Hello all, I have been meaning to get around to this for quite some time. I am a first year principal at a lower middle market private equity company based out of NYC. We take control / 100% equity investments in companies in a few different industries. I have previously worked in middle-market PE in other boutique shops and a couple of large banks like Goldman. I have also led recruiting processes, including a recent one where we hired a post-MBA Associate from a top business school. My education is: Wharton undergrad and Columbia B-school.
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Certainly the foundation is modeling and analytics - being able to relatively quickly and thoroughly model (or review and provide comments to an Associate) or put together an analysis and draw meaningful conclusions from them is something I still do regularly. I think this is still the #1 reason Senior Associates don't move on to VPs.
Other very important skills are being able to be a workhorse in terms of efficiency and productivity, be able to evaluate businesses and communicate the investment opportunity thesis concisely, and get very comfortable leading the evaluation and diligence of opportunities.
Soft skills are obviously incredibly important. I'd say one of the most important ones is able to confidently and professionally engage with management teams and bankers. As you go from VP to Principal, you will lead a lot of diligence calls, so being prepared and demonstrating knowledge of the company / dataroom is a must.
I'll take each of these questions seperately so people can reply to whichever one interests them.
Aspect of the job I like the most - engaging with management teams and operators. Have a great respect for those who have built their companies, even if they are flawed and have stagnated in growth because they are comfortable with their lifestyle. It's fun to learn how businesses really tick, and gives me pattern recognition to help our portcos or in other investment processes with how to improve or grow companies
Aspect of the job I hate the most - it can be very tough to see an investment almost immediately go south, whether that's not meeting your base case or issues develop that you didn't anticipate. I've been in situations where covenants get tripped or an equity injection is needed within 6 months post-close, which brings all your work and analysis into question, which is painful. In terms of more regular things I hate, it would probably be a very painful diligence analysis that needs thousands of rows of incomplete or inaccurate data. For instance, a payroll analysis to determine how much OT was paid can be a 12 hour exercise in futility if the data is garbage. Also it can be frustrating to have to negotiate things you thought were already negotiated, like an indemnity escrow