PE interview at VP / Principal level
Hi everyone,
Long story short: I’m a young Director in a global M&A boutique and I’m seriously considering transitioning to PE.
I know the move is somehow atypical at this level of seniority but it seems to happen sometimes and I have several interviews lined up with a few MM and one MF. I’m more interested in MM but given the situation, want to have as many interviews as possible.
I spent quite some time online looking for interview advice for this kind of position (esp. when coming from non PE world) but couldn’t find any: there are a lot of posts on analysts / associates recruitment but not for more senior level. I guess that being able to do an LBO model or talk in details about a deal I worked on won’t probably be the key area of focus during the interviews.
So if anyone made a similar move / interviewed candidates with similar profiles and have feedback to share, it would be extremely useful.
Side question a lot more specific and less important: friend of mine in PE tells me that a question he loves to ask (future ex) bankers is “tell me about a sell-side you ran where you would have done something differently with the target vs what management proposed (in the CIM, MP, etc.) and tell me what your strategy would have been”. How would you approach such a question?
Thanks a lot
I would think they'd probe your ability to think like an investor. That should be your number one goal - to convince the interviewer that you're an analytical investor type trapped in a banker's body. I'd definitely expect deal walkthroughs to be fair game. Also pitching an investment. That question at the end from your friend sounds like exactly what I'd expect.
I agree with the above comment.
They say that bankers get paid for any deal, whereas investors get paid only for a good deal. Therefore, it does make sense to know cold what you believe represents a good investment.
In terms of other areas, I would personally ask:
Good luck!
Do you really see proprietary deal flow above the LMM level? I would think at that transaction value there is usually going to be some intermediary. Having a relationship with the company, bankers, etc might help if valuation / bids are the same and they need a reason to select 1 fund vs another, but is it that big of a differentiator?
Yes - at megafunds, prop deals still happen, more often than you’d think. That said, the proprietary angle is just one of many things required for a deal to happen - more important is the ability to take a differentiated view. This is derived from many factors - industry knowledge, access to senior operators who can be relied on to drive values, synergies w portcos etc.
Relationship with bankers is the least important factor of all to be honest.
Proprietary deals are relevant at all check sizes… the BX Emerson deal was a result of years of relationship building.
I would agree with Tamara generally speaking - you are probably not expected to know the technical stuff inside out as analysts / associates would be though I think you should still come prepared nonetheless it's possible you will be interviewed by people up and down the rank (maybe not associates / analysts, but VPs upward) and some people could throw in a curve ball - not a modeling test, but perhaps a case. Not a huge focus for Principals (a bit more so for VPs) but you should give it some thought nonetheless.
The technical stuff people you'd want to see from you is understanding of docs (which you should know pretty well,) transaction process from a PE perspective and your experience in leading deal teams (PE setup is not very different from IBD's.) - this is equally important for VP and Principal roles.
Then on top of it is how you think about deals from an investment perspective, not just as a banker - when you look at a deal, what are the key thesis / risks, how would you look into them when you are in DD etc.) Maybe something from your past deals, maybe some idea that you have - I'd say this is fair game for everybody interviewing you and equally important for VP & Principals.
Finally - industry knowledge if you have any, relationships w/ senior management, owners, how do you go about sourcing, how do you build your edge / angle (similar to winning a mandate in banking, on the buy side, esp. in a process firms need to find an angles - in order to feel comfortable paying the extra turn of EBITDA that would get you the deal yet still allow to you reasonably think you can make your returns.) This is much more important for Principals than VPs.
I think the point about firm culture etc. is legitimate but very hard to pin down, both for you and the firm so it will be tested through multiple interactions, but I'd argue people don't expect you to come in knowing what they're like, how they operate. And unlike at the junior level where it is pretty much a one-way street, there is more mutual selling here where the firm would need to convince you as you need to convince them of a fit.
Thanks all - this is **extremely **useful!
A few questions / follow-ups below:
1/ Any resource you would recommend reading in terms of general advice, PE interviews deals case studies, etc. ?
2/ I'm probably over simplifying but to me key edge re differentiated proprietary deal flow mainly comes from industry knowledge and relationships / network. Any view on other important skills or ressources in that context?
3/ @ tamara_s: I get the point on investment thesis but not sure to follow the ones on investment themes. What do you mean by that? Ideas for sectors (or sub-segments of given sectors) as a whole?
