing, etc).
Conversely, I once ended up talking about this complicated joint venture structure that we analyzed - and I focused too much on the numbers and ended up getting grilled on the rationale for 10 minutes - pros and cons of this structure vs. an IPO vs. outright sale, etc. For the deal I mentioned above, for example, I say "our client wanted to leverage the target's technology" for one of the transactional rationales, but I studied up to make sure I was comfortable taking it one step further if they actually asked what the technology was (wikipedia very helpful here). Even if the interviewer has no idea about this space, he can still discern whether you know what you're talking about (or bullshitting very confidently) vs. just making shit up on the spot.
In my case, for this particular deal, I got very few follow-up questions period. Done deal. They wanted to know about the deal - I gave them 5-7 solid minutes on the numbers and the rationale. Preempted any questions in a way. Move on.
marcus - aren't you an associate in banking now? how receptive are PE funds to your candidacy and what kind of funds are you targeting?
regarding interview prep - different things work for different people - when i went through the PE process from an industry coverage background, focus was on thoughts regarding the industry, where players were segregated, along with everything stated earlier
when i went through it as a restructuring banker - i focused more on how the deals were structured (all of my deals were busted LBOs), how they fell apart and what the new structure looked like
i think the key for you is to really have 2-3 deals on ur resume to talk about. more deals lead to more headaches during interview prep and during the interviews themselves.
if you've had multiple jobs, just keep it to one deal per past job unless you worked on TXU, HCA and Kinder Morgan during ur time at GS/MS/JPM/Citi
Boutique private equity interview (Originally Posted: 08/04/2010)
I've got an interview coming up with a regional boutique firm (dozen bankers) that does private equity, M&A, and advisory. It's early in the game but it would be for full time employment starting next summer.
Obviously they aren't competing with KKR, TPG, Blackstone, etc. for deals, but they are one of the strongest in their market. Furthermore, they have pretty strong backgrounds - lots of HBS, Wharton, and Darden (they're located in the south).
Should I expect the typical private equity questions or something a little different? Althoug their deals aren't high profile and might be perceived as "unsophisticated," I don't see why their fundamental tools would be any different.
TIA.
Shouldn't your username just be "Yuppie"? I feel like the term never stopped being used, in which case it would reference more than just the 80s.
Sorry if you thought this post would be advice, I'll read your actual post after I send this.
Haha, yeah I get where you're coming from. I'm probably no more "yuppie" than most people on here, but some of my less ambitious friends use it from time to time to describe me and other peers who are chasing after filthy lucre. The name actually came from the Curren$y song "Modern Day Hippie" (an underground rapper), and I use it a lot of places.
One of the mainstream men's mags (GQ or Details) did a story a few years back about how "we're all yuppies now."
Congrats. I would say just prepare for the worse interview ever. Not to say it will be, but you should go into it thinking that you will be drilled and asked tough questions and prepare for that so you will be able to handle whatever they throw at you.
Stereotypically smaller/boutique/regional firms aren't as harsh in the interview process and they tend to focus more on fit, but as you said, the fundamental tools should be the same, thus, so should your the level of preparation be for the interview. Who knows, maybe they intend to lean on you rather heavy when you first step through the door so they might put you through the ringer during the interview to see what your capacity is. The bad thing (or good thing depending on your point of view) about smaller shops is they can't have any dead weight, where as larger places have other analyst to pick up any slack. Good luck. Let me know if this is in ATL and we can grab a drink. Good luck.
Regards
Thanks.
The interview is in Atlanta; I sent you a message.
private equity interview Prep Question (Originally Posted: 12/18/2015)
I'm a senior at a Target School for IB currently trying to break into the buy-side straight out of undergrad. I have a superday coming up with a middle market PE Firm for an entry level investment/ pe analyst position. I know that for most entry level PE interviews there is a case study; however, most of these interviews are for post-IB associate roles. Moreover, the firm has said nothing that would indicate I should expect a case study (i.e. email says I'll be speaking with a bunch of the senior partners in order to determine my fit at the firm as well as qualifications).
All that being said/TLDR version: Should I be prepared for a case study?
Case studies are common, especially if it's at a more consultant heavy firm like Audax. They're tough to prepare for, so just look at some examples, and be prepared to use everything you know about finance and business to help you reason your way through it.
Hey OP, can you PM me?
private equity interview help! (Originally Posted: 06/04/2015)
Hey so I have an interview coming up in a couple weeks at a new Private Equity fund in CT for a spot as their junior analyst. I won't lie, went to a pretty mediocre school (Class of 2015), even though I have two good internships under my belt, and got the interview through a friend. The fund is small ($120mill) and I would be interviewing in front of their partners (5), all of which have very impressive credentials. I was just wondering if anyone has any advice, anything that could be helpful really. I graduated as an Economics major so I never really got the "real finance" classes so I feel like I'm at a disadvantage with regards to the other kids. Thanks!
from your post, sounds like you have a nerve issue rather than knowledge issue. if they are interviewing you, there's a good chance they know your background.
the most important item is to keep your cool. admit what you don't know, but think about it, and try and walk them through your thinking. in other words, don't just say "i don't know."
I would focus on 'getting' the concepts and basics of LBO's and the relationship with GPs and LPs. Personally, I think you should know the financial statements cold, whether now or soon after. It's not that hard, repetition does it. Be cool, they don't expect any college kid to know all the tricks of the trade, but understand the industry concepts, be rock solid with Excel, be smart, industrious and likeable.
Good luck from a fellow Econ major
Help! private equity interview in three days! Interview adivce? (Originally Posted: 05/12/2012)
I am an undergrad and after some cold calling and networking have been invited for an interview with a middle market P.E. firm for a summer position. I finally got back home and some time to let of steam after finals and basically hell week(s). I am trying to prepare but this I feel like this will be substantially different from my earlier equity research and investment management interviews.
I have been trying to prepare but am still not sure if I fully understand how to do an LBO properly, I think I got a DCF down. Also, I had a college class which had me do myriads of case analysis but not sure if I could handle something like that or prepare in the short term.
First try to understand how an LBO is structured at a high level: http://www.ibankingfaq.com/interviewing-technical-questions/leveraged-b…
Given the time you have, your best friend is this website as far as the modeling is concerned. Try going through the LBO tutorial: http://macabacus.com/lbo-model/introduction
Take a step back however - I would highly recommend getting the qualitative info down first - why private equity? what makes you a good fit for the firm? Are there any particular sectors you're looking at which overlap with the firm's investment mandate?
If you have these down, they'll be less concerned with you knowing how to build a full-blown lbo model (takes more than a day to get it down) and will care more about why you vs 20 million other candidates. You sound like a undergraduate so they're not going to penalize you for not knowing the exact mechanics of an LBO. All the best
1st round - private equity interview (Originally Posted: 11/11/2007)
I am a junior looking for a summer internship - have a 1st round coming up with a PE shop in Chicago - what can I expect in the interview? - technical, behavioral, both, etc...
Also, does anyone have any info on CC Industries in Chicago? - I know the basics (Hoovers) but would like to get my hands on some more information.
Thanks
I don't really know, but there's a thread for PE-related posts.
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