Q&A: Associate at MM Private Equity fund

Hey WSO, I'm a first-time poster and longtime reader. I have some downtime on account of MLK Jr. Day and wanted to take the time to give back to the community and provide some insight on my career decisions I've made along the way.

  • Non-target LAC (e.g. Little Ivies)
  • Interned at BB in Operations
  • Everything since has been the result of a ton of hustle and preparation (and luck), not to mention friends and mentors who have spent countless hours advising and pushing me forward
  • Started my career in asset management and pivoted to investment banking / corporate M&A. Currently an associate at a $4B middle-market fund.

Q&A

I'm happy to answer any questions about my experience: breaking in with a non-target / non-traditional background, the recruiting process (IB / PE), on-the-job advice, and reasons for switching careers, as well as anything else I might have forgotten. Fire away!

 

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Comments (54)

 
  • Analyst 1 in IB - Restr
Jan 18, 2021 - 2:11pm

What have your hours been like in PE both on average and during deal sprints? How common would you say those deal sprint weeks are throughout the year?

 
Most Helpful
  • Associate 1 in PE - LBOs
Jan 18, 2021 - 2:37pm

This year has been "off" for a number of reasons (COVID, WFH, increased deal volume in Q2-Q4) but generally, I'd say that sprints have been 14-16 hour days (slightly better than the 9 am - 2 am sprints from IB). Once we're past the initial IC meeting and have done the lion's share of our work (analysis, DD, etc.) the workload is more confirmatory (tying up loose ends raised in IC) and/or administrative in nature (legal, funding, etc.). That's when the workload drops down to a more reasonable 10-12 hr/day pace (60-hour week). To your questions about "common", we're in the business of doing deals and in a market where capital is cheap and plentiful, speed to close is often a differentiator. We are ultimately beholden to the seller's timeline. Other monkeys feel free to jump in, but generally, I've felt that late summer and December / the New Year have been a bit quieter vs. the rest of the year.    

 
Feb 12, 2021 - 4:09am

Having worked in PE through 2020, you bring up a great point. The speed to close expectation only increased when people realized working from home was actually very efficient and having depressed valuations ended up making processes crowded and highly competitive.

 
  • Analyst 1 in IB - Ind
Jan 18, 2021 - 3:13pm

Any advice on how to do well in IB without killing yourself? Hit 115 & 96 the last 2 weeks and don't want to do it again. Any advice on pe recruiting? How did you know you'd like PE?

 
  • Associate 1 in PE - LBOs
Jan 18, 2021 - 6:33pm

Advice on doing well in IB: I found a combination of working smarter and not harder and also knowing when to sprint. Working smarter for me meant making sure I was on the same page as my mid-level when working on decks or models. Take the time to make sure you've laid out the decks and know exactly which analyses you need (and the questions you're trying to answer w.r.t. your analysis). On knowing when to sprint, personally, I knew that I could only do a 9 - 2 am stint 3-4 days in a row before I was falling asleep standing up. Any more than that and I was useless. Communicating this to my mid-level was key and allowed me to catch up on sleep and still hit our deliverables. People are much more reasonable and understanding if you communicate and spend time building rapport. Long hours are definitely the norm in PE, marginally better yes, but it's not a huge difference. The trade-off for me was that I feel more ownership, not to mention financial alignment to my deals in PE.

Advice on PE recruiting: (1) Find a good group of friends that you can study with. This industry is still very much an apprenticeship-based business and so much information is passed along from person-to-person. (2) Practice, practice, practice. Practice walking through interview questions on corporate finance and LBOs. I would answer questions and explain them to my mom (non-finance) and make sure that she could understand the concepts. Practice your modeling and time yourself. You should be able to put together a quick form LBO in 45 minutes or less. Take practice tests and time yourself (there are always old case studies circling the Street). Practice in full business attire (you'd be surprised how much pressure a crisp tie adds when you're building a model under test-like conditions). (3) HHs. Be nice to them. They can be a little arrogant and mean but it's par for the course. Just keep smiling and be polite for they hold the keys to the kingdom (for now). Work to establish a relationship with them early and do your best to come across as confident and competent but humble enough to be coachable. (4) Network. There seem to always be spots for analysts at PE firms based on alma mater or banking group. Reach out to your respective networks (i.e. the associate at the firm) to see if you can align yourself appropriately.

