How to Prep Before Starting PE Gig

WSO,

I will be starting as a Pre-MBA PE Associate at a North America-Focused MM Buyout Fund this summer. How can I best prepare for the job?

Some people have told me to read books (basically narratives), but how can I best prepare for the technical aspect of the business, i.e. analyzing businesses throughly, not just the financial modeling aspect? I know there are some case study prep books for management consultants that I can read.. anything else?

Much appreciated! Xoxo

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Excelling

PE

5y

Joined PE about a year ago and can share a few things that either were helpful or I wish I would have done more of:

Read as much as you can about the industry to look for recent trends in the types of businesses firms are investing in (PEHUB is a great source and definitely sign up for their daily newsletter)
Learn about as many kinds of business models as you can (take a 10-K from companies in a few different industries and figure out how the company makes money, what its costs are, whether it's primarily debt or equity funded, what questions would you ask management, etc.)
If you did not get a lot of modeling experience in banking, take a 10-K and build a full 3-statement model for the company

Really you will learn how your firm approaches investing (i.e. how their Investment Committee letters are structured) on the job so don't worry too much about it.

Good luck

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Authored by: Certified Private Equity Professional - Vice PresidentCertified Private Equity Pro

Entendu

PE

5y

Most Helpful

I'm going to advocate the opposite here. You have a few months before you start. Take that time and enjoy your life. Travel, see family, friends, go into your new job with a clear mind.

First of all, the learning curve will be steep regardless of how much you prep. You will find that the models you built in banking are inadequate for your new job. You will find that the industry knowledge you thought you had is actually quite superficial. You will find that all the prep you could possibly do will be made redundant in the first few months on the job. Assuming roughly equal levels of competency, the associates who outperform are not the ones who spend every free moment prepping for a job that they won't even fully understand until they actually do it. It's the associates who keep their composure, manage their stress and understand that it's a marathon - even over two years. 1st year comp tends to be the same across the class, or very tightly bounded, and I've seen very little correlation between this type of overly ambitious prep work and long-term success. The thing that not enough people talk about is that success in PE comes more from EQ, and ability to manage stress/burnout, rather than sheer IQ or level of knowledge.

Enjoy the time off, and be ready to run when you start.