4/ @ chaser: what do you mean by "maybe some ideas that you have"? Do you mean pitching a company out there, not (currently) for sale and on which I haven't worked on the buy or sell-side?
Thanks again
Sorry for the late response. I hope this is still useful to you.
Perhaps if you've worked with sponsors before, you could also look at past deals, both those that generated lots of interest and those that failed and considered them from those perspectives.
I'd think at the mid / upper level, interviews would be less theoretical, more real-life, including the cases.
I'd say broadly speaking that's it. But as you probably know when you get into each aspect, there are a lot of nuances. Also I think it's worth pointing out that while highly valued, (good) proprietary deals are realitiscally very difficult to come by and people know that (good in terms of fit with funds & valuation etc.) Inevitably, especially at larger firms, you will participate in highly competitive auctions and the relationship / industry knowledge / operational expertise etc. are important because more often than not you need some or all of it to build enough conviction and bid to win.
Yes - sort of like a pitch, something you can use to discuss during interviews, because naturally interviews would evolve around your experiences, transactions, ideas. I suppose an actionable idea is difficult to have... since, assuming you have it, perhaps it's your duty to bring it to your current employer first, which then makes sharing it difficult. More realistically, it would be something you worked on in the past (kind of related to 1)
Makes a lot of sense - thank you chaser
is this for the VP level? I have some resources I can share if yes
Also interested.
Yes it's for VP level (or Principal) How can I get in touch to get the resources you mention? Thanks a lot!
interested as well - if you are able to share? thanks a lot
I would love the resources if you're still willing to share
Very interested as well if they’re still available. Thanks a lot
Would also be interested if still available
Also very interested if you're willing to share. Thank you!
Also interested if available
Is this something you could still share with me as well?
Appreciate if you could share the materials if possible!
Way late to the party, but would be grateful if you had materials to share. I've got some case studies (apax, centerbridge, LGP, TPG, welsh carson) if you want to swap materials.
interested as well, could you plse share
Would love to check out the materials. new vP looking for technical practice.
what about your knowledge of credit agreement / legal docs, etc? what is your experience and skillset there?
Very good point I think I'm pretty ok with equity-like agreement (SPAs, SHAs, etc.) - having been relatively actilvey involved in a number of negotations. But I guess it's always pretty different to sit as the investor vs the advisor, esp. financial advisor here On the other hand, I'm quite ignorant of credit doc - everything post term sheet has never really been a focus of mine
So if there's any recommendation / resource someone could suggest to help me (and potentially others) structure thoughts and learn a thing or two that would be extremely useful: key clauses to watch out for, standard / buyer / sell-friebdly terms, evolution of market practice over last few years, etc.
Hi OP, I'm NOT (disclaimer) at your level but have frequently heard MDs / Partners comments on hiring profiles like yourself. Everyone above in this thread already raised the main "boxes" for what they look out for, but what I would add is the "senior executive presence" might have been overlooked.
It is really underestimated how much these MDs care about "senior presence" and "gravitas" because in your role, you would be managing investments at the board level and manage people who are in fact more senior than you (e.g. 50+ Year old CEO).
Management is often skeptical about "young PE talent" (to them
Thanks Then question becomes (esp. for MM) how to push for the fit by being nice / sort of fun etc while showing gravitas .. Tough balance to find
out of interest, how did you manage to secure these interviews? Networking or HHs?
Sorry for the delay - one from HH and rest from networking. Although the HH is a good friend of mine so not entirely sure how to properly account for it
Ipsa doloremque inventore omnis et modi nihil est. Sunt aut asperiores quia ea eos.
Sed labore dolores quibusdam ipsam ex quos quia velit. Nobis laboriosam et vel doloribus nisi vel.
Et eaque aut debitis adipisci distinctio consequatur. Quod laborum ab reprehenderit. Esse porro quos est natus ut et neque. Ullam nemo necessitatibus dicta magni. Qui repudiandae ipsum dignissimos totam. Blanditiis omnis natus nostrum at. Pariatur veritatis unde voluptatem officiis quisquam in laboriosam tenetur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Omnis aliquid vero aut laboriosam corporis dolores laborum illo. Maxime officiis repudiandae pariatur sint quam nihil. Nihil consequatur sunt nihil a id. Nam perspiciatis ipsam pariatur. Et est nihil ut harum aspernatur voluptas dolorem. Omnis perspiciatis maiores ad soluta qui. Nulla ab quaerat sunt dolor cum quia illo.