How to know if I'd like PE: I didn't! There's always a risk trying something new. You can theorize and postulate until the cows come home but you're never going to know until you do it. I spent time in asset management and moved to IB. I spent countless hours chatting with professionals in the industry and formed my hypothesis that PE would be my next step over a few years. Eventually, you just have to do it Hope that helps! 

 
Jan 18, 2021 - 6:26pm

How do you get these "mentors"? Are these family/friends of yours? Did you reach out on LinkedIn? I just feel like in finance, most people are either too busy to help or too preoccupied with climbing the ladder themselves to offer help to the little guys.

 
  • Associate 1 in PE - LBOs
Jan 18, 2021 - 6:48pm

I've always managed to connect well with older folks (I'm a bit of an old soul myself). My mentors have been people that I've worked for or are friends/friends of friends. I think I also naturally connect with older individuals and have more or less made them my mentors because I value their opinion and experience. In this way, they have become my own little board of directors that I consult whenever I need advice about potential moves or situations where I need their advice, etc. I didn't grow up with well-connected parents on account of being a military family and living in a "flyover state" so it was crucial that I build my network quickly but in an authentic way. For me, this was going through my alumni network and working from there.

While I personally try to respond to every Linkedin message to offer advice and guidance, I've never used it to reach out to people as I prefer a warm introduction or something face to face. If you really want to reach out to someone, you have to realize it's a game of numbers. Some quick tips on cold emails are to briefly introduce yourself (brief bio, what you do, and where you want to go) and be flexible when you suggest times to connect. When people make it easy for me to talk to them, I'm much quicker to respond. Hope that helps!

 
  • Analyst 3+ in IB-M&A
Jan 18, 2021 - 6:57pm

What sort of questions did you encounter / should I expect for a MM fund first round interview? I have one coming up and would be great to hear what you ask / were asked.

 

Thx in advance

 
  • Associate 1 in PE - LBOs
Jan 18, 2021 - 9:24pm

First rounds are a mix of behavioral and technical, not unlike IB interviews. On the behavioral, think about why PE and how aspects of IB will transfer over to being an investor. For instance, now that you're on the buyside, how will you pivot from making CIMs to now picking them apart for relevant information needed to make an investment decision? I've found that there are a lot of bankers who can model well and put together decks but they are less prepared to think about being an investor, managing risk, and asking the right kinds of questions as they diligence an opportunity. On the technicals, you should be prepared to do a paper LBO cold and answer questions about it (how would the IRR. or MOIC change if you do a dividend recap, explain the advantage of a company with operating leverage, walk me through how you can have a successful investment in a cyclical company with no multiple expansion (i.e. expand EBITDA and paydown debt)), etc.. If you can do all of these, you're in good shape. You don't have to know everything but if you can get 85% of the way there and show that you can be coached and learn quickly, I would think that matters most in an interviewer's eyes. Good luck! 

 
  • Associate 1 in IB - Ind
Jan 18, 2021 - 6:58pm

Given that you had two jobs before going to PE, I'm assuming you didn't do PE recruiting at the most opportune 2nd/3rd year analyst timeframe. What level were you at in IB when you did go to PE and what would you say in regards to exit opportunities later in IB tenure? How did you find your current role and what was your strategy in hunting PE roles?

