PE in Australia

Orange,

How would one go about interviewing at one of these shops? I currently work at a small NY PE fund (2 years) but would consider leveraging my experience to work in PE abroad (simply for the diverse experience). Any thoughts?

I believe that private equity as an asset class is going to be around for a long, long time to come. I don't just say this because I happen to be in PE. I made a very conscious decision to switch careers and get into PE after careful consideration of the macro trends that are driving the PE boom.

The credit market situation of today is nothing more than a temporary shock, an overdue correction to the liquidity excesses of the past half a dozen or so years. The problem will surely go away, and faster than most think, and the PE boom will continue with a vengeance. The difference will be that PE firms will be forced to underwrite to more growth and operating improvement than they did before to realize the same (or even lower) returns, but I view that change as healthy for the industry. The PE governance model, in my view (I came from the corporate world before I switched to PE), is clearly superior to the public company model. It is not news that PE-owned companies are almost always run more efficiently. And the sheer amount of capital worldwide seeking a home in PE is only going to grow over time.

All this indicates to me that Australia, a country with solid growth prospects, will see a surge in PE. My firm recently started targeting Australia aggressively, for example. Given the mess in the US, activity in the rest of the world has become a bigger priority than ever before.

That said, mediocre people will never last in PE. I don't mean to sound haughty, but the very nature of PE which forces managers to squeeze out every ounce of value in a deal and optimize and obsess over results quite simply demands high-caliber employees. So my answer to your question is yes, I expect many more to have an opportunity to get into PE in the future but the jobs will be coveted and the competition to get hired by a top firm will be intense. There may be an adjustment period where availability of jobs outpaces (temporarily) qualified candidates, and some "mediocre" (to use your word) analysts may get in, but once they're in, those people better deliver or else they will be looking for a new job soon. The good news is that good PE firms tend to be very good at training their professionals so a dedicated but formerly mediocre person can make it through newfound dedication.

Also, I expect the PE boom outside the US to jack up the demand for American PE and banking talent overseas. Already, I see many Americans moving to Asia, for example, sometimes straight out of B school, to work in PE.

Thanks a lot for your detailed reply toro! :) In your opinion what may be different between the skillsets required in PE and banking such that a previously average ib analyst may become an excellent PE analyst?

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