Best Response

The question is testing your understanding of the industry and your understanding of yourself.

To be honest, I'm not sure a thoughtful response is a fair thing to expect from a 22-year-old college student, although the lucky kid who gets the job is going to somehow come off as giving a well-reasoned answer. You don't have a great sense of self at 22. I still haven't completely figured out who I am at 29, but I definitely didn't know what I was good at and what I was bad at when I was in college.

What is it about you that makes you best cut out for being in private equity, and not, say, equity research? What are you passionate about when it comes to the job?

I can't answer the question for private equity. And I can't answer the question for someone else. But I can answer the question for why I enjoy being a buyside quant.

I've always enjoyed creating and discovering stuff. As an engineer, I believe that social and economic value gets created by discovering stuff about the world and then building stuff that takes advantage of those discoveries. And I'm uniquely cut out for that in quant finance. I enjoy programming- I enjoy making stuff work. I find stats, calculus, and the occasional proof a lot more fun than the average person. I like taking a look at a problem, understanding it on 5 different levels, and coming up with a solution. I love the fact that on the buyside, my analysis is able to help the business make or save amounts that sometimes have more than seven figures attached to them.

I like working with geeky people who treat each other with respect and care about competence. Being a quant is one of the rare places in finance where all of that comes together. And the buyside does a better job of making sure the quants (as well as the technology people- they matter just as much as we do) get the same respect as the traders, bankers, and businesspeople.

So to answer your question, talk to five PE people and ask them the same question. Figure out their responses. Figure out if you might be like them. Then give an honest answer that captures the insight you've gained about their business and yourself.

 

It's a stupid question because you are 22 and have no idea, and like @"IlliniProgrammer" said, he's still figuring things out at 29 (I'm 30 and am still figuring things out. And his advice is great.

Most people at my age and even older (if they are truly honest with you) cannot answer that question "why PE/banking etc" convincingly, unless it is "It's something I fell into" or "the money" or "I don't know what else to do" or "I'm good at it/I haven't found a reason to leave/quit"

You have two options really.

  1. BS some answer you think that they want to hear. Use @"IlliniProgrammer"'s advice. Canvas some people, and tie it to your story. So lets say you hear the development angle from a person. Well in my case, I've traveled a fair bit to developing countries. So I could say, that I saw places change in front of my eyes, new buildings, roads, goods, services etc, where there was none or much worse before. That was PE at work, growth capital for businesses to create value, see real time change in goods and services available to everyday people and that was just cool. And being in PE (assuming more generalist) you'll get a lot of exposure to different sectors and how this is all done...

Or something like that.

  1. Be up front and honest. Something like "look I know that you are busy. I'm not interviewing for a banking position where they expect me to lie. So I'm not going to lie to you since that's a waste of everyone's time" I want to do PE right now because I like/am interested in investing and being a longer term investor and getting a broad range of experiences (working on deals, DD, looking at different sectors, liasing with different people, lawyers, marketers, company people, etc). or something like that (change it to stuff you like or like about investing/doing deals, or aspects of it that you might like). I can't tell you honestly that I'll do it for the rest of my life, or that I will be good at it, because I'm only 22. But I will be committed, and I've shown commitment to stuff (insert clubs/activites etc here) that can be demonstrated, honest and hard-working, like I am with this answer. What I do know is that I will work hard, put in the hours and want this gig. Or something like that. Then flip it to them.. WHY did they chose PE? You'll be surprised to see people will give out not good answer or look uncomfy (this is not necessarily a good thing but if you do it gently enough and try to get to them to relate to you... So how did you end up in PE and why did you choose it, with a smile...) - they just might smile back and give you a nice answer... and the next round/job.

Option number 2 is definitely much more risky, but you'll certainly stand out. If its bad, then you don't get the job. If its good, you have a huge advantage on most applicants, and can steer the conversation... I would argue that option number 1 is much safer, but if you are on an even playing field, that it would not separate you from the pack unless you get lucky (Luck is a huge factor) or unless something else vibes. In other words, if its competitive, option number 1 won't get you kicked out but it won't really help either, in most cases.

In the end it depends on your personality. I'm totally an option number 2 answer type personality. I do a terrible terrible job at faking option number 1 and I' am sure people can see right through it. Others are different.

Personally as an interviewer, I would strongly prefer number 2 (and I might be in the minority). As someone who meets fund managers everyday and also acts as an interviewer for his alma mater, I am sick of over-prepared people who have no genuine answers for anything; it's a waste of my time and time is something you never get back. Some people are really good at selling it and you go away convinced, but then upon further reflection you think that they were just the best presenters/salespeople and kudos to them. Some people you see just have a nose for what they do, whether they like it or not, they are just really good. These people are few and far between. The rest? It's just annoying hearing the same over-prepared answers again and again. You just kind of think, "blah, next"

Good Luck

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
 

How about; I like doing the equivalent of electroshock therapy to boring ass companies?

Global buyer of highly distressed industrial companies. Pays Finder Fees Criteria = $50 - $500M revenues. Highly distressed industrial. Limited Reps and Warranties. Can close in 1-2 weeks.
 

Come on man, you asked the same exact question about Hedge funds 5 minutes prior. A substantial percentage of the posts on this site address your exact questions, so are you really too lazy to figure this one out on your own? Stop littering the recent post area with your garbage.

 

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