 
  • Associate 1 in PE - LBOs
Jan 18, 2021 - 7:50pm

Correct. I honestly wasn't ready to recruit for PE at that time. Coming from a LAC and from AM prior to banking was a steep learning curve. I needed more reps to feel confident in my abilities. I was also aware that coming from a non-traditional background meant that I would need to spend the time to make sure I was solid and knew my technicals and modeling etc. backward and forwards. Once I got over the FOMO and the 2+2+2 mindset, I felt much better about my path and being a bit older than typical associates in PE. When I moved over to PE, I had to start out at the bottom so any gains in title/rank that I had made before were wiped out. This was well-understood prior to me accepting my role so it wasn't a surprise. I've had a few buddies who went A2A and then moved over to PE and all of them had to start out as first-year associates as well - gotta earn your stripes.

I found my current role through a HH. Even if I've made connections with folks at different firms, you still have to go through the HHs. I will note that originally this HH was a bit rude to me in the past. As aforementioned in my response above, it always pays to be nice and polite because you never know when they might come around with your next opportunity.

Strategy-wise I wasn't impressed or caught up with the perceived prestige or size of the fund. I was focused on finding either (1) a generalist opportunity, thinking it would help me later narrow down which sub-sector I wanted to focus on or (2) industry focused-funds (i.e. technology or healthcare) that had plenty of room for me to carve out a niche. Most importantly, I was focused on the team. I wanted a small team where I would get plenty of reps and feel that I was getting a strong experience.

 
  • Prospect in S&T - Other
Jan 18, 2021 - 7:22pm

How did you lateral from AM to IB? Do you think i this is also possible from S&T. Really enjoy trading but want to understand my options. Thanks in advance!

 
  • Associate 1 in PE - LBOs
Jan 18, 2021 - 9:12pm

The short of it was I studied my ass off, made as many connections I could via my college network and cold calls, and convinced someone on the other side that I was worth giving a shot. The preparation was an arduous process. Again, coming from a LAC background and studying primarily AM concepts meant that I had to teach myself accounting and corporate finance. #notanad but I used the Wall Street Prep material to give myself a crash course on all of these subjects. I also utilized the IBankingFAQ website and compiled a study guide of ~70 or so technical and behavioral questions that I thought would come up in an interview. I probably spent 4-5 months prepping in the hopes of landing an interview. If I could do it all over again, I would study a little bit often as opposed to spending Friday night/weekends studying because you'll retain the information better. There are plenty of people from non-traditional backgrounds or schools that can break into banking - that extends to S&T folks. It all depends on how much you want it and that perfect moment where preparation and skill meet luck. Good luck!

 
  • Analyst 3+ in IB - Gen
Feb 11, 2021 - 3:55pm

Piggy backing here if I may, As someone who made this jump as well and is now at a BB, completely concur w/ OP. I started out in S&T and quickly realized it wasn't for me, spent around 5 months studying the BIWS 400 and practicing. Stick to your tried and true learning techniques from college - for me, that's flashcards. I had a stack of 2-300 that I would shuffle through for an hour or so everyday until I knew everything cold. Once you get comfortable enough around your story and knowing the technicals, time to pound the pavement and talk to absolutely everyone that you can. Informational calls with family friends and older alums, even at firms that weren't hiring, were the most useful for me. I asked some good questions about why THEY went into IB, and if they pivoted from something else like I was trying to, I asked how they did it, and how they told their story. I took rigorous notes on their thoughts, and cherrypicked ideas, phrases, stories I liked the most and molded them into my own story. It's a terrible, shitty process (didn't help that i had a 3.2 GPA) -  I applied to hundreds of jobs and got dinged at places that I look back and laugh at now. It's a true numbers game, you just have to keep with it. Another thing that is less often talked about in the S&T->IBD switch is taking a cap markets roll in between. ECM is a hybrid between S&T and IBD, I ultimately took this route and after 1.5yrs had an easy switch into IBD. Keep with it, and good luck! 

 
  • Associate 1 in PE - LBOs
Jan 18, 2021 - 9:15pm

See my response above. I'd say that if you want to go into Corp Dev it's much easier to do so if you have previous investment banking experience. A few folks I know who worked on a strategy/dev team had trouble getting reps on the dev deals. For FP&A I don't think you need banking experience to do that. It helps, sure, but I would think your skill set would be more valuable (read lucrative) elsewhere.

