PE interview at VP / Principal level

Hi everyone,

Long story short: I'm a young Director in a global M&A boutique and I'm seriously considering transitioning to PE.
I know the move is somehow atypical at this level of seniority but it seems to happen sometimes and I have several interviews lined up with a few MM and one MF. I'm more interested in MM but given the situation, want to have as many interviews as possible.

I spent quite some time online looking for interview advice for this kind of position (esp. when coming from non PE world) but couldn't find any: there are a lot of posts on analysts / associates recruitment but not for more senior level. I guess that being able to do an LBO model or talk in details about a deal I worked on won't probably be the key area of focus during the interviews.

So if anyone made a similar move / interviewed candidates with similar profiles and have feedback to share, it would be extremely useful.

Side question a lot more specific and less important: friend of mine in PE tells me that a question he loves to ask (future ex) bankers is "tell me about a sell-side you ran where you would have done something differently with the target vs what management proposed (in the CIM, MP, etc.) and tell me what your strategy would have been". How would you approach such a question?

Thanks a lot

Comments (25)

Jul 7, 2020 - 3:32pm
topspark90, what's your opinion? Comment below:

I would think they'd probe your ability to think like an investor. That should be your number one goal - to convince the interviewer that you're an analytical investor type trapped in a banker's body. I'd definitely expect deal walkthroughs to be fair game. Also pitching an investment. That question at the end from your friend sounds like exactly what I'd expect.

Most Helpful
Jul 7, 2020 - 3:52pm
Tamara_S, what's your opinion? Comment below:

I agree with the above comment.

They say that bankers get paid for any deal, whereas investors get paid only for a good deal. Therefore, it does make sense to know cold what you believe represents a good investment.

In terms of other areas, I would personally ask:

  1. Do you have an industry expertise and a network in that sector?
  2. Are you able to source differentiated and proprietary deal flow? What would make it unique?
  3. Are you good at building investment theses and proactively generating promising investment themes?
  4. Do you have a clear understanding of all aspects of transaction execution? Are you able to lead a deal team?
  5. Legal documentation: what is your current level of understanding and ability to negotiate key transaction agreements and lending documentation?
  6. What transferable skills do you bring that will be useful in portfolio monitoring?
  7. Do you understand the firm's culture? Do you think you will work well with other team members?

Good luck!

  • 8
Jul 12, 2020 - 7:59am
Black Jack, what's your opinion? Comment below:

Do you really see proprietary deal flow above the LMM level? I would think at that transaction value there is usually going to be some intermediary. Having a relationship with the company, bankers, etc might help if valuation / bids are the same and they need a reason to select 1 fund vs another, but is it that big of a differentiator?

Jul 12, 2020 - 8:58am
chaser, what's your opinion? Comment below:

Do you really see proprietary deal flow above the LMM level? I would think at that transaction value there is usually going to be some intermediary. Having a relationship with the company, bankers, etc might help if valuation / bids are the same and they need a reason to select 1 fund vs another, but is it that big of a differentiator?

Yes - at megafunds, prop deals still happen, more often than you'd think. That said, the proprietary angle is just one of many things required for a deal to happen - more important is the ability to take a differentiated view. This is derived from many factors - industry knowledge, access to senior operators who can be relied on to drive values, synergies w portcos etc.

Relationship with bankers is the least important factor of all to be honest.

Jul 7, 2020 - 9:17pm
chaser, what's your opinion? Comment below:

I would agree with Tamara generally speaking - you are probably not expected to know the technical stuff inside out as analysts / associates would be though I think you should still come prepared nonetheless it's possible you will be interviewed by people up and down the rank (maybe not associates / analysts, but VPs upward) and some people could throw in a curve ball - not a modeling test, but perhaps a case. Not a huge focus for Principals (a bit more so for VPs) but you should give it some thought nonetheless.

The technical stuff people you'd want to see from you is understanding of docs (which you should know pretty well,) transaction process from a PE perspective and your experience in leading deal teams (PE setup is not very different from IBD's.) - this is equally important for VP and Principal roles.

Then on top of it is how you think about deals from an investment perspective, not just as a banker - when you look at a deal, what are the key thesis / risks, how would you look into them when you are in DD etc.) Maybe something from your past deals, maybe some idea that you have - I'd say this is fair game for everybody interviewing you and equally important for VP & Principals.

Finally - industry knowledge if you have any, relationships w/ senior management, owners, how do you go about sourcing, how do you build your edge / angle (similar to winning a mandate in banking, on the buy side, esp. in a process firms need to find an angles - in order to feel comfortable paying the extra turn of EBITDA that would get you the deal yet still allow to you reasonably think you can make your returns.) This is much more important for Principals than VPs.

