"What industries should we invest in?" - PE interview question
By way of background, I've been working at as an analyst at a generalist "no name" IB for a couple years and have started to get serious about either moving on upstream to a bigger IB or to LMM PE.
Obviously going to a different (better) IB would be "easier" but I am getting some traction in my PE recruiting through referrals and relationships. I'm still not likely to have a lot of PE opportunities so I want to make the most of it.
The question "what industries should we invest in?" / "what industries would you invest in?" I'm not quite sure what a good answer is. Seems like a "no real wrong answer" as long as you back it up.
I got the question once and answered based on some experience I had working with a couple companies in the space I knew a decent bit on (industrial subsector) and mentioned working with those companies but wondering if there is a better framework to think about answering this.
I know this question may seem straightforward but after 2 years of doing sell-side IB work at a generalist firm, researching different industries for pitches and CIMs, most industries are growing and would be a great investment! (/sarcasm)
In LMM PE it's wherever you have the ability to add the most value and can get the best deal flow. Paying low multiples is the biggest indicator of a deal being successful or not (Kauffman foundation report). It's all about creating a huge moat to protect your equity in the deal.
Dude everybody knows WeWork is where the money's at
Pretty much this
Technostate
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