A Non-Target's Perspective - My MM PE Recruiting Process

ValueBanker14's picture
Rank: King Kong | 1,445

It's been several weeks now since I received my offer from a top MM PE firm. As several other users can attest to, the PE recruiting process can be an absolute grind. After having had some time to reflect on the entire process, I thought I'd share my experience in the hope that it might answer some questions or help some of the other users on this site. Just a quick disclaimer, I could expand on any part of the post below but I'll try to be as concise as possible and if anyone has any specific questions, I'd be happy to elaborate on any of the steps below.

1. Initial Outreach

With a year and a half of investment banking experience under me, I began to think about exit opportunities that would fit my interests. After doing some research (WSO's PE interview guide was extremely helpful here), I knew that the following factors were of utmost importance for me:

  • Middle-market experience - Lean deal teams, holistic experience and businesses with more room for professionalization and organic growth
  • Sector Focus - I had more of a preference for a generalist fund or at least a fund with a sector focus that differed from my current industry group in investment banking so that I could expand my skill set a little further
  • Location - This likely ties into the culture I prefer in the workplace but also brought me closer to friends and family

After establishing my preferences, I began reaching out to a select few MM PE associates that I had worked with on various transactions to get a better understanding for the job and their responsibilities. This was more of a final check to ensure that the things I had read about and researched were accurate representations of individuals who currently worked in the industry.

2. Preparation

I spent the months of November and December laying the foundations for my prep and broke it down into the following parts:

  1. Modeling - Paper LBOs, Quick LBOs and Full LBOs
  2. LBO Theory & Accounting Refresher - Focused on understanding the value drivers in a LBO and going over basic accounting concepts and more nuanced examples
  3. Deal Sheets - Detailed summaries of all my deals that I listed on my resume including transaction points, business characteristics, my opinion on the deal and my responsibilities during the deal process
  4. Resume Review - I spent a considerable amount of time honing my resume and was fortunate to have a few friends in PE who helped me hone it and considerably improve it
  5. Fund Outreach - I compiled a list of ~ 70 firms in my preferred locations and began mapping out ways I could speak to people there about their experiences and ultimately even interview there, if possible. I also began generally tracking news on these firms (fund raises, new investments, etc.)
  6. Headhunter Outreach - I began reaching out for initial conversations with HHs and tried to be as specific as possible with my interests
  7. GoBuyside Profile - I didn't end up using the site much but it was useful to have this set up so I had a general sense of when recruiting officially began and if any of my target firms had already given out offers

I'm happy to go into more specifics on any of the above points but in general, I would stay back after work (regardless if that was 11 pm or 2 am) and spend an hour or two building out models, reviewing my notecards and preparing outreach emails based on my target list of firms. The conversations I had with associates at my target firms allowed me to get a better picture of the firm, its goals and objectives and my potential experience there. This allowed me to tailor my answers during interviews and with other members of those firms.

3. Interviews

All in all, I interviewed at 10 firms and had 6 final round interviews (over the course of 3 months) that culminated in 1 offer from my #1 choice. I could dive into a lot of details here but here are a few of my thoughts from the overall interview experience:

  • Within each firm's process, the interview structure differed based on the culture, sector focus and fund size. Some firms preferred more behavioral-oriented phone interviews and more technical in-person interviews (quick case studies, in-person modeling tests) while others preferred quick technical questions in the first few interviews (LBO theory and Paper LBOs) and more behavioral in-person interviews coupled with a take-home case study of sorts
  • Don't underestimate the importance of being able to speak to your deals. I had several interviews where I was pressed on numerous facets of my deals and my opinions on the business (valuation, competitive strengths, broader industry outlook, transaction structure and risk assessment). Be prepared to expand upon your responsibilities in the process and how those shaped your thoughts on the overall deal/outcome
  • Ask good questions. Some topics and examples include - overall fund strategy and recent performance, a specific investment, broader PE industry outlook and background and rationale for making the move to PE (I reserve this one for associates)