I think the point about firm culture etc. is legitimate but very hard to pin down, both for you and the firm so it will be tested through multiple interactions, but I'd argue people don't expect you to come in knowing what they're like, how they operate. And unlike at the junior level where it is pretty much a one-way street, there is more mutual selling here where the firm would need to convince you as you need to convince them of a fit.

Jul 8, 2020 - 4:36pm
Luje, what's your opinion? Comment below:

Thanks all - this is **extremely **useful!

A few questions / follow-ups below:

1/ Any resource you would recommend reading in terms of general advice, PE interviews deals case studies, etc. ?

2/ I'm probably over simplifying but to me key edge re differentiated proprietary deal flow mainly comes from industry knowledge and relationships / network. Any view on other important skills or ressources in that context?

3/ @ tamara_s: I get the point on investment thesis but not sure to follow the ones on investment themes. What do you mean by that? Ideas for sectors (or sub-segments of given sectors) as a whole?

4/ @ chaser: what do you mean by "maybe some ideas that you have"? Do you mean pitching a company out there, not (currently) for sale and on which I haven't worked on the buy or sell-side?

Thanks again

Jul 12, 2020 - 6:04am
chaser, what's your opinion? Comment below:

Sorry for the late response. I hope this is still useful to you.

  1. Sorry I don't have anything to offer specifically. If you have any friend working on the buy side and are willing to share investment memos those would be the best sources to consider. Memos reflect funds' thought processes so they'd be the best materials you can have to familiarize with how funds construct thesis, identify risks and DD plan to deal with such risks.

Perhaps if you've worked with sponsors before, you could also look at past deals, both those that generated lots of interest and those that failed and considered them from those perspectives.

I'd think at the mid / upper level, interviews would be less theoretical, more real-life, including the cases.

  1. I'd say broadly speaking that's it. But as you probably know when you get into each aspect, there are a lot of nuances. Also I think it's worth pointing out that while highly valued, (good) proprietary deals are realitiscally very difficult to come by and people know that (good in terms of fit with funds & valuation etc.) Inevitably, especially at larger firms, you will participate in highly competitive auctions and the relationship / industry knowledge / operational expertise etc. are important because more often than not you need some or all of it to build enough conviction and bid to win.

  2. Yes - sort of like a pitch, something you can use to discuss during interviews, because naturally interviews would evolve around your experiences, transactions, ideas. I suppose an actionable idea is difficult to have... since, assuming you have it, perhaps it's your duty to bring it to your current employer first, which then makes sharing it difficult. More realistically, it would be something you worked on in the past (kind of related to 1)

Jul 14, 2020 - 11:25am
Southern Gent, what's your opinion? Comment below:

Also interested.

"Not me. Im in my prime"

Jul 14, 2020 - 6:04pm
Luje, what's your opinion? Comment below:

Yes it's for VP level (or Principal) How can I get in touch to get the resources you mention? Thanks a lot!

Jul 14, 2020 - 9:46pm
loanboy043, what's your opinion? Comment below:

what about your knowledge of credit agreement / legal docs, etc? what is your experience and skillset there?

Jul 15, 2020 - 3:28pm
Luje, what's your opinion? Comment below:

Very good point I think I'm pretty ok with equity-like agreement (SPAs, SHAs, etc.) - having been relatively actilvey involved in a number of negotations. But I guess it's always pretty different to sit as the investor vs the advisor, esp. financial advisor here On the other hand, I'm quite ignorant of credit doc - everything post term sheet has never really been a focus of mine

So if there's any recommendation / resource someone could suggest to help me (and potentially others) structure thoughts and learn a thing or two that would be extremely useful: key clauses to watch out for, standard / buyer / sell-friebdly terms, evolution of market practice over last few years, etc.

Jul 16, 2020 - 7:06am
European_PEMonkey, what's your opinion? Comment below:

Hi OP, I'm NOT (disclaimer) at your level but have frequently heard MDs / Partners comments on hiring profiles like yourself. Everyone above in this thread already raised the main "boxes" for what they look out for, but what I would add is the "senior executive presence" might have been overlooked.

It is really underestimated how much these MDs care about "senior presence" and "gravitas" because in your role, you would be managing investments at the board level and manage people who are in fact more senior than you (e.g. 50+ Year old CEO).

Management is often skeptical about "young PE talent" (to them

  • 4
Jul 16, 2020 - 12:25pm
Luje, what's your opinion? Comment below:

Thanks Then question becomes (esp. for MM) how to push for the fit by being nice / sort of fun etc while showing gravitas .. Tough balance to find

Jul 26, 2020 - 12:26pm
chess player, what's your opinion? Comment below:

out of interest, how did you manage to secure these interviews? Networking or HHs?


Aug 31, 2020 - 12:50pm
Luje, what's your opinion? Comment below:

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