• Sharebar

I'm currently a first year analyst in the FIG group of a BB. Started getting contacted by headhunters in the past few weeks but have not met any of them yet. Not 100% sure whether I want to go into PE or HF after IB, and was wondering on ways to prepare in general over the next few months for buy-side recruiting.

-Any suggested resources / guides to read about the junior roles in PE, HF, and about specific shops?
-How to prepare for meetings with headhunters?
-How to prepare for PE & HF interviews (is it ok to pursue both)?
-How important is networking for buy-side recruiting compared to networking for IBD?
-What to be doing in the office to increase exit opp chances?
-Any specific types of funds to be targeting as a FIG analyst?

I realize these are a lot of questions, and I'm just curious to hear best practices from people who have successfully moved to the buy-side. While I have plenty of time until summer 2012, the recruiting cycle is actually starting fairly soon and I want to be on top of things. Thanks much.

The WSO Advantage - Investment Banking

Financial Modeling Training

IB Templates, M&A, LBO, Valuation + Learn More.

IB Interview Prep Pack

30,000+ sold & REAL questions Learn More.

Resume Help from Actual IB Pros

Land More IB Interviews. Learn More.

Find Your Perfect IB Mentor

Realistic IB Mock Interviews. Learn More.

Comments (11)

  • boutiquebank4life's picture

    Unless your BB is goldman sachs, FIG has screwed you over to only FIG specialized buyside.

  • BankingRUs9's picture

    It is not okay to pursue bold PE & HF options with the same head hunter. Best way to get blacklisted for being indecisive. Head hunters get paid 10-50% of your salary for placing candidates. They want the best, most focused candidates so they can get paid quickly. It is a short season for most of them...a sprint.

  • In reply to boutiquebank4life
    bankbank's picture

    when i read that OP is a 1st yr FIG analyst getting contacted this early, my first instinct was that he works at GS

    boutiquebank4life:
    Unless your BB is goldman sachs, FIG has screwed you over to only FIG specialized buyside.
  • In reply to bankbank
    Banker88's picture

    bankbank:
    when i read that OP is a 1st yr FIG analyst getting contacted this early, my first instinct was that he works at GS

    Unfortunately, I don't.

  • In reply to BankingRUs9
    bankbank's picture

    This is not necessarily true and it doesn't even make intuitive sense in a lot of cases. It's better if you do know exactly what you'd like to do, but it's not "not okay" if you don't. For top candidates (probably for most candidates), the more buyside clients the HH puts you in front of, the more likely you are to receive and accept an offer and the more likely the HH is to collect its fee (i think standard fee for HH when placing a banking analyst into a junior buyside role is 1/3 of 1st year base salary).

    If OP is a mediocre candidate from a mediocre group on the street and is not completely decided, then maybe the HHs get annoyed because it's not as easy to place OP. But, if OP is a fig analyst getting chased this early, I would assume that he is at least in a top group. If you are a top candidate from a top banking group, the HHs will throw you in front of as many clients as they can, PE and HF, because they know you'll likely get and accept offers from someone. This is good for some obvious reasons and bad for other reasons. In my experience, individual recruiters within larger HHs are assigned certain buyside clients and they will try to put you in front of their own clients while the other recruiters within the same firm will try to put you in front of their clients. I had experiences where different recruiters from the same HH would schedule me for conflicting interviews and try to get me to skip interviews scheduled by their coworkers so that they could put me in interviews with different clients.

    All that being said, you probably don't want to tell the HH that you have no idea what you want to do. If you're really not sure, just tell them that you're interested in both and make up some BS justification for it (e.g., "i'm not 100% decided. i really like doing very detailed diligence and analysis so it seems like PE would fit that interest, but I know that there are some hedge funds that also do intense analysis so I think I should meet with some of them, as well." Then the HH will probably send you to some wave theory, tape-watching trading firm and tell you that "they do really intense analysis and I think you'd be a great fit!" kidding. mostly.).

    Also, for purposes of interviewing with the actual buyside firms, it would be to your own benefit to know what you want to do or to at least fake it better than required for the HHs. I get the feeling that this is more important for HFs...I think they want to make sure that you are really interested in being an investor and working and thinking like one. I think PE at a junior level is a lot more similar to banking and is still a lot of cranking and processing work (less than banking, though).