4. Miscellaneous Thoughts

  • Approach initial headhunter conversations as though they are first-round interviews and try to be specific with your interests. I found that most headhunters were receptive to this approach as it allowed them to categorize you effectively and it made my search more efficient
  • Having the backing of my senior bankers was of tremendous help as it helped validate my work and responsibilities on my deals while getting my resume in the right hands early on in the recruiting process
  • After a few final round interviews and no offers, I found it extremely helpful to solicit feedback from individuals at those firms that I either knew or had connected well with during the interview process. This ultimately helped me hone my preparation for future interviews
  • When speaking to your deals, keep the introduction succinct and relevant. You want the interviewer to get a good sense for the business and the nature of the transaction and let him/her lead the interview with more pointed questions. I found that this helped make the interview more conversational and less burdensome for both sides
  • Make sure you practice your modelling on a single screen/laptop to simulate in-person tests. Similarly, your models don't have to be overly complex or elaborate. In crunch-time situations, it's about being effective, efficient and having a simple framework that gets you to the right solution in a logical manner
  • The PE interview process is designed to ultimately give the firm the candidate they are looking for (from a fit and technical expertise standpoint). Fit is crucial for a lot of PE firms and each firm has its nuances and distinct culture
  • There will be times when the process seems excruciatingly long and couple that with your regular work, it might seem downright impossible. It's crucial that during those times, you revert back to the prep habits you established earlier and remember that if you continue taking the right steps, things will fall into place eventually

This post is long enough as it stands so I'll end it here. As was the case during my IB search, this site was a tremendous resource to me during my PE recruiting process and so I want to open this post up to any questions people might have on my background, prep work, interview process and such.

Edit: Wanted to thank a few users that I've followed closely and that have offered me advice at various points in the past - @CompBanker, @State of Trance, @thebrofessor, "@Simple As..., @BlackHat, @labanker, @Marcus_Halberstram, @NorthSider, @Candor and many others. Appreciate all the help and the advice - wouldn't have made it this far without it.

Comments (40)

Aug 4, 2016

Congrats on the offer and this a great read for someone in my position at this moment.

Aug 4, 2016

Hope it was helpful!

Best Response
Aug 5, 2016

Congrats on the offer. While the above is great advice, I see no absolutely no mention of fit/social skills, which is just as important (if not more so) than technical skills when it comes to PE recruiting. This is a broad, sweeping generalization, but based on your post, I am going to assume that you are the typical overachiever focused solely on work and not personal relationships with those that you interact with on a daily basis. I am also going to assume that's why you only received 1 offer from the 10 firms that you interviewed with (good thing it was your number one choice). Most interviewers can see through the fake overachiever bs.

I'd advise anyone recruiting for a PE role to be reasonably proficient in discussing their respective deals and the technical aspects of finance in general, but above all, try to portray that you're someone that the investment team can get along with on a daily basis (i.e. grab a drink with after work). No one wants to work with some socially inept doucher. Let alone allow that individual to interact with management teams of a target company or an existing portfolio company.

Sorry if I'm off the mark. Don't mean to put you down individually. I'm only try to make the point that fit/personality is quite often overlooked.

    • 8
Aug 5, 2016

I agree with you - I didn't include this in my post due to length and the fact that I was sure someone would ask a question about it. In my experience, the interview process for any PE firm is designed in a way that it ultimately delivers them a person that is a fit for their firm. It's hard to put into words but each firm has its own culture and nuances that they look for in a candidate.

Aug 5, 2016
smplcty:

Congrats on the offer. While the above is great advice, I see no absolutely no mention of fit/social skills, which is just as important (if not more so) than technical skills when it comes to PE recruiting. This is a broad, sweeping generalization, but based on your post, I am going to assume that you are the typical overachiever focused solely on work and not personal relationships with those that you interact with on a daily basis. I am also going to assume that's why you only received 1 offer from the 10 firms that you interviewed with (good thing it was your number one choice). Most interviewers can see through the fake overachiever bs.

I'd advise anyone recruiting for a PE role to be reasonably proficient in discussing their respective deals and the technical aspects of finance in general, but above all, try to portray that you're someone that the investment team can get along with on a daily basis (i.e. grab a drink with after work). No one wants to work with some socially inept doucher. Let alone allow that individual to interact with management teams of a target company or an existing portfolio company.

Sorry if I'm off the mark. Don't mean to put you down individually. I'm only try to make the point that fit/personality is quite often overlooked.

