Bio:
* Currently an Associate at a sector-specific European mid-market fund * Previously an Analyst at a smaller boutique * Started out at a "global" investment bank * Undergrad from a continental European uni and post-grad from a business school in London
Ask me anything:
* Hope to provide some insight into getting a job in London, especially coming from outside London/ UK * Otherwise open to answering any other questions you might have!
WSO Mentors
Do you want a 1 on 1 mentoring session with me? Here's my mentor profile - click here.
WSO Podcast: Member @Escobar Houdini"
For the podcast, I talk about my journey from Germany to a London BB and then to a London private equity fund and a whole lot more. Hope you enjoy (listen below).
I think across the different stages of PE recruitment, the following points are key:
1) reaching out to the right headhunters with a super polished CV, particularly focused on deal experience
2) (good) headhunters will be the first to talk hiring managers through your profile - make sure they know your motivation for the buy side and make sure it is authentic
3) in my experience, 1st rounds will be mainly focused on your motivation and background. The candidate that stands out will have a clear story to tell, a) why PE, b) why that specific fund. Have this locked down. And did I mention - be authentic.
4) there should be no questions around your technical skills... ever.
You'll see the occasional VP coming across, but I think it's pretty rare. Same for higher level guys. They're often tied down with clawbacks, options, etc., so there has to be a pretty good reason to jump ship. Also, advisory is inherently different to investing, so the longer you're working in one, the less employable you become to the other.
How much do grades matter in PE recruiting? ie would not having a first from a target university hurt my chances as a student going to a BB for FT?
Some banks will use grades to filter candidates (e.g. JPM) others won't (e.g. GS). In PE recruiting they rarely matter, unless it's for an Analyst or Intern role. To me, grades mean very little. It's not a comparable framework, as grades will depend on your ability to answer questions with a predetermined answer...
Headhunters will go by the job spec they've been given. I've heard of some funds using university and even high school grades as a filter, but that is the rare exception. If that is the case for a specific role, the headhunter will ask you upfront. There is normally no way that you can offset low grades with anything, e.g. GMAT, uni you went to, time you took to graduate, etc. Personally, I find that worse than grades, your GMAT score is a measure of how well you can prepare for something, which to me renders it utterly useless when I'm trying to understand if you can do the job (completely my personal opinion, no scientific/ empirical evidence). If you asked me to rank bits of your CV by relevance, I'd say: Deal experience > reputation of current employer > reputation of uni > grades There is obviously some degree to which each part can be offset by another, but there is a limit. For example, top notch deal experience from a lesser known house will beat pitch book writing for a BB. Coming from an EB, will offset not going to Oxbridge, etc. A 2:2 from LSE is better than a first from some random uni. However, I don't think it goes both ways. Outstanding grades from an unknown uni won't help much. Going to a top tier uni and then a completely unknown shop doesn't help. Writing pitch books for an EB doesn't beat doing deals at a lower ranked shop. Obviously, this is my personal opinion.
tl;dr response: No sector specialist fund without being a sector specialist. You'll pitch yourself as a specialist and are invited to processes because of that. You will/ should need little or no advisors. Little or no synergies among portcos. Industry knowledge built is vastly greater at a specialist fund as you're expected to grow into a sector expert fairly quickly (probably 2-3 years). Full response: I would say most sector specific funds will be borne out of inherent knowledge of that sector, be it seasoned bankers, someone with an entrepreneurial or operational background, or someone who ran a sector team at a larger fund starting out on their own, etc. In my view, for any fund to focus on a single sector, there has to be intrinsic sector knowledge before you even begin to fundraise - otherwise, what's your value-add? When it comes to management and sellers' meetings, you will engage with them on a completely different level compared to a sector agnostic fund. Your pitch to the seller is based on your ability to support and help drive growth with knowledge and expertise/ experience, rather than writing a cheque. The sellers' field is very much split into these two sides: companies looking for funding and companies looking for a team of experts to help drive growth. There is some degree of reliance on advisors, for example when entering a new geography or sub-sector, but this is mostly focused on expert calls and perhaps CDD. In most cases, you'll only need FDD and LDD, as you already have deep knowledge of the sector and the geography you're looking to invest in. In my sector, almost all of the handful of sector specific funds will look at all same assets coming to market, regardless of size. You'll often see a larger fund team up with a sector specialist if it's a larger deal and the specialists going alone on smaller tickets. Synergies between portfolio companies are extremely rare in my view and will mostly be client introductions and cross-selling. But in my experience, cross-selling between two companies within one group is already pretty difficult to achieve, let alone between two independent companies. I can see how the specific sector knowledge built over time at a generalist fund is very little. Think about it like this: I will look at c. 20-30 deals a year in my sector, 5-8 of which in thorough detail, developing a strong knowledge base of the sub-sectors that I can build on through each deal. Assuming at a generalist fund you will look at the same number of deals, but only 1-2 in each sector in thorough detail, it'll take you some 5 years or so to develop the same level of knowledge a sector specialist acquired in 1 year… not to mention that there is an exponential learning curve involved…