Fund of Funds Interview - What should I know?
Hey
I have an interview coming up for a fund of funds PE firm analyst position. This will be the 2nd round; a 3-4 person conference call. Does anyone have any experience with a FoF? What did they focus most on, what should I really make sure I know? Any suggestions on study material I should look at beforehand?
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Analysts at private equity funds do research on companies that they might invest in.
Analysts at private equity fund of funds do research on private equity managers that they might invest in.
Clients use FOF managers in their portfolios for several reasons: (1) they don't have enough money to invest directly in a PE fund, (2) they don't have access to that fund (its not open) (3) they believe a FOF will give them greater exposure to a larger variety of strategies with less invested capital. Therefore, PE FOFs add value by choosing good managers whose funds do well.
You'll be doing a lot of interviewing managers. Hearing about their companies, their strategies, their process. It would be useful to know the hot areas of PE as well as the different types of funds. Also, talk about how its important to monitor the exposures across the portfolio. The risk. Ask them how they monitor these things. Ask them how they decide to invest in a manager. Ask them what their process is.
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just so you know, its going to be very hard to give you more than what NYorker had said--as this business is VERY dependent on exactly what type of FoF they are, what industries they focus on, how they make investment decisions, etc...
i think one way you could really set yourself apart here is to learn as much you can about THIS SPECIFIC FUND...i.e. whats their investment strategy? how do they decide on funds to invest in? im assuming a lot of these FoF places like to hire people who at least in part understand their investment strategy and have many of the same beliefs that the PM's have. i think you could really impress them by having an in depth knowledge of their investment strategy.
I agree with leveRAGE - its probably going to be difficult to do that if the fund itself doesn't come right out and state what their strategy is on their website. Without access to their materials, you certainly won't be able to get any insight as to what their managers are.
If you can do this great, but if not I would spend more time focusing on things you can know and things you can prepare for. Investors love to talk about how they decide to invest, so any way to get them on a roll about their process, best/worst decisions they've made etc, will help grease the tracks and create robust conversation.
PE FoF/Secondary/Direct Inv Interview - What to expect ? (Originally Posted: 01/14/2010)
Hey guys, I have an interview coming up with a $15Bn + PE firm that makes FoF, Secondary and Direct investments. I've been out of work for a a few months but my background is IB and HF. Does anyone have any advice on how I should prepare for this interview and what to expect ? It is a 30 minute phone interview. Any ideas if I should prepare for technical questions, and if so, what kind ? I've been out of the loop for a while so I want to be prepared and sharp for this interview.
Any advice appreciated. Many Thanks.
pm me...
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Should I buy the WSO technical guide for learning an lbo model ?
PE FoF - Questions for Interviewer (Originally Posted: 05/06/2010)
Hi All,
I have a PE FoF interview tomorrow at a shop with over $20 billion under management and I was wondering what are some questions candidates tend to ask the interviewer. I have two years of banking and two years of direct private equity investing experience. Been out of work for months, so I have been exploring different avenues of finance and out of practice in terms of interviewing.
Also, does anyone have any advice for answering the why Direct PE to FoF question. I know that lifestyle is a big factor, but I'm not sure if that is an appropriate answer.
Any help would be greatly appreciated. Thanks!
FoF tend to take much more time to make investment decisions, so if you have patience and enjoy taking long time to make decisions, then this can be a reason. Other thing you could say you wanted more challenge in DDs, as DD on a fund is more chanllenging compared to a company, because you needed to assess the team, and investment track records.
You can say that you want to have a broader understanding of ther PE industry. This type of role give you a very good understanding of different strategies in PE, what makes good performers, how PE funds raise capital, what are the recent trends, etc. Also, most FoF also do co-investments which allows you to work on both the direct and indirect side which can be interesting.
I interviewed with one some time a go and one of the users on here - MezzKet - was very helpful.
Maybe you should look up the ILPA's private equity principles - when they releaed that it was quite an event and people are still talking about it (you need to be able to discuss the shift in power between LPs and GPs...).
I would definitely explain that you know what it means to invest other people's money but in order to get a full and broad understanding of what Private Equity is, you want to understand fund economics and what it's like to be a controlling GP and where investors have leverage... PE funds are only as strong as their LPAs... Say that 99.9% of top Associates at PE funds lack an understanding of how funds really work, how management companies really work and how they get paid... sure carried sounds simple until you get into clawbacks, retained liabilities etc. This is something you'd like to learn to make you fully versed in the PE field. Associates unfortunately (and even VPs) have no real understanding of which fund is allowed to deploy capital after investment periods, restrictions to investments etc. For a Managing Partner to know this off the bat and have deal experience is essential to maintaining a quality mangement company.