I really cannot stress this enough. I'd argue fit/social aspect is even MORE important than your pure technical knowledge.

    • 1
Aug 5, 2016

Delete

Aug 5, 2016

Agreed. Just to paint a more complete picture, when I evaluated my profile and experience, it was clear to me that I had to step up on the technical front. That's why there was such a heavy emphasis on that in my preparation. That's also why I interviewed at a few firms that I knew wouldn't be good cultural fits for me because I had never answered technical/deal related questions in an interview setting before. Those first few interviews allowed me to get better at that while getting used to different PE interview styles (case studies, in-person modeling tests, lunch interviews, etc). As I probably should have stressed in my post above, each individual will find their own method of preparation and excelling during the process. For me, that meant using my social skills as a strength but continuing to get better on the technical front as much as I could.

Hopefully this color helps and hopefully, some of the information that comes out of such discussions will help someone else during their process!

    • 2
May 10, 2017

Maybe he's just not a hyper-critical nutjob, and took personality as granted, rather than - what did you want him to do? - give suggestions on how to change your personality for each firm?

Aug 5, 2016

thanks for the post, great info

WSO's COO (Chief Operating Orangutan) | My Linkedin

Aug 5, 2016

Happy to help in any way I can

    • 1
Aug 5, 2016

Great post and congratulations! +SB

Welcome to the buy side!

    • 2
Aug 5, 2016

Thanks!

Aug 5, 2016

Very helpful! What kind of bank did you start at? BB/EB/MM?

Aug 5, 2016

Thanks - I started at a MM bank.

    • 1
Aug 5, 2016

Do you have a template for deal sheet profiles? How did you make those? Thanks, and congrats.

    • 1
Aug 5, 2016

I just did them in excel so I could print them out and take them with me. I divided it into 3 parts - Business Summary (Description, Products, Suppliers, Customers, Industry Profile, Strengths, Weaknesses and Management), Financial Performance (Model Output, Credit Ratios, Performance During the Downturn, NWC, etc.) and Transaction/Process Highlights (My key responsibilities on the deal, rationale behind selling now, nature/type of process, ultimate outcome and my overall thoughts on the process - i.e., good or bad deal and if I'd do it).

For the Business Summary, I typically added data points that'd help me understand customer concentration, supplier concentration, product mix, historical and projected growth rates, etc.

To be clear, you don't have to remember all of this stuff exactly. It just helped me speak in round terms about the business and give them my opinions around the business with specific data points.

    • 6
Aug 25, 2016

This is amazing. Creating my own deal sheet as we speak. Thanks and congrats on your new role!

Aug 5, 2016

Fantastic overview - +SB.

Aug 5, 2016

Thanks!

    • 1
Aug 5, 2016

Why would anyone throw shit at this post?
Thanks for the write up and congratulations!

Aug 5, 2016

Appreciate it!

Aug 5, 2016

Congratulations! Seems the preparation paid off

    • 2
Aug 5, 2016

Your posts about breaking in were extremely helpful so thank you for doing that.

    • 1
Aug 5, 2016

Congrats ! I am glad I can be a part of your success. Hope my opinions about the past experience in the industry helped. GL. I am sure you will achieve whatever you set your mind too. Gave you a SB.

    • 2
Aug 5, 2016

Thanks man. Your advice has always been helpful - appreciate it.

Aug 10, 2016

Great post, thank you for discussing your take on the process. How did you go about getting the support of your MDs? Was it a case of explaining that you thought it was time to move on and asking for their backing, or did they realise you were looking to move on and were happy to help you in the process?

Aug 10, 2016

Thanks. I was a second year when I began recruiting and had worked closely with my senior bankers so when I decided to begin recruiting, I spoke to them and told them that for personal and professional reasons, I would likely look for a change after the completion of my third year. They were mostly appreciative that I gave them a heads-up and was honest.

That being said, the culture at my bank is a little different. I know that other banks might frown upon recruiting so my case might be an outlier.

I think as @CompBanker has mentioned in one of his posts, if your bank's culture is more open and you've done good work, senior bankers tend to be more open to the idea of you recruiting.

