On-Cycle PE Recruiting is Paradise

On Cycle PE Recruiting is Paradise

You’re halfway through your junior summer internship in banking. You hear murmurs that the incoming full time analysts who are in training are already recruiting for PE. 3 days of interviews goes by, and you slowly hear the news trickle in. Your buddy from Wharton in your analyst class has all the information. He points you over to the incoming analysts grabbing coffee in the lobby. “You see Jason over there? He just signed with Apollo. And that’s Sarah, she’s going to TPG. Steven, the tall guy in the loafers, he had an in at CD&R Industrials, I heard his dad knows a guy. The one with the glasses is Amir he’s going to Silver Lake, he’s totally cracked. Also my investment club mentor signed with KKR healthcare, and he said he would plug me next year.” 

Your Wharton friend Daniel keeps talking but you can’t hear anything. You’re blinded by the sight of the 4 megafund analysts. “So you’re telling me these 4 signed with megafunds before they started their banking jobs?” They begin walking past and you turn to stone. You yearn that even a whiff of their megafund royalty in the air would bless your nostrils. On that day, you pledge to yourself that you will land a megafund offer.

Move over IB Prestige Rankings Tier List #257. You’re on the PE forum of WSO now. You start learning everything you can about the new prestigious world of private equity. You buy all the courses available, and promise yourself that you will prepare all senior year for on-cycle recruiting.

You have officially adopted the MF mentality, and think you’re definitely going to Blackstone / Apollo / KKR / TPG / Carlyle /  *insert any other name brand fund* that others drool over on WSO

The headhunters begin to visit your campus and hold information sessions. You’ve been preparing your “why PE” answer in the mirror for weeks now. Nothing can stop you. Your friend Jim who’s going to Jefferies meets with them before you. “Wtf they asked me about specific clients they cover which I’m interested in? How am I supposed to know that I’m only a senior in college?” What an idiot. That’s why he’s at an upper middle tier MM bank, while you’re at a top tier BB. You show up to the headhunter meeting and know everything. The clients they cover, their strategies, your specific sector interests, and you even start going through your deal walkthrough unprompted before the headhunter stops you. “She probably just doesn’t want the other candidates to get embarrassed by their lack of preparation” you say to yourself as you walk back to your dorm room, knowing you’ve successfully guaranteed yourself all the MF interview invites from Amity Search Partners.

You spend your entire spring semester preparing for interviews and dreaming of being the next Henry Kravis while the rest of your friends party, travel for graduation, and fully enjoy the last time they’ll have a 30+ day break from work for the next 40 years. “Hey are you going to join us for that trip to the Rocky Mountains after graduation?” your best friend asks. “Nah - I’ve got a date with Porter’s Five Forces, you wouldn’t f***ckin get it buddy.” He’s going to Deutsche Bank, have fun going to lower middle market PE.

You gradually master different model tests, you hop on the phone with Amir from Silver Lake (he’s still a first year analyst in banking) who tells you everything there is to know about PE recruiting. Associates from PE firms begin directly reaching out to you for coffee chats. You know you are an anointed one at this point. You can sense on cycle is beginning soon. 

A few more days go by, you continue to frantically prepare. Out of nowhere your phone starts ringing non stop. All the headhunters are inviting you to interview. 

You rush to interview and face rejections from 3 straight $15bn+ funds you go to (not a knock on anyone, these jobs are f***ing hard to get)

After your third rejection, you check your phone to see you’ve run out of MF interview offers, and in a panic you begrudgingly decide to take a Veritas interview offer as your last shot at on-cycle. “It’s not even a MF” you grumble as you enter their offices. You know you’re above them, this interview should be a breeze. Stepping into the dimly lit conference room at an ungodly hour of the night, you slowly grin and convince yourself you always wanted to be at a “lean UMM with upward trajectory and top notch returns”. So what, you won’t impress at the bar, at least other socially awkward, one dimensional finance hardos will respect you. The interviewer walks in, shakes your hand, you make some light small talk. You can already tell this is going to be easy for you. You already survived a couple rounds at *insert MF* just a few hours ago, this is nothing. 

You proceed to get absolutely f***ing grilled by the Veritas associate. By the second paper LBO, your hands are shaking, you’re sweating through your suit, and you start to forget everything you learned from your months of preparation. He hands you a CIM to review and your mind goes blank. Two more interviewers join to do a mock IC, and the three of them proceed to grill you all over again. You get dinged within an hour of stepping into their office. You sadly walk out of the building, convinced your MF PE dreams are over.

Recruiters, older banking analysts, and even your mom tell you not to worry because everyone knows “there’s always a second wave” of recruiting later on. They swear none of the MFs filled their class, and that there’s tons of seats left everywhere.

You sit and wait, every few weeks you hear from a friend of a friend that *insert MF* ran a process, but you didn’t receive anything from the HH’s.

6 months goes by. No offer. You start taking interviews with UMM / MM funds, telling yourself that it’s “for practice” to prepare for when Advent / CVC / Permira finally comes knocking on your door. 

