Advice - 2013 Pre-MBA PE Associate Recruiting

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no homo - Certified Professional
Rank: Orangutan | banana points 298


Looking for some advice on the 2013 pre-MBA PE recruitment process. Before I get started, background is:

- semi-target private university (think Rice/ND/Vanderbilt/Emory)
- top-bucket analyst (our bank caps the # of people they can award this at 10% of global analysts and groups 1st, 2nd and 3rd years together) in product group at lower-tier BB bank in NY (i.e. my bank is on this list:
- male / over-represented minority

Entered banking pretty gung-ho on large-cap PE (I know... I should have went to Harvard/GS). Knew it was the area of finance I wanted to be involved with as early as high school through industry research, a family friend/mentor, etc. Let the recruiters know this when I met with them in late-2011/early-2012 and kept up with them, gave them the ranking update, and sent updated resumes here and there as well. I'd rate my initial meetings with these firms a 6.5/10 (didn't do myself any significant favors, probably said what most kids say, etc.).

For lack of a better word, I've "held out" till now, keeping my head down at work and taking the occasional interview at upper-middle market firms (i.e. turned down the majority if not all of ">PE in my update emails). Made it to the 3rd round at the one mega-cap opportunity put on my plate mid-summer w/o receiving an offer.

That brings me to now. It doesn't take an extremely well-connected person to know most large-cap firms have held networking sessions and such both before Christmas and over the past week (with the last few firms finishing those up this week). Consensus is that interviews are very imminent, and most places - historically at least - finish their processes over the course of 1-3 days max.

My problem (and I'd consider it a pretty big one) is that I've had ZERO interaction with the prominent recruiting firms on these opportunities over the past several weeks. Where I'd like the forum's advice is how I might be able to execute a last-gasp effort that at least gives me a shot at 2-3 places (i.e. I'm at the 20 and am trying to get to midfield to throw a Hail Mary but my level of contact with the recruiting firms on these opportunities is as pitiful as RGIII's knee after it buckled for the last time this Sunday).

With banking it's a pretty easy numbers game to me. Only so many people care enough to reach out to bankers at firms, and there's a precedent that says that if you get on folks' radar/have a good GPA/have good interest you will get a look. After that it's just up to you to convert on one of your interviews.

With PE everything just feels so much more intricate. You can reach out to firms directly, but the jr. and lower mid-tier folks don't really have much more influence than the recruiting firms who are paid to bring in a predetermined mix of "the right candidates" and have an established reputation for doing so. You can go up to the sr. level, but then you're crossing swords with MDs at your bank who spend their entire lives trying to make money from those folks/manage those relationships intricately. You can have your MDs reach out to the sr. level guys to recommend you (which mine would do if I pushed them), but I'm unfortunately faced with the challenge of the new analyst paradigm where my group head, etc. want me to stay given my rank; they've also told me explicitly that they don't want to "give me away" and lose their investment in me. The decision I feel like I'm left with on that front is to either ask them to pull out all the stops and help (in which case my employment would terminate at the end of my 2nd year, whether or not I find something) or go it alone. The former effectively pits the small chance of me landing something vs. unemployment should I not land something, which is not a great place to be.

What should I do? Help much appreciated. Thanks all.

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Comments (8)

Jan 8, 2013

I'd say your chances of snagging an interview with one of these places is pretty close to zero. Interviews start up real soon, they all already know which people they're bringing in for 1st rounds, and they're probably going to finish their hiring really quickly as you mentioned.

The way I see it, here are your options:

1. Call one of the headhunters that run the process for whatever firms you're interested in. Introduce yourself, give your spiel, and sell yourself to them so they can try to hook you up. I think it may be too late even if they wanted to throw you into the ring now as the firms already have their 1st wave picked out (though if there's a 2nd wave, you could get in there if the headhunter pushes for you hard).

2. Talk to your bosses. Again, I think it's too late for the 1st wave (unless they're BFFs with a partner and really push for you) and they may take a look at you for the 2nd wave if there is one. Downside here is obviously effing yourself over at your job by showing you want to leave.

Don't really see any real alternatives to the above to get in with mega funds in the 1st wave. You could also expand your net beyond these firms if you really want to get to the buy-side.


Jan 9, 2013

What product group? (i.e. M&A/LevFin or capital markets). You're a top bucket analyst from a decent school at a BB. I'm confused why you haven't been getting more are you defining large cap?

Jan 9, 2013

What product group? (i.e. M&A/LevFin or capital markets). You're a top bucket analyst from a decent school at a BB. I'm confused why you haven't been getting more are you defining large cap?


Defining large cap as:

TPG, WP, KKR, Carlyle, Silver Lake, H&F, Bain, BX, GA, Apollo, Providence, THL, MDP, Lindsay Goldberg, Apax, CD&R, GS PIA, Advent, Cerberus, First Reserve

I mean, I get the math here. I listed 20 firms and if you're talking 5-7 hires at each it's 100-140 spots total. The analyst classes at GS/MS/BX alone get you to roughly double that number. Throw in product/good industry groups at JPM and the better half of LAZ/EVR/MoCo and you're now at ~3-4x the number of spots available. Add in everything that fits into my tier (product group analysts/Ivy grads at BAML/Citi/CS/DB/BarCap/UBS) and you're past 5x (and it's not that unfathomable to think that >20% of analysts would voice interest in the above firms, which effectively puts me on the bubble at best).