 
Jan 18, 2021 - 10:42pm

Hi. Thank you for these insightful responses as I am deeply enjoying reading this thread. I recently turned 24 years old and have no experience in finance and just began reading WSO again. I went to a non-target school and was pursing a high-finance role when, halfway through my freshman year of college, I decided to commit 100% to my dream: Being a major league baseball player.

I was recruited at young age in high school to this top Division I program where I played on multiple championship teams, performed in front of thousands of fans, set school records, and eventually was drafted by Pittsburgh as a junior. My work ethic by far is the characteristic that propelled me past my peers and into the highest level of my sport there is. I left school as a junior (graduated on time, Magna-Cum Laude, BA Finance) to pursue my dream in the cutthroat and unforgiving world of professional baseball.

Initially, I was sent to the hectic environment of the minor leagues where I truly became obsessed with the grind. I worked my way up the ranks, moved across the country to train in the offseason, and truthfully learned how to perform to the best of my abilities. Eventually, I was released by Pittsburgh and was setting up to sign with another team when COVID was at its worst which ended all current opportunities. To worsen the situation, I've been battling an injury for ~6 months. Just last week I came to the understanding that this injury will end my career. This leads me here.

If you've read this far, thank you. I feel that my life experience can carry over well into IB and hope my ability to endure long hours, work like a competitive beast, and execute under pressure find its place in the finance world. This is what I was passionate about before baseball became my entire life. The only problem is that I have no experience outside of the generic regurgitation classes I took in college and haven't truly done my own research for IB in 5 years. I am starting at 0.

I've been looking at WSO courses as a good starting point. What are some steps I could take to start building a better understanding of the high-finance world?  Are there any other websites, books, bloggers, video sources that you can suggest? What are some basic technical skills I can start diving in on? On another note... Am I too old for an entry-level analyst position? Do banks have a system to train their new/younger employees? There are just so many questions I have! I am grateful for any advice! Thank you again. 

 

 

 
  • Associate 1 in PE - LBOs
Jan 19, 2021 - 5:16pm

Disclaimer: Not OP

So sorry to hear about the injury, but this is a great story. I think you would have a shot getting into an entry level role if you're able to network and really flesh out why you want to do finance now post-baseball. There was an analyst in my group at a top BB that had pursued sports professionally before joining as an analyst - in a lot of ways the experience and slightly older age were net positives in being able to do the job. Best of luck!

 
  • Analyst 2 in IB-M&A
Jan 20, 2021 - 2:42am

Would love to be in the bullpen (pun intended) with a guy like you. The courses on here will certainly help, and there is so much on youtube and other free sites. Would think about how to set up your resume the best you can as well.

 

I don't have much in specific recommendations, but I remember reading the deal of the week a few years ago and found it quick and to the point on why specific, relevant M&A transactions occurred.

 

https://pillarsofwallstreet.com/resources/deal-of-the-week/

 

 

 
  • Associate 1 in PE - LBOs
Jan 25, 2021 - 9:09am

OP here: Thank you for sharing your story. Really sorry to hear about the injury but really happy that you pursued your dream and gave it your all. 

(1) Language: I've found that more than half of this is about immersing yourself in the language of finance. Read as much as you can and take the time to research and understand concepts. I read Pro Rata, Term Sheet, and Dealbook every morning. I also subscribe to Multiple Expansion and periodically review the blog posts that they post.

(2) Network: Try to reach out to alums, friends / family, etc. that work in an area of interest. They should be able to provide color on what to focus on and can hopefully provide insight on new opportunities and help you make connections. The more I spoke with people the more I understand the expectations of the role and to point #1, the more I understood the language.

