Starting in PE Soon - How to Prepare?

To hit the ground running in your new PE role, especially at a family office without a formal training program, here’s what you can focus on:

1. Sharpen Your LBO Modeling Skills

• Practice building LBO models under time constraints. Aim to complete a quick-form LBO in 45 minutes or less.
• Review more complex sponsor LBO models to understand nuances like management rollovers, earnouts, and detailed debt schedules.
• Use old case studies or practice tests circulating in the industry to simulate real-world scenarios.

2. Master Core Financial Concepts

• Revisit corporate finance fundamentals and ensure you can confidently explain them to someone with no finance background. This will help solidify your understanding.
• Focus on DCF, M&A, and Comps modeling, as these are often integral to PE deal analysis.

3. Leverage WSO Resources

• Consider enrolling in the Private Equity Interview Bootcamp or the Private Equity Master Package. These include detailed LBO tests, case studies, and insights into the PE deal process.
• Explore the Modeling & Valuation Bootcamp for a refresher on Excel, M&A, and financial statement modeling.

4. Simulate Real-World Pressure

• Practice modeling in full business attire to mimic the pressure of real deal situations. It may sound odd, but it helps prepare for high-stakes environments.

5. Understand the Family Office Dynamics

• Research how family offices differ from traditional PE shops. Family offices often have unique investment strategies, longer time horizons, and may prioritize wealth preservation over aggressive returns.
• Be prepared for potentially less structured deal flow and the need to take initiative in sourcing and analyzing opportunities.

6. Build a Network of Mentors

• Connect with peers or mentors in the industry who can guide you. As PE is an apprenticeship-based business, having a support system is invaluable.

7. Stay Curious and Proactive

• Read up on recent deals, market trends, and industry news to stay informed.
• Familiarize yourself with the sectors or asset classes your family office focuses on.

By focusing on these areas, you’ll not only bridge any skill gaps but also position yourself as a proactive and resourceful team member from day one. Good luck!

Sources: Q&A: VP in Private Equity (Growth Equity + LBO)...Post-MBA...Formerly IB Analyst, Family Office vs. Traditional LP Career Path, Family Office Private Equity, Q&A: Associate at MM Private Equity fund, Q&A: 3rd Year PE Associate ($10bn+ AUM, MBO/LBO, equity, mezz, distressed debt)