    In my opinion, HF interviews were more difficult than PE interviews. It seemed like most of what I needed to do for PE was demonstrate that I could model and maybe do a case, and then spout off details about the deals I worked on in banking. Maybe they'd ask me some accounting/financial statements/corp finance questions as well. If you're a good banking analyst, this shouldn't be hard. For a FIG analyst, maybe you should brush up on some LBO modeling because I think a lot of generalist PE firms will have a standard LBO case or modeling test (even though they might hire you to work on only FIG deals). Know the details of your transactions (listed on your resume) very well, and have an understanding of why the deals were done. Have an opinion on whether the deal was good or bad. Understand how value is created in a transaction (e.g., in an LBO you create equity value through EBITDA growth, multiple expansion, and/or deleveraging).

    For hedge fund interviews, you need to demonstrate that you are smart and interested in investing. Understand what drives asset value (asset value is the present value of future cash flows...what drives the PV of cash flows). Understand the deals on your resume and also have your own investment ideas (have at least 2 or 3...good if some short, some long). They will probably ask you about your PA. Understand risk and return (hedge funds always talk about risk adjusted returns).

    When I was interviewing, a typical PE question was "walk me through the [blank] transaction from your resume." I didn't do as much hedge fund interviewing, but in my experience, the questions were less "typical" and were more about seeing if you could think like an investor. Someone might ask something like: "if you had to invest all of your personal money and all of your family's money in one company, which company would you choose." Some PE interviewers also asked questions like this, but it was much less frequent.

    My best resource for interview preparation was friends and contacts who had already gone through the process (maybe 2nd year analysts or people that were analysts when I was a summer but had since moved to the buyside). Try to find these people and ask them lots of questions and see if they have any prep materials they used that they will give you.

    BankingRUs9:
    It is not okay to pursue bold PE & HF options with the same head hunter. Best way to get blacklisted for being indecisive. Head hunters get paid 10-50% of your salary for placing candidates. They want the best, most focused candidates so they can get paid quickly. It is a short season for most of them...a sprint.
  • Bernanke23's picture

    Banker88:
    I'm currently a first year analyst in the FIG group of a BB. Started getting contacted by headhunters in the past few weeks but have not met any of them yet. Not 100% sure whether I want to go into PE or HF after IB, and was wondering on ways to prepare in general over the next few months for buy-side recruiting.

    -Any suggested resources / guides to read about the junior roles in PE, HF, and about specific shops?
    -How to prepare for meetings with headhunters?
    -How to prepare for PE & HF interviews (is it ok to pursue both)?
    -How important is networking for buy-side recruiting compared to networking for IBD?
    -What to be doing in the office to increase exit opp chances?
    -Any specific types of funds to be targeting as a FIG analyst?

    I realize these are a lot of questions, and I'm just curious to hear best practices from people who have successfully moved to the buy-side. While I have plenty of time until summer 2012, the recruiting cycle is actually starting fairly soon and I want to be on top of things. Thanks much.

    From my understanding, it is best to have a decent idea of whether you want to do PE or HF as the recruiting processes are a bit different. Also, while you may be pigeonholed with regards to being a FIG guy (I'm one as well), you can still get an excellent buyside job. It's also helpful to know whether or not you want to do a FIG specific shop or generalist as HHs will ask you about this. Keep in mind that the majority of large PE funds (the ones we have all read / heard about) make FIG investments, most notably Carlyle and Warburg Pincus. Some notable FIG specific PE funds are JC Flowers, Lightyear Capital and Stonepoint capital.

  • Bernanke23's picture

    Banker88: do you specialize within FIG? If so, what sub-vertical? I ask because your experience will be slightly different if you're a banks guy vs. insurance vs. fincos / specialty finance

  • Cornelius's picture

    ask the 2nd years and other colleagues / alum in the industry. they are much better sources of info.

    also check out M&I for info regarding interviews, recruiting and headhunters.

    ------------
    I'm making it up as I go along.

  • Banker88's picture

    To unlock this content for free, please login / register below.

    Connecting helps us build a vibrant community. We'll never share your info without your permission. Sign up with email or if you are already a member, login here Bonus: Also get 6 free financial modeling lessons for free ($200+ value) when you register!