(3) Practice: I found the Wall Street Prep courses a helpful introduction to modeling. From there I found Multiple Expansion very helpful because they provide step by step instruction. You'll find plenty of old models out there - try to understand as many different types of models as you can to build your familiarity with commons analyses and best practices. Start with understanding a DCF and comps, and then move to LBOs. I haven't done this personally but I've heard Martin Shkreli, Ackman, Palihapitiya have some good videos on Youtube - ultimately you're just trying to get as many perspectives as possible here.

(4) Age: Age is nothing but a number... until it isn't. Unfortunately, this is on a case-by-case basis. I'm a little older than the associates on my team and it was definitely something raised when I interviewed. There were some places that definitely dinged me for being older. What I tried to impart with the team was that I was humble and hardworking and just wanted a shot. Titles didn't matter to me as long as I could break into the industry. Given your story, I think people would be willing to take a shot on you. As a fellow athlete (Div 3 so not quite your level haha), people seem to value and appreciate our dedication so I would think that would only help you out here.  

 
Jan 18, 2021 - 10:48pm

I am trying to move to private equity (with 4 years of FP&A/project management/strategy & operations at 2 bulge brackets) after doing 2 private equity search fund internships under my belt in 2020 and crafting a good narrative for my move to private equity. Folks I have connected with recommend cold out reach to the VP level and above about potential opportunities at their firms (Introduce yourself, why PE, pitch your profile etc.). I feel that this is hit or miss (unless you are able to find something relatable with that person which you can mention in the initial email). I am currently studying for the GMAT (for the MBA routine to break in). Do you have any suggestions on networking tips as a come from a super non target?

 
  • Associate 1 in PE - LBOs
Jan 20, 2021 - 4:48pm

I think you're doing the right things. Given your experience, it might help you more if you did an MBA and tried to land a spot at a firm that way. FP&A / project management etc. don't really lend themselves to doing deal-related work so that will always be a flag for interviewers. Networking is a hard thing to teach, you have to be shown so unfortunately, I can't offer much help there (I've tried several times unsuccessfully to teach others). Or, you can try a game of numbers and learn by doing. When you cold email work on being concise with your emails (a short bio, why you want to chat, be flexible suggesting times, etc.). When you are successful in getting someone on the phone, ask the right questions that further the conversation and push for insight and make sure to learn the language of the industry. Also, as best as you can, drop the chip on your shoulder as it relates to being "non-target". People want to feel comfortable that you can do the work and be put in front of management teams. Fake it 'til it feels natural and no one will bat an eye at where you came from. Hope that helps!

 
Jan 19, 2021 - 7:38am

Thanks for the sharing! May i get more insights on how u breaking into IB from asset management?  
would love to hear wht it takes and the preparation required, great thanks!

 
  • Associate 1 in PE - LBOs
Jan 20, 2021 - 4:39pm

$260k all in. It's higher than some places but lower than others so I imagine it's in the middle 50% (waiting on liensofnewyork to post his report). Overall a huge bump from where I was previously so I'll take the dub. Hard to tell about trajectory because numbers are hard to come by at the Principal / MD level but I feel pretty confident that I've at least 2x my previous trajectory.

 
  • NA in IB-M&A
Jan 19, 2021 - 11:40am

What kind of bank did you lateral to from AM? Was it a BB or MM/Boutique? Would you have any advice on moving to the PE space if it was the latter?

 
Jan 19, 2021 - 12:14pm

How open are MM PE firms to recruiting associates from credit backgrounds? Currently an analyst in private credit and have seen quite a few PE exits from previous classes but am unsure how to navigate the process. I'm assuming I would have to reach out to HHs and form the connections myself instead of having them come to me like bankers? 