Aug 12, 2016

@ValueBanker14 since you said you came from a non-target school I'm curious to here if there was any problem with your academic background and going through PE recruiting? I have heard that some funds in HF and PE ask for SAT scores and I've noticed that many tout employee undergrad backgrounds and MBAs on their websites. I'm also from a non-target so I'm very interested in this aspect.

Aug 12, 2016

No problems with my academic background. To be honest, it didn't even come up. Most people were interested in hearing why I chose my non-target and how I ended up at my MM. After that, they were squarely focused on deal-related questions, gauging my social skills/fit within the firm and asking a few technical questions.

To be fair though, I got most of my interviews through referrals and recommendations (from my bankers and/or people I networked with) so that probably eased concerns about my profile as well. Let me know if that doesn't make sense and I'd be happy to clarify.

    • 1
Aug 19, 2016

I'm curious as to what you thoughts would be on an interview process I had almost a year ago with a good MM PE shop for a credit analyst position. I have a non-traditional background (JD, MBA-fin, no IB analyst years) but had spent the past 1.5-2 years doing pretty in depth reviews/modeling research on their exact product types and have some decent connections in the industry. The job offer was for SF, and I am a NYCer, but with GF's family based in SF, I thought I had a believable excuse for why I would move out there. Made it through three rounds of phone interviews, to a super-day, was told heading in by the recruiter it was down to one girl and me from an initial batch of 6. MD seemed to like me as did the senior people, many of the associates. The response back from the recruiter was: "not a good cultural fit". They oddly enough didn't present me with a case study to test my modeling capabilities during the entire process.

After reflecting on it, I still can't pinpoint the source of where I faltered.

Possible negatives in the process:

I think I messed up the initial technical phone interview with an associate, as I had assumed a certain tax rate given the product and not a standard 35%. However, I explained that to him and thought if it was that big of a ding, I probably shouldn't have made it through to the next round.

The last interview of the super day was an analyst who had an English literature undergrad. She asked me what the last thing I had read was, and I answered (truthfully) "Marcus Aurelius' Meditations." When she prodded further on the book and a description of stoic philosophy, she said: "that sounds morbid." I told her while I can see how the Stoics can come off that way, it's more about overcoming obstacles. She didn't seem to get it

3) the job post said, "analyst will be required to stay in the position for two years." I asked the recruiter if that was hard and fast or if I perform competently enough if there was a chance for that period to be shorter. He urged me to send the VP the question. I tried to make it clear I'd be okay either way. VP responded it was hard and fast, and I thanked her again for her time.

With all that in mind, are there obvious points where I slipped up or was it in fact just an issue of "fit"?

PS Thanks for this guide, I think it can really help a lot of people.

    • 3
Aug 26, 2016

I'm honestly not in a position to answer that but I will say that fit is important to PE firms and while in some cases, it might not be the true reason behind a ding, it definitely does happen. One of the analysts I know interviewed at a firm recently where he received feedback saying that he wouldn't advance to the next round due to fit. He called one of his contacts at the firm and the contact verified that the interviewers felt he had the intellectual horsepower to do the work but didn't come off as overly personable in the interview.

Just one anecdote but still interesting in my opinion.

Aug 23, 2016

Thanks for the great post and congrats on the offer!

I have a quick question. I have a 3.1 GPA from a top 5 school and am working in a good group at a mid-tier bulge bracket. I only have a 2180 SAT score. Do you have any advice on how I can mitigate the effect of my gpa? Should I take the GMAT or another exam? Thank you so much.

Aug 26, 2016
MD15:

Thanks for the great post and congrats on the offer!

I have a quick question. I have a 3.1 GPA from a top 5 school and am working in a good group at a mid-tier bulge bracket. I only have a 2180 SAT score. Do you have any advice on how I can mitigate the effect of my gpa? Should I take the GMAT or another exam? Thank you so much.

Don't put it on your resume. I mean, you did go to a top 5 school and work for a good group at a mid-tier bulge bracket.

Aug 26, 2016

Agreed with above.

Sep 26, 2016

Thanks. Most head hunting firms ask for you GPA though. How should I work around this?

Aug 29, 2016

How did you prepare the technical parts? I had several interviews where I think I failed the technical parts despite having prepared quite a bit for it. What do you think is the best resource here?

Thanks!

Feb 23, 2018
Comment
Feb 23, 2018