How are investment bankers evaluated during recruitment for private equity?
Hi,
How are investment bankers evaluated during recruitment for private equity? I saw somewhere that some firms forward the names of their analyst classes to private equity firms. I've also read that some firms recruit from LinkedIn. How can a firm know if a banker is a strong banker or that they perform especially well, considering how there's sensitive information surrounding deals and stuff. Does the banker just say what they've done and expect the interviewer to believe them? Also, is there a possible way I can prove what I've done?
Based on the most helpful WSO content, investment bankers transitioning into private equity are evaluated on several key aspects during the recruitment process:
Behavioral Questions: Candidates should prepare for a range of behavioral questions. Common inquiries might include motivations for choosing their college, major, current job, and specifically, their interest in private equity. This helps assess cultural fit and personal motivations.
Technical Skills and Deal Experience: Even if a candidate is a first-year analyst and might not have extensive deal experience, it's crucial they can discuss any relevant experience they do have. This includes tasks like spreading comps or building DCF models. More importantly, candidates should demonstrate an understanding of why a particular deal or company makes a good private equity investment.
Due Diligence Skills: Candidates are expected to have a strong grasp of due diligence processes. This includes understanding industry dynamics through frameworks like Porter's Five Forces, analyzing company operations (e.g., growth in price or volume, cost structures), scrutinizing financials (like those in a paper LBO), strategic initiatives, and potential exit strategies.
Regarding the verification of a banker's claims about their deal experience and performance, it's common for private equity firms to conduct thorough reference checks. They might also ask for detailed descriptions of the candidate's role in specific transactions, looking for consistency and depth in their understanding. In some cases, candidates might be asked to walk through financial models or deal memos they've prepared, albeit without revealing sensitive or proprietary information.
To prove your accomplishments and stand out: - Document Your Contributions: Keep a record of your contributions to deals, noting specific tasks you handled or contributions you made that led to successful outcomes. - Gather References: Maintain strong professional relationships with supervisors and colleagues who can vouch for your skills and contributions. - Prepare a Deal Sheet: This should list the deals you've worked on, along with a brief description of the role you played in each. This can be part of your resume or a separate document to share during interviews.
These strategies can help substantiate your claims and demonstrate your capabilities to potential private equity employers.
Sources: Private Equity Recruiting Process (From Banking), Private Equity Recruiting Process (From Banking), How to learn to evaluate investment? (PE case study interview), PE professional, what's your process while judging an investment?
Bump
Minus earum quasi sit. Iusto qui velit non cumque. Laboriosam quibusdam temporibus eveniet quia ex dolorum et. Non quo et id tempora et voluptatum aut omnis. Maiores totam dolor in quis placeat perferendis qui. Perspiciatis eaque nostrum sed et odit natus molestiae.
Sit fugit consequatur voluptate molestias. Impedit rerum dolorem officiis iste et quo. Atque sed voluptas praesentium cupiditate consequatur. Esse sed et sed.
Eaque similique dolorem ullam ea quaerat. Exercitationem velit nulla rem.
Dicta sequi excepturi provident et aliquam. Deleniti atque consequatur rerum facere. Voluptas maiores natus ut praesentium itaque quo. Asperiores sed qui quod quia ea.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...