 
  • Associate 1 in PE - LBOs
Jan 20, 2021 - 4:31pm

It really depends on the firm. People in PE are usually pretty risk-averse and tend to stick to what they know. Anecdotally, I have a buddy that was in credit trying to move to the equity side and they were met with roadblocks even though they had had prior experience doing equity as well. Personally, I think the credit guys do more extensive and thoughtful modeling and due diligence (e.g. Oaktree) but ultimately it's up to the powers that be at the fund.  Dual track your approach and reach out to HHs and associates at funds. Make sure your story is solid as to why you want to be on the other side of the house and make sure your modeling is solid. I would imagine that it would be helpful to incorporate how thinking about upside and growing a business is where you want to be vs. downside protection/structuring. Good luck!  

 
  • Associate 3 in PE - LBOs
Jan 24, 2021 - 1:00pm

I came from a credit background - definitely harder to get looks up front and you will need to spin the credit experience in a bit of a different way. Additionally, be careful not to focus too much on downside risks in the interview process and also opine on growth opportunities and upside potential (this is a trap credit guys can fall into). I'd say from my leveraged finance banking group, exits were ~80-90% to private credit and remaining to private equity - part of the whole hiring process is luck so just have to convert on the limited number of equity interviews you do get

 
  • Associate 1 in PE - LBOs
Jan 20, 2021 - 3:53pm

You're in high school - relax. You should be more focused on doing well to get into the best school you can. From there, spend your college years figuring out a hypothesis for what you want to do over the long term. Spend the time now to do some soul searching vs. realizing at 40 yo that you hate your life and what you do. Don't just chase the money. While money is obviously an important factor, you start to feel less and less joy from each bonus so make sure what you do is part of where you find joy. Good luck!

 
Jan 19, 2021 - 1:27pm

.

Expert amateur seeking position as amateur expert.

 
Jan 19, 2021 - 1:45pm

Thank you for taking the time to answer questions--really really appreciated. 

  1. How long did it take to hear back after each round of PE interviews? Were you told at the end of an interview if you'd make it to the next round? (I've had one so far that felt as though it went well but they didn't explicitly mention anything about a second round.)
  2. How many first round then second round interviews did you have total?
  3. How long did it take to get an offer? (from first first round to offer)
  4. How many average rounds per firm for the total process? 

Trying to adjust my expectations, given how daunting and ambiguous the entire recruiting experience seems to be (I just started out). 

 

 

 
  • Associate 1 in PE - LBOs
Jan 20, 2021 - 4:03pm

1. Between each round was probably ~2 days. If firms want you they'll show their interest with their response time just as they do with hot assets. Always send follow-up notes thanking people for their time. After a while you'll get a good sense of whether you'll hear back about the next round. I found that I often had more intel than the HHs about how well I did based on the interviews. 

2. I interviewed with a handful of firms as I cast a wide net + the madness of the recruiting process that is pushed up earlier each year.

3. COVID messed up my timeline quite significantly by several months. I was close to a few offers in late February / early March. No way to tell for sure if I would have secured those offers ex-COVID. For my particular process, it was ~4 weeks from the first-round interview to signing.    

4. Most firms that I interviewed with seemed to have a first-round (behavioral) followed by second rounds with VP / Principals and then final rounds with MDs. 

 
Jan 19, 2021 - 1:53pm

1) What is your budget for transaction costs at the EOI, LOI, and SPA/closing stages of the transaction? To what what extent are you using third party service providers on each transaction?

2) Does your firm use expert networks to conduct early stage DD / thesis development?

3) What is your proprietary deal flow strategy?

4) How is your firm viewing Covid-related add backs and normalizations?

 
Jan 19, 2021 - 10:49pm

I am going for my MBA at University of Notre Dame this year, as an international student. People say that it isn't a target school, but I still want to get into Investment Banking post my MBA. I come from an engineering background with no experience around finance except for passing CFA L1.

How do I work for it and prove that I am worth my salt?

 
  • Intern in AM - Equities
Jan 21, 2021 - 5:28am

Thanks for sharing your experiences! Was wondering why you chose to switch to IB/PE instead of staying within BB AM e.g. doing public equities?

 
  • Associate 1 in PE - LBOs
Jan 21, 2021 - 9:45pm
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