Private Equity Recruiting Q&A
Have been getting more than a few inbound PE recruiting questions VIA PM, happy to field them here for everyone's benefit. The recruiting process has really shaken up this year and is a pretty significant source of anxiety given how opaque and unexpected it is.... So figured this may be a better forum than PM so everyone can benefit from it.
For those of you hyper-competitive monkeys out there's that have firm-specific question and don't want to divulge info, you can still PM me and I'll try my best to answer it when I can.
Let's try to limit questions to those pertaining to the new recruiting process... I.e. MM recruiting now, megafunds doing "fireside chats" in an attempt to keep the best candidates on ice until they kick off their recruiting much later.... most of the other questions can be answered somewhere else on this forum or the internet..






Were the technical questions
Were the technical questions much more difficult than BB / Elite Boutique technical questions?
How did you prep for the case-study?
How quickly can you model a returns analysis with 3-statements etc.?
Technicals for banking are to
Technicals for banking are to ensure you're well prepared. Technicals for PE are to ensure you've mastered financial analysis for a banking analys / new PE associate.
Didn't prepare for case study, did it everyday at work anyway, so was second nature. Also spent some time at a boutique where I was modeling from a blank spread sheet on every deal, so that experience helped.
Depends know complex the company is. But with very simplified, probably 20 minutes. Of the cases I've done, I spent a weekend on one, 4 hours on another, and most of the others were on site, typically 3 hours. Had one that was 30 minutes on site, blank excel and a 10K.
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
I know HF's have strict
I know HF's have strict marketing laws and cold calling clients is forbidden. Is it legal to cold call clients at a PE firm? Also, how do the costs of starting a PE firm differ from the costs of starting a HF and what kind of seed capital do I need to realistically start a PE firm?
Thanks
You have your way. I have my way. As for the right way, the correct way, and the only way, it does not exist. - Friedrich Nietzsche
what do you mean it have
what do you mean it have shaken up this year
can you explain how it differed from previous years for naive on this website
ty
You mad that you're gonna
You mad that you're gonna find it difficult to find a PE gig given you're a 2nd/3rd year Associate?
Marcus, because I've seen a
Marcus, because I've seen a lot of your posts, I assume you're not a second year analyst. How was the process different for you given that you've got a bit more experience?
how do you recommend
how do you recommend consultants with less deal experience present themselves?
What are the major components of LBO one should know?
Marcus: Thanks for the Q&A.
Marcus:
Thanks for the Q&A. Can you give a concise time-line of the PE recruiting process for MM and Megafunds? I know this info is floating around piecemeal in various threads but it might be helpful to have it consolidated here.
For the record, I am an incoming FT analyst at a strong MM boutique whose going to be hustling for offers. Just need to know how long to wait before marketing myself.
Thanks
Leadership can be defined in two words: "Follow Me"
blastoise wrote: what do you
what do you mean it have shaken up this year
can you explain how it differed from previous years for naive on this website
ty
In previous years the megafunds kicked off the process, usually earlier and earlier every year. Typically they would recruit in the spring of the previous year for a start date the following year at the end of the summer. So you'd get an offer in spring 2009 for a august 2010 start date. Once the megafunds were done (with some overlap) the top MM funds would do their thing. Then everyone else.
Last year was a bit of a clusterfuck and from what I've been told many of the megafunds were pretty pissed off about having to give offers to pimply faced 20 year olds that had absolutely no experience to talk to. As a result, a lot of the megafunds have agreed to wait until early to mid-2013 this year to give offers for 2013 start dates (makes sense).