Secondly, you think that with so much dry powder available, recent study suggests 15 years, LPs (big LPs) especially are in key positions to renegotiate and pressure GPs into new terms for their existing funds, CalPERS is leading the way on this... Elaborate that it is an interesting time to be in the market...
Highlight the recent BofA deal (secondary FoF) and how for it's record setting size, it is still hazy and you'd really like to know what can force an LP out of a fund generating 3.5x cost...
I would definitely shoot back some intelligent questions to the interviewer:
Thank you all!!! Your advice was really helpful. Just finished with the interview. It was mostly fit, but I was able to include some of the above into my answers.
Fund of Funds Interview - Jr. Analyst position (Originally Posted: 02/08/2010)
Any ideas of what to expect in a first round interview with a fund of funds for a jr. analyst position?
Some information on the job description would help. A fund of funds could be looking for junior analysts for either of two tasks: 1) assistance with fundraising or 2) portfolio analytics, due diligence etc.
Fund of Funds Interview - Preparation (Originally Posted: 01/21/2011)
Hi All,
I recently got an interview with a chicago based Fund of Funds Hedge Fund (Grosvenor) and was wondering how to prepare for technical questions for the interview.
What sort of position? How did you get the interview? What's your background?
Fund of Funds Interview - Experiences? (Originally Posted: 10/02/2010)
Hi, I have second round interviews coming for fund of funds. I really think this is a good match for me, but I am not sure about the interview questions. Could someone please share his/her experience? Thanks
Some questions that come to mind...
-Why Fund of Funds? -Why not direct PE instead? -What's your 5-year plan? B-school? Stay put? -Name some GPs that you would consider investing w/. Why or why not? -What are some of the major traits you look for in a GP, and questions you would ask a GP while conducting due diligence on them? -What do you think your day to day duties are at a FoF?
I've never gotten any technical questions. Maybe some general market questions (where would you invest in now?) and mostly fit.
PE FOF Interview - What to Expect? (Originally Posted: 11/19/2009)
I have an interview with a legit PE FOF group coming up. I was wondering if anyone knows what questions I can expect to be asked. I have previous experience working in a hedge fund FOF type environment. Thanks.
see pe case study thread in the forum. that will give you some insights. assume you have prepared why pe fof compared to your current role. why pe over hedge funds. what would you look for in a fund. given you have previous fof experience, wont be surprised if you are asked to discuss where in the pe spectrum would you invest.
Some that come to mind:
There's a ton of things really, but for a FoF, you're probably not going to get any quant like questions if you were interviewing with a direct PE shop.
you're completly missing the fact that alot of those FoF you mentioned are huge secondary players... FoF aren't just pick and choose investors into new / early funds on a primary basis... they offer massive liquidity on a secondary basis to alot of overallocated investors... study the reasons why secondary FoF works in this environment and learn how they but portfolios, and understand portfolio terms/dynamics as that's what you'll mostly be doing in this market... no primary FoF exists... ONLY secondary's are getting done...
Thanks for response Kanon, very helpful.
I had a couple of PE FoF interviews and the majority of the questions I received revolved around fit (i.e. why do you want to be in FoF, why not private equity, what do you like about our firm, etc.) However, I did receive some technical questions, usually around my transaction experience (came from IB background). I had some case studies (some on-site), but they were straight forward and primarily involved paying attention to detail and following directions. Going back to the fit questions, I had the typical, "what's your 5-year plan" and "how do you see yourself fulfilling those goals here."
Fund of Funds interview prep (Originally Posted: 11/17/2010)
Hey guys,
I have an upcoming first round interview with a private equity fund of funds. There's going to be both a case and an excel exercise that will test us on our excel skills.
For those of you who have gone through similar interviews what types of things should I make sure I know how to do in excel other than the basic functions? Also what type of case should I expect?
This position is for an analyst position that does due diligence on current funds and helps evaluate and screen prospective funds.
Thanks in advance!
any thoughts on this?
Fund of Funds Interview Q's (Originally Posted: 12/07/2010)
I have an interview at a Fund of Funds next week as a junior analyst.
I know in A.M. or HF interviews you may have to pitch a stock or investment, and ask them what they look for in an investment etc.
Does anyone know how a FoF interview may be different? Should I have a few funds in mind to talk about (i.e. instead of a stock)? Also I'm guessing I will ask what they look for in a prospective fund, etc.
Any other good questions to ask or FoF specific interview tips?
How to analyse the past performance of Fund Managers;
Ask about their Research processes;
etc.
Fund of hedge fund interview Questions (Originally Posted: 03/23/2011)
Can anyone give me any advice as to what to expect as far as interview questions from a Fund of Funds?
