PE Internship - Open for Questions
Fellow monkeys, I began interning at a reputable middle market buyout firm and am having a great time so far.
I am open for any questions about the internship :)
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What kind of job do you do on a daily basis and what kind of skills are required for doing it?
Yeah, so for every CIM that is given to us by bankers conducting full auctions, someone at the firm writes a memo detailing various investment highlights. I wrote one of those on my first day on a healthcare software company. For that you need to have a basic understanding of business (what makes the following important: supplier concentration, payor concentration, organic growth prospects, competitive landscape, conditions at time of sale, etc, etc?) and a basic understanding of accounting (why is it important that this is a low capex biz?).
Now, I'm in the process of sourcing a small bolt-on acquisition with an associate at the firm. The portfolio company needs to find a company to buy that has a certain license. I made a list of a few hundred companies. I am now calling those companies and am speaking with their owners about potentially buying them. If they're interested, I begin asking them questions about their business (how much revenue? what % of your revenue comes from x, y, and z? how profitable have you been in the past?). This requires that you are a charming guy who can sound smart over the phone.
An associate told me that I simply haven't been given the really analytical stuff yet.
How did you land the internship?
How much was your experience a part of you obtaining the internship (i.e. did you come from an IB job working in a certain industry)?
LloydBankfein, during my senior year in HS, I called one of the analysts there to learn about what a career in PE/banking was like. A year and a half later (this summer) when that analyst had left for business school, I cold-called the firm. The HR person, who didn't know who I was, returned my voicemail message asking me if I'd like to come visit them. So I came in one day to "visit" (having brushed up on some basic finance and on the steps of a few valuation methodologies like DCF analysis and trading comps). After she brought me into a conference room to talk, she asked me to run her through my resume. I tried to present it in the best way possible and highlighted the fact that I started the first finance club at the previous college I attended and highlighted some of my personal finance studies and work I had done. A week later, I followed up, and she told me she still had to speak w/ some senior team members. I called her a bit later to follow up again. She said she needed a while longer. I called her again and she asked me if I wanted the position for the fall.
In conclusion, I think she really like my down-to-earth and charming personality (I really think that had something to do with me getting the position) and that I sounded smart when I spoke to my prior finance-related studies.
onepercent, I had no prior formal experience. My previous jobs were at a golf course and a cafe. I think they respected the fact that I worked 70hrs/week that summer and that I had physical evidence of my finance-related studies (reports on companies earnings detailing sections from 10-Qs and other SEC filings, etc).
You're telling me you sat this HR broad down and ran her through your golf course and cafe experience?
What's the AUM of the fund, how many FO people work there? Is it a generalist fund or industry specific?
You got an internship at a MM PE fund by only meeting with HR once? Interesting. Is there something more to the story? Do you have a family/friend connection? Why did you specifically target this MM PE fund when you were only a senior in HS?
On a scale of 1 - 10 how charming would you say you are?
this
haha
Seems like a dealflow position.. get used to making a bunch of cold calls to source deals.
Hey Tony, get a load of this
how do you pull comps?
About 2/3 of the roughly 30 employees there are front office people.
It's a generalist fund.
I'm a sophomore and am still learning. I don't know how to skillfully perform trading comps, but I'll be valuing a potential bolt-on tomorrow on the basis of EBITDA multiples. I'm assuming they'll have me find my multiples range based on public comparables, which I'll find by taking the average of a number of similar companies' MarketCap/EBITDA.
MarketCap/EBITDA is irrelevant!
You want EV/EBITDA as EV is capital structure independent between comparables!
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