After crossing all the megafunds off the list hanging above your bed, you find yourself in the upper middle market ranks of PE. KPS, New Mountain, Leonard Green, GTCR. Funds that you scoffed at just 6 months ago are now places you would literally cut your left pinky toe off to work at. “Upward mobility, top quartile returns, VP promote without an MBA. Why would anyone want a megafund over this?” you tell yourself as you walk into the New Mountain superday. After 5 grueling hours of interviews, they send you home. “It was as qualified a pool of candidates as ever, I’m sorry” the Principal tells you as he checks his phone to see girlfriend #2 ask him why he’s missed dinner for the third time this month. You later find out a management consultant got the job over you. You start to wonder if all those 3am nights and blown up weekends in banking are worth it.

Even worse, your former classmate’s friend’s ex-girlfriend tells you that Jessica from your alma mater was the one who got the job over you. “What? She doesn’t even know what PE is! She was a psych major, this is ridiculous!” you angrily mumble to yourself as you scroll WSO’s “Undisputed, Certified, Megafund + UMM + Upper Tier MM PE Rankings #128” to see the next most prestigious funds available to you.

You slowly cross off all the UMMs from the list above your bed. Next up, the JAMMBOs (“Just Another Middle Market Buyout Fund”, for those who have a life). Funds which offer no differentiation, middle of the road to piss poor returns, but all the sweatiness of a $10bn+ fund. AEA, AmSec, Onex, Siris Capital. You constantly check WSO before each interview to see if these firms are prestigious enough to interview at. After a few weeks of holding off, you decide to go forward with it. You found one person from Onex that lateraled to a MF 6 years ago, allowing you to reconcile with your choices.

You think you’re going to go through your lowly MM PE interviews like a breeze. You get dinged from your first one. They said you were lacking on technicals. Dinged on your second process. HH mentions you could brush up on casing. Dinged on your third. “But this is a lowly $3bn fund? How could this be?”. You start to realize that fund size has no correlation to interview difficulty, and that everyone in PE is f***ing smart. Regardless of the type of fund, it’s difficult to get a job.

9 months to 1 year in. Work has calmed down a bit, you’ve had more time to prep and learn from your mistakes. You keep seeing emails for sub $1bn funds who specialize in “value add distribution and healthcare services” that are clearly beneath you (the founders of these places are way richer than 99% of people at MFs). You pass up on them. My buddy told me Apax still has spots left for next year. 

A year has passed. Some snot-nosed incoming first year analyst in your group is going to Carlyle. Doesn’t he understand that’s a “lower tier” MF? (You interviewed at Carlyle during on-cycle and got destroyed on their model test, but you didn’t even want to work there anyway)

Some idiot frat kid you know just got a Vista Equity offer. “Lol who would ever want to move to Austin?” You tell yourself. Meanwhile you cold emailed all their associates, received no traction, and headhunters ghosted you when you tried to take part in their process. 

You accept your fate and start taking interviews at smaller PE funds, growth equity, infra, private credit, different geos, just hoping to land something, anything. “I’ve always been more interested in high growth, founder owned businesses than the financial engineering of traditional buyout,” you tell yourself. After 3 failed growth processes, you look into Private Credit. “Its a growing asset class with room for promotion, unlike 2 and out PE,” you whisper to yourself, trying to find anything to convince yourself you always wanted to work at Golub Capital. Another 3 months go by. No offers. You’re beginning to wonder if maybe you’re the problem. No way, you can do Paper LBO #7 by memory at this point. It can’t be you. You go to bed, continuing to dream of the day you enter the golden land of PE.

You’re getting put through the ringer at work, facing rejection after rejection in recruiting, and haven’t had a date in months. You don’t know if you can take it any longer. Then, your friend’s friend’s older brother mentions in passing that Kyle from your high school just got some “investing job.” Your ears perk up. Kyle is doing IB at Barclays. It must be some no name “value add distribution and healthcare services” firm in the midwest. You ask your friend’s friend’s brother where Kyle is going. “Uhhh it's something like Toe-moe Brah-vah, I think? Idk but he’s going to Miami. He doesn’t talk about it much.”

Your ears start ringing. All you can see is white. You think you’re going to pass out. Kyle is going to Thoma Bravo?!? I spoke with him in the fall, he couldn’t even do the Level 2 LBO. The news enrages you, and you decide that you will refuse to stop interviewing until you reach the golden land of private equity.

After six more processes, you still haven’t received an offer. You convince yourself that you’ve always wanted to do banking. Heck, you might even A2A now. You’ve always been more deal-oriented than analytical. PE is dead anyway. There’s no carry, it's a total ponzi scheme, you tell yourself, shedding a single tear as the associate from Veritas who doesn’t even remember having met you during on-cycle dumps everything into the VDR on a Friday night. It’s your third sponsor sell-side in 8 months, too bad all have been busted processes so you have nary a deal toy to speak for in interviews. You hear about two more people from your graduating class who landed MF offers. “Don’t they realize it's 2 and out? While they pay to go to business school, I’ll be a VP at a top BB. The only people who do on-cycle are prestige-chasing fools.

18 months into banking, you sign an offer with Rock Hill Equity Partners, an $800m fund specializing in value add distribution and healthcare services headquartered in Columbus Ohio. “Value creation has always existed in the lower middle market, I didn’t want to go to a megafund anyway.” 

On-cycle PE recruiting is paradise.