I get that I can expand my search more broadly... you take the next 100 firms, get rid of the ~1/2 that are either more growth/venture-focused or highly specialized and give 3-4 spots at each and now you've got an additional 150-200 spots (firms in the American Securities, Ares, Court Square, Crestview, Kohlberg & Co., etc. tier). I've had OK but not great traction at this level... talking ~6 interviews at the lower tier of this group (cut early in process at 1/3, cut in middle of process at 1/3 and cut very late in process at 1/3). Of these ~6 interviews, I'd say 1/3 were through recruiting firms and 2/3 were through other avenues. I've not received any looks from HSP, Amity, CPI or McKibben.

I can go even further beyond that in terms of tier, but I start to question whether I'd be better off doing something else.

Appreciate the responses, though. Only follow-up I had to the first response is how to best pester/actually get what I want at this stage from the recruiters. I get that there's not much to lose with them given the number of looks they've given me, but I want to come across as professional and give myself the capability to leverage them in the future.

Jan 9, 2013

I would say you need to broaden your search and ask to get looks for MM firms if you want to make it to PE. I'm not sure why you're caught up only the large funds (btw, as you probably already know, the supposed "tier" involving Court Square, Kohlberg, Ares is still very top tier and has many top bucket, GS/MS/JPM Analysts you're competing with)- there are hundreds of great funds (MM/special situations/credit/industry focus/etc.) generating top quartile, second quartile performance, in which partners are raking in money and associates learning a great deal and getting paid much more. The point being, there are still a number of funds recruiting for 2013 and I would say take whatever you can get and be aggressive. I don't know why you passed on those other funds initially because at worst, you get more interview practice which most banking analysts sorely need, and at best, you get an offer and you decline politely if that's not what you want...

Jan 9, 2013

OK that's helpful advice as well.

Can definitely broaden the search a bit; can't do anything but that at this stage in the game. What are ways you would evaluate firms that are "generating top quartile, second quartile performance, in which partners are raking in money and associates learning a great deal and getting paid much more"?

Broadly speaking, if it helps provide further background for my request for help, the reason I think I entered the process most focused on the larger firms is three-fold:

- the first, which I think is completely legitimate, is that in an environment with significant amounts of capital to be deployed and more focused on smaller-sized transactions larger firms have a scale advantage that affords junior folks the most transaction experience
- the second, which is slightly more arguable, is that larger firms offer junior folks more deal structuring experience - especially on the debt side; smaller guys are seldom going to leave the leveraged loan/mezzanine/seller equity market and get into high yield stuff nor can they influence (in Apollo's case coerce) leveraged loan/high yield markets in the way larger sponsors can to generate return opportunities [just think this sort of thing broadens the learning experience as well as the range of post-MBA opportunities]
- the third, more subtle reason which I think everyone can relate to is inherent to the very cycle; prestige begets prestige. Know debates on this one can go on and on for the rest of time, but I think it's fair to say it factors into my level of interest

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Jan 9, 2013

Top quartile, second quartile performance meaning how LPs grade private equity performance. If you have preqin or Pitchbook, this can be easily had. If not, just search the fund name and "IRR" or "quartile" to see if you get any hits on public pension funds reporting their positions in private equity funds. This will give you an idea of a fund's performance. Of course, it should obviously be one of the questions you ask your interviewers. You should also see if there is any press around the firm raising a new fund. The ability to raise a new fund every 4-5 years is a key determinant of performance as well.

Now, onto your other reasons. What is scale advantage? If you're talking about ability to pay, that's not a very smart way to look at it because if you're paying more because you can, higher chance of overpaying and being a bad investment. In terms of deal experience, it's a mixed bag and varies between fund and staffing level of junior personnel. There are associates at MM funds who are absolutely getting crushed right now because MM M&A activity continues to be strong. So bigger does not always mean better deal experience.

On your second point, I may agree because larger deals inherently require more complex capital markets support and it is additional experience. But at the end of the day, it's still an LBO whether it's MM or big. Structuring some form of equity + debt. You just work with different players, like using a GE Capital/Newstar versus JPM/Goldman for your leverage reads.

Hope this helps.

Jan 9, 2013

Wouldn't sacrifice your relationship with the senior members of your team for interviews that in my opinion are too late to get. Few options:
1. Can you stay a third year? Maybe do that and give yourself extra time to recruit with more MMs and network your way into interviews with megafunds next year
2. Lateral to GS/MS/JPM or an elite boutique (Evercore / Lazard / Moelis / Greenhill) and do a third year and recruit from there
3. Take every interview you can from now on, even with some of the smaller funds - solid lower MM firms and higher should be given consideration if PE is actually something you want to do

I'd also get rid of this notion of "prestige begets prestige" - honestly youre past the college phase of people going goo-goo-gah-gah whenever they hear the words "Morgan Stanley" or "Goldman Sachs" or something, its time to actually evaluate what you want to do and push for it regardless of company name (especially for PE where fund size is barely related to fund performance these days)

Jan 10, 2013