How to Be a Good PE Investor
Currently an A1 in IB and an incoming asso. at an MM PE firm. Truthfully, the technical bar in my interviews was not very high, and I want to learn how to get better at being an investor. As a novice, I wanted to turn to the community for resources to learn how, quantitatively and qualitatively, I can learn to be a good investor beyond the sake of performing well in interviews. Of course, I know how to build an LBO, but I want to learn how to get really good at that second layer and also build industry expertise. All this to ask, what things should I be reading (memos, textbooks, books, primers) to really learn how to be a good Private Equity investor? Any sector specifics on power, industrials and/or renewables are also welcome.
Sincerely appreciate any thoughts or suggestions!
To excel as a Private Equity (PE) investor, especially as you transition from IB to an MM PE firm, here’s a roadmap based on the most helpful WSO content:
1. Master the Technicals Beyond LBOs
2. Develop Industry Expertise
3. Read and Absorb Key Resources
4. Hone Your Qualitative Skills
5. Stay Updated and Network
6. Sector-Specific Modeling
By combining technical mastery, industry expertise, and strategic thinking, you’ll position yourself as a well-rounded PE investor. Dive into these resources and keep refining your skills—success in PE is as much about continuous learning as it is about execution.
Sources: Renewable Energy PE Overview, Renewable Energy PE Overview, Thoughts on Power and Renewables IB, Books relevant for PE/VC Professionals, Infrastructure Private Equity Basic Skills
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I would say understanding the “why” behind every analysis, discussion, deck, etc that you create is imperative and will help you start to build that “second level thinking”. In my experience this can only be achieved by pushing your VPs/Principals/Partners to get their thought process behind tasks as opposed to just “processing” them. In terms of industry expertise I am a firm believer that specialization leads to differentiation as an investor so finding a senior with great sector expertise and self-staffing on deals that you find interesting will allow you to quickly build a comparative set. Lastly, I would quickly start to form a running list of things you like to see and don’t like to see in businesses. Over time this will serve as your personal investment philosophy that will continue to be refined as you get more quality reps.
P.S. I would also just absorb any an all investing resources you can find podcasts, books, audiobooks, etc. Some of my favs include: The Most Important Thing (book), Capital Allocators (podcast), The New Tycoons (book), Thinking Fast and Slow (book)
Thank you! This is all very helpful. Unfortunately, I’m in group pretty far away from where I’m going for PE, and my banking group doesn’t see much sponsor backed activity, either. However, I definitely still see value in pushing my VPs and I love the list idea as well
Thank you for the reading/podcasts recs as well. Much appreciated.
Bump - would appreciate more input from current PE ASO1s
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