What are good things to mention and/or talk about?
Are these technical at all? The position is a Full-time Account Management Analyst.
Thanks,
Phil
i don't ever post here, but is this for a FOF in the OC? if so, PM me, i went through it.
Hi, I agreed with you. Any way, your points of view make me thinking about some thing for my project. Pls try to keep posting. Tks and best regards Apart from that, you also can ref more resources at: http://interviewquestionsandanswers.biz/account-interview-questions-and… Goodluck.
Interviewed with a FoF, no response (Originally Posted: 09/27/2013)
I currently work at a small fund, 50 aum, primarily small cap. I interviewed with a FoF two weeks ago and thought it went fairly well. I sent a thank you email, he responded and said he would let me know about the second round in a week. One week later, no response so I sent an email, no response. Its been two weeks now, should I let it go?
Send a follow-up just saying you are still interested. If no response then look elsewhere.
Good Luck !
Call him.
I called him and it went right to voicemail. I guess I'll send him one more email on Monday and see what's going on.
Sent my last follow-up. This guy even said he would email me after the first interview. What a liar!
Got a reply. He said second round emails will be sent out next week to meet the president. He also mentioned that if he doesn't email me I didn't make it... That last sentence doesnt really make it sound so promising. Oh wells, lets see what happens.
Upcoming FoHF Interview with a ~$10B fund. Any advice? (Originally Posted: 02/21/2014)
I already posted this in Hedge Funhouse but thought it'd get more traction here. I did a search and came across the following suggestions: have an opinion on where the markets are headed, know the different HF strategies well, and have an opinion on why the FoF business model will continue to be viable. Any other suggestions? This is for FT by the way. Much thanks in advance.
There's a lot of risk involved in the allocation to several funds, so try to familiarise yourself with how FoHFs manage this risk. Also, look into popular funds within several strategies, what their biggest positions are and what you think will be good alpha generation areas for the new year. Lyxor has quite good pdfs if you can find any online.
FoHF Interview with a ~$10B fund. Any advice? (Originally Posted: 02/21/2014)
Did a search and came across the following suggestions: have an opinion on where the markets are headed, know the different HF strategies, and have an opinion on why the FoF business model will continue to be viable. Any other suggestions? This is for FT by the way. Much thanks in advance.
Be ready to give a really good answer about why you want to work in FoF and not investment banking or traditional investment management. Also be ready to "pitch" a hedge fund.
On top of what was already mentioned:
PE FoF interview. questions to ask? (Originally Posted: 03/10/2008)
I have a PE FoF interview today, and I need some intelligent questions to ask. I'm drawing a blank other than the standard, "could you give me an overview of the position...", etc.
Ask them about their investment strategy, what kind of funds they invest in (growth equity, buyout, venture capital, all of the above), etc.
Ask about what makes a good fund vs. a bad fund from an FoF investment perspective
Take their answers to these questions and just ask follow up questions and get into a conversation about this stuff.
Ask what the most difficult part of their job is.
What knowledge background do they use most.
Markets affect their work?
Typically FoF at banks are also involved in other initiatives such as Direct Investments or Providing illiquidity/Secondary investments. Usually a good idea to ask them which of the different types of investments that they do they like the best, and if they enjoy being able to do a variety.
Ask if it can be difficult to have a hands-off style of approach that a FoF has. Is it frustrating that you have to trust another manager of the PE fund you invest in, rather than be the one actively managing companies?
PE FoF interview - need help please! (Originally Posted: 01/29/2012)
So I got a response back from a firm I applied to, but wasn't too familiar with the role myself. I was wondering if you don't mind giving sharing me more information on this gig. What kind of opportunities may I gain from taking this position, and what on whether this is a solid gig from reading the following description:
Our client, a private investment management fund of funds is looking for an outstanding Junior Investment Analyst. This analyst will monitor client portfolios and analyze potential investment opportunities. The position is for someone recently out of college, with 1 -4 years of experience and no Graduate degree.
Responsibilities include:
Analyzing financial statements of private equity partnerships, including a review of partnership portfolio company valuations and cash flows Preparing client reports and presentations Assisting with special reporting, research, and due diligence projects on an ad hoc basis Performing an initial quantitative and qualitative review of potential private equity fund investments Conducting in-depth quantitative analysis of potential private equity fund investments
Requirements include:
1-4 years of analytical experience in investment banking, consulting, audit, investment management, or other similar fields Bachelor’s degree in business, finance, economics, business economics, or related field with a record of high academic achievement Strong interest in investments and the capital markets Strong quantitative and analytical skills Strong interpersonal, communication, and writing skills Ability and desire to work in a collaborative environment
-I actually have a phone interview with them very soon and do not know what to expect. If you might have any tips on this also, it would help me out a bunch.
name of the firm? if you don't want to disclose, maybe some comparable shops?
