Why pe?

Well I'm currently not in

by suchislife (Senior Monkey, 80 Points) on 7/21/10 at 10:09am

Well I'm currently not in banking. I would say at least speaking for my self, that PE offers a gate way into real business, for example if you ever wanted to own a corporation and build upon that platform and create an internationally competitive company private equity might offer the skills to do just that.

I might be naive in saying this but I see PE as a tool to change industries and truly create something great down the road. I currently see a lot of growth in Central, South, America, and the Caribbean (Dom. Rep.) the problem in these areas is that most of the industries are controlled by large family owned monopolies, in order to compete you must have some muscle behind you equity wise as well as debt wise, thus I see PE as a way to eventually compete in that arena and truly strive to do something great. Is PE the only way to achieve this? NO but sill it is one of the ways to do it.

I might be naive but that's my 2 cents.

What's your story?

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Because PE is amazing. You

by CompBanker (Neanderthal, 2258 Points) on 7/21/10 at 11:01pm

Because PE is amazing. You get paid a great deal more than bankers and you work a heck of a lot less. Your income is incredibly stable due to management fees, so even if a downturn comes you're still going to get paid. Bankers and other service providers respond to you --- you set the pace. If you need an extra day to get something done, it is never a problem. If you don't call someone back, nobody is going to call you out on it. Even as an associate I've got service providers sending me small gifts and offering to take me out to sporting events. Honestly, it doesn't get any better.

To top it off, the work can actually be very interesting. I travel a lot, and travel is much, much more fun when you're only working 50-60 hour weeks. You get to enjoy dinners, have drinks at the hotel bar, go to the hotel pool, etc. I actually look forward to getting new deals in house, and often times I request to be put on certain deals that I find interesting.

So, yes, PE is everything that it is hyped up to be. Unfortunately -- so is banking.

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Of course.

by CompBanker (Neanderthal, 2258 Points) on 7/22/10 at 7:23am

Of course.

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CompBanker, sent you a PM.

by jc100021 (Baboon, 125 Points) on 7/22/10 at 9:31am

CompBanker,

sent you a PM.

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Don't just do it because it

by fk (Senior Monkey, 67 Points) on 7/22/10 at 12:05pm

Don't just do it because it is the logical "next step". If you live and breathe executing deals, go for it. If you see it as a good platform to do something else later, go for it (but do think about what that something else is and actually stick with your plan). If you just like getting paid a shitload of money for work that isn't super hard and is semi-stable then go for it. But most (I'd say shops that compbanker work at are the exception and not the rule) shops are still totally focused on financial engineering and the associate role is basically the banking analyst role with a little more responsibility and a little less/more predictable hours.

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schifm08 wrote: I've recently

by CompBanker (Neanderthal, 2258 Points) on 7/25/10 at 10:50pm

Impossibly difficult question, I've been at my shop for about a year now and so much of it just depends on what stage of the deal process you're in or what project you're currently undertaking. Maybe a few broad categories will help.

New Deal Evaluations: This could take up 80% of my time or 5% of my time in a given week, depending on what's going on. Overall, it's where I spend the majority of my time. This involves the following:
- Reading offering memorandums (I probably read about 1 a week recently)
- Reading / marking up documents of 3rd party providers (Legal documents, industry reports,environmental reports, IT reports, etc. etc.)
- Conducting phone calls and responding to requests from lenders regarding an opportunity. Often involves answering the same question a bazillion times and sending over a new LBO model every time someone makes the most minor tweak.
- Analyzing data in a dataroom or provided by a company. Talking to management / bankers about the company.
- Discussing the opportunity with the team.
- Preparing presentations/documents to our investment committee for investment approval.
- Facility/diligence visits.

Portfolio Company Monitoring: Usually 10% of my time, but every few months it will be 75% of the week.
- Reviewing company materials (monthly reports).
- Responding to 1-off questions or comments from management.
- Preparing or assisting in the budgeting for the following year (some CFOs do this alone, others require a lot of hand holding).
- Special Projects (this could literally be anything).
- Attending Board meetings / dinners / misc phone calls (just a couple days each quarter).
- Refinancing a portfolio company that is busting covenants (this recession has made this a more common experience for many associates, i'd imagine).

Internal Projects: Not a significant part of my job, usually just a day a quarter to compile reports.
- Preparing reports on our portfolio to our internal team and limited partners. (Ultra-lame, nobody likes this)
- Improving internal procedures, such as adding functionality to our LBO model or other templates.
- Company events (summer party, winter party, deal closing party ... yes, lots of partying!)
- Going to Boston Red Sox games with service providers that want our business (probably went to a half-dozen games in my first few months on the job, usually as a tag-along with the senior guys, but recently I've been getting my own, personal invites).

Of course there are a number of other things that are a part of the experience, but they are more one-offs. For example:
- Selling a portfolio company.
- Fundraising.
- Recruiting the next class of associates.

That's pretty much it. I probably spend about 1/3rd of my time on the phone or in meetings. As for travel, according to my "files," I spent 52 of my first 365 days on the road.

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CompBanker wrote: schifm08

by Guest1655 (Senior Orangutan, 400 Points) on 7/27/10 at 1:43am

Awesome post.

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CompBanker Excellent post,

by Cmoss (Senior Baboon, 221 Points) on 7/27/10 at 3:38pm

CompBanker

Excellent post, how did you get into PE?

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Biggest adjustment I've dealt

by TheKing (Senior Gorilla, 818 Points) on 8/2/10 at 9:03am

Biggest adjustment I've dealt with since moving from MM IBD to MM PE is the difference in urgency. As CompBanker said, there just isn't the same insane deadline pressure as there is in banking. Maybe this isn't true for the KKRs and Carlyle's of the world, but at my MM firm, there aren't kill-yourself, work-all-night deadlines. This has been (and likely will be) the hardest adjustment for me to make by far (but a very nice adjustment at that.)

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CompBanker, Are you Pre-MBA

by TheHungryOne (Baboon, 104 Points) on 8/9/10 at 10:52pm

CompBanker,

Are you Pre-MBA or Post-MBA? For the most part, are you enjoying PE? Do you plan on staying in it for the long haul?

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If asked in an interview you

by Marcus_Halberstram (Neanderthal, 2244 Points) on 8/21/10 at 4:31pm

If asked in an interview you need to say "the money motivates me, but the love keeps me grounded"

I personally, got into IBD in order to have access to PE jobs. I didn't want to be a banker when I was in college, I wanted to be a PE guy.

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