So all the middle market guys are having a field day. From where they stand, they have the first pick of the crop, something they've never gotten to do before since they weren't able to compete for talent with the big boys. The megafunds, being smart guys, realize that they may lose quality candidates who decide to accept an offer in-hand rather than wait until a possibility of having a megafund offer come the following year. So what they've been doing is having cocktail events, dinners, lunches etc... with some of the "desirable" candidates where basically they tell each of them "I think you're the one. Don't be impatient, wait till next year when we're hiring rather than accept an offer with X MM PE firm now, you won't regret it, I want you at Bain/KKR/Apollo etc". One in the hand is clearly better than 2 in the bush, but never underestimate the power of flattery, salemanship and pure unadulterated bullshit. Let's be frank, they will tell 60-120 kids this same "I loved you the moment I saw you, I will fight to get u at offer at my megafund" story, and of them only 5 will get actual offers, so they are knowingly lying to 55-115 kids. Most likely you're one of those poor bastards that are passing up a primo PE offer for a maybe in the future. They'll also pitch you the optionality of "if it doesn't work out with the megafunds" then you can always do MM rt after. Also bullshit. The fact that the megafunds had the pick of the litter early on and now modified their recruiting strategy to a seemingly disadvantaged position suggests that the early bird was not getting any worms worth having. They've likely noticed a significaant detioration in the quaility of candidates they've been hiring and have made a risky decision to change the way they hire associates. The MM funds have never had this luxury before, but considering the megafunds did and have chosen to forgo it suggests that its not an advantage after all. I suspect the MM firms will NOT recruit next spring and they will follow suit of the megafunds and recruit the following year.
The new status quo in associate recruiting will be for the megafunds to recruit in Jan/Feb 2014 for Aug 2014 start dates and the MM will recruit Mar/Apr 2014 for Aug 2014 start date. Everything will normalize and we'll return to the pecking order.
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
blahnik wrote: Marcus,
Marcus, because I've seen a lot of your posts, I assume you're not a second year analyst. How was the process different for you given that you've got a bit more experience?
I'm a bit atypical. I moved to PE as a 3rd year at a MM shop and almost simultaneously got an offer at a large non-megafund (think THL, Silver Lake, Leonard Green). That was off cycle and largely dumb luck as they felt they underhired for the following year and picked up one more seat. So I will have been at in my MM PE role for about a year and will start at my new gig come the summer time. So kind of intentionally holding myself back a grade (will be a first year PE associate twice).
As a more experienced candidate you really have to rely on your MD's to get your name out there. As a 3rd year, I was getting very few interviews on my own, despite a solid background.
So the key is your MDs' recommendation and networking. Obviously you have to be very competitive otherwise as well, but that goes without saying.
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
^ Marcus, maybe I'm getting
^ Marcus, maybe I'm getting your profile mixed up with another WSOer but I thought you were maybe associate-1 at a BB (having moved from a good MM analyst background).
Kanon wrote: ^ Marcus, maybe
^ Marcus, maybe I'm getting your profile mixed up with another WSOer but I thought you were maybe associate-1 at a BB (having moved from a good MM analyst background).
That's roughly in the ballpark of my profile as of last summer.
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
Marcus_Halberstram
what do you mean it have shaken up this year
can you explain how it differed from previous years for naive on this website
ty
The new status quo in associate recruiting will be for the megafunds to recruit in Jan/Feb 2014 for Aug 2014 start dates and the MM will recruit Mar/Apr 2014 for Aug 2014 start date. Everything will normalize and we'll return to the pecking order.
Thanks
Leadership can be defined in two words: "Follow Me"
Marcus_Halberstram
^ Marcus, maybe I'm getting your profile mixed up with another WSOer but I thought you were maybe associate-1 at a BB (having moved from a good MM analyst background).
That's roughly in the ballpark of my profile as of last summer.
Ah, alright. Well congrats on the move to PE then... and the next move to the large non-MF coming up. Given your profile, you're older than the typical analyst-1/2 that typically join as 1st year PE associates. Your experience would very likely allow you to be better prepared compared to younger analysts, but did a lot of the PE firms have an issue with your age? Maybe presuming that you're too senior for the role and assuming that you would be unwilling to be the bottom of the totem pole again? If so, how did you convince them otherwise, and that you'd be comfortable working around younger associates?
Kanon wrote: ^ Marcus, maybe
^ Marcus, maybe I'm getting your profile mixed up with another WSOer but I thought you were maybe associate-1 at a BB (having moved from a good MM analyst background).
That was his story in the past, hence my post above. Dunno where this new tale comes from.
@ OP, why you fraudin' brah?
NewGuy wrote: Kanon wrote: ^
NewGuy wrote: Kanon wrote: ^
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
Marcus, Thanks for the thread
Because the mega funds
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
And rossi, there will
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
Thanks for the thread. What
I don't have much knowledge
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
If you had to do it all over
I've been working for a real
Looks like this thread was a
Not to hijack the thread,
Thanks for the great advice.
blastoise: what do you mean
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
SirPoopsaLot: blastoise: wh
Hey Stringer, if interested