I do not know since I applied through a job placement agent.
There are a ton of threads on FoF. Seems like a very general description. I would talk to the placement agent to figure out more details about the firm.
So you will most likely be contacting PEGs (private equity groups) to discuss their investment strategies, looking at their management profiles and asking for a track record from previous funds. You might think people wouldn't share this information; however, if your group is going to be injecting 5-10 mil into a PEG you will be surprised at how much information you can get out of them. Let us know if you can get the name of the fund or similar funds...it would help a lot. Also, check out this website: http://ilpa.org/ilpa-private-equity-principles/
The due diligence of a PEG is different than that of a company... Think about why this might be: 1) You need to pay a lot of attention to the track record/companies in the portfolio/management success/failures. 2) You will not be zeroing in on a single product/company/etc.
The biggest benefit I think you can gain from working at a PE FOF is it will show you a multitude of different investment strategies and the way funds operate. This can be beneficial if looking to jump ship or go back to school (or even try to start your own fund). Believe me, you will HAVE to know how these funds operate if you were going to make an investment decision on them. I'll leave you with some advice that MezzKet gave to someone over a year ago (this means some of the info is dated...)
Upcoming PE Fund of Fund Interview (Originally Posted: 11/10/2014)
I completed my undergrad at a top 50 university, and just completed my masters degree in June. During my last school year I interned at a boutique PE firm.
About 4 weeks ago I cold-emailed a PE firm (about 1B AUM) inquiring about open position they may have (seeing online that they just met their fund-raising target). The first meeting was with a principle and it went great, he asked for some writing samples gpa etc, that I sent him after the meeting. During the meeting he expressed that they are looking for candidates and I am the first person they have met since they haven't yet began their active recruitment.
Knowing this I decided to meet up with the principle again this week to discuss few firms that they invest in and I will suggest for the firm to bring me on as an intern until they have made the decision to hire someone full-time. I am confident that if they bring me on as an intern I will transition into the position.
In this weeks meeting I want to suggest funds to invest in that meet their investment criteria; while I have a large list I want to narrow it down by finding more out about the management teams of each of the companies.
What is the best way to find extensive details about the management team aside from their website? Is there an online database that I can use?
This may be a dumb question but where do LPs get their info about the PE company prior to investing, i'm sure its more than just their website.
Bump...can someone help out?
Not much you can get beyond what's on the website. LPs will get additional information from the fund's PPM, a due diligence questionnaire ("DDQ"), and whatever other marketing materials that are provided to them and can then ask whatever follow-up questions they want/need.
URGENT: 2nd Round Interview - PE Fund of Funds (Originally Posted: 04/06/2011)
Hey
Ive got a 2nd round interview coming up with a private equity fund of funds. I am freaking out a little as this is the technical part of the interview process. I have very little knowledge of a fund of funds and have no idea what they may throw at me. I really need some help with what they may throw at me and what I can study in prep for this.
Search function my friend, search function.
Could not find anything on fund of funds
Bump
Try "FOF"
Interview with a Fund of Funds (Originally Posted: 07/22/2012)
I have an interview coming up for a PE Fund of Funds this week. I want to ask for some interview tips. Can you guys please share. Thanks.
Yeah go ahead..
I don't know if this needs to be said, but be sure you know about the firm you are interviewing with. I mean really know them. Don't just go to the about section on their website. Familiarize yourself with their team and individual backgrounds, and also their past and recent investments. If you know who your interviewers will be then you already have a leg up. Find a way to incorporate something you learned about them in your conversation. Best way to impress someone on a personal level.
Thanks. Any more specific interview tips for the FoF industry in general. I am from a banking background, so I understand the technicals but never interview for a FoF before so want to see if anyone out there who has more info for me. Thanks.
PE Fund of Funds at Top BB Summer Internship (Originally Posted: 02/06/2008)
Hi everyone,
I come from a non-target and was lucky to land an interview for a PE Fund of Funds group at a top BB. I was hoping to find some advice for interview questions. I am majoring in Economics, so I hope they will not focus so much on the technical aspects. I do have some background, but there isn't much more I can do in 1 day (interview is Thursday).
Hoping to get some insight for questions such as "Why PE?", "Why start in PE", broad questions that I would most likely be asked. I am sure they may ask about the markets and hopefully the rest is fit. I've been keeping with markets and reading some deals in dealbook, so I will fare well on the latter part.
Thanks for any help I may receive, and I'll let you guys know how everything goes. Wish me luck!
good luck!
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