Q&A: Private Equity Associate, started after my undergraduate

Bit of a slow Friday, but have to wait in the office for a bit. Happy to answer any questions about my job - currently an associate after a recent promotion from analyst. Created this throwaway account, happy to answer anything.

 
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No worries. Was caught up in something for a bit but fre now.

  1. Megafund. 40 billion+
  2. Analyst level, at least where I am, is pretty chill in terms of what they expect. They really didn't expect us to model too much, but we were more there to learn and build a skillset, especially in our first year. Now, as an associate, I'm supposed to evaluate deals and do a lot more of the technical skills. Also some level of sourcing, but it isn't too bad
  3. Comp range for the first two years is comparable to a top independent advisory firm analyst. Basically the same as a top-bucket analyst at an EB. Associate pay base didn't jump too much, but a much bigger bonus.
  4. Now, I have some sourcing responsibilities, but still primarily deal execution. I also help manage the younger analysts. Our firm does more sourcing than most places; we are less of an auction type firm than some other places
 

Won't say too much about my background beyond - top target undergrad, graduated with honors. Summer at a mid-tier BB in a solid, but probably not one of the most well-known, group. So PE out of undergrad is not a very structured recruiting process at most places, except at a couple firms (BX comes to mind, as does Silver Lake and Vista). Additionally, few places even take undergrads. I was lucky enough to have a couple people I know at firms that recruit from undergrad, and they put me in touch. Had an interview towards the end of my junior summer, then received an offer to join out of undergrad. They aren't really looking for technical skills, more looking for your mindset as an investor and your personality/cultural fit. PE firms aren't that large, so it really is possible to have a firm-wide culture

 

Some people can be "required to leave" for business school. They don't really push you out in the sense that they explicitly tell you to leave, but they do say that further advancement isn't possible. You have some flexibility; the firm is open to giving you some extra time to figure out your next step. There is some possibility you can stay if you are a top associate - they are definitely open to promoting from within.

I have received positive feedback and I believe that when the time comes, I will be in a good position for staying for a post-MBA role without one. That being said, I was accepted in college to a deferred admissions program, and may attend. Haven't decided yet

 

Sure. Applied my senior spring of college, took the GMAT, got letters of recommendation from a Professor and my old boss, wrote the application essays. Honestly not sure what they are looking for, but I had a strong undergrad, strong GPA, very good GMAT, and I think my letters were solid. Additionally, my work experience (especially at the time) was definitely unique compared to the average banker who's applying. Pretty sure they take mostly good schools this round, kids that are studs. The more interesting experience candidates tend to after work experience

 

Hey thanks for doing this - how do your work hours compare to that of a Top EB/BB analyst/associate hours? Also, as an associate at a MF are you typically working with specific people and/or teams (other analysts/assoc/principals) like how IB has deal-teams?

 

Hours are not that different, but less weekend work and more variable hours. If we are finishing up a big investment then the hours are equal to, if not worse than, the worst banking days. But the average day is definitely a bit better and I normally don't work Sundays. Depends on the deal. For the biggest deals, we have a full team - analyst, associate, principal etc. Sometimes more than 1 of each for a couple. Smaller deals can have just a single associate on it, and a senior guy who is more of the relationship manager. As an analyst though, especially a first-year, you're more there to learn and help out on anything that the associate/second-year can't necessarily do or doesn't want to do. You do definitely participate in modeling

 

Are there any common characteristics for those that get invited to interview at your firm at the associate level that do not get offers extended to them? (excluding errors on modeling test)

Any advice on how to practice coming off more polished/articulate? I feel strong on technicals and have a solid background, but realized that I need to become more proficient in articulating my thoughts/ideas/answers concisely and professionally.

I hope to be interviewing for associate positions in the first recruiting cycle coming from a BB.

 

Honestly, the process is pretty brutal before getting to me (I just participated in firm-wide recruiting this past year). You have to get past headhunters and initial screenings before getting in front of us, so we don't really have that many candidates. Personally, I don't think technicals or even your why PE answer matters too much (unless you have a bad answer, it can only hurt you). What's more important is fit - can you see this person as someone who can eventually make it to a senior position, and would you be ok spending 12 hours stranded at an airport with this guy - basically, is he competent, cool enough to get along with, and able to bring in business

 

As I sit here preparing my umpteenth sell-side pitch, I've always wondered how buyside shops select their sell-side bankers. How does your shop weigh the following characteristics when hiring an advisor?

a) firm name brand b) personal relationship with banker c) relevant deal credentials d) performance in pitch

"I don't know how to explain to you that you should care about other people."
 

Honestly, I don't make the call, but what I can say is: 1. We don't care that much about the brand. Really isn't that important 2. Strong personal relationship definitely matters 3. Cheap leverage and special perks are always a bonus. Good industry relationships are also important 4. Almost never actually matters unless you guys mess up something. I don't care about your font or presentation style

 

Great thread, quick question from me. What is the B4 presence like at your firm (if any), and what are your thoughts for changing B4 early to move into boutique corporate finance? Unsure as to whether the skillset I currently am getting will be attractive to PE, despite numerous roles I see advertised asking for ACA qualified TS experience (UK London).

Thanks

 

Among the investments associates and analysts, unfortunately, no one I know has worked in accounting. If you're asking about their consulting practice, I think there might be a more senior person who originally (way back when) worked at like Deloitte consulting or something. The skillset is pretty relevant, but mostly at a lower, modeling level. When they hire analysts/associates they are looking for potential future partners, which has almost nothing to do with skillset - people tend to not think about this when recruiting. It is why if people are dead-set on PE, and still want to do banking first, I encourage them to go for PE full-time - thinking like an investor is more important than technical skills.

 

There are a couple, but most still have relevant finance experience (one that comes to mind is someone who did an SA stint in banking, then fulltime at an MBB in their PE practice). I wouldn't say we hire one every year, but every year there are a couple who make it to the final rounds of interviews and are generally impressive, but operating roles are definitely more suited to consultants in general

 

None that I know of, unfortunately. I think there is a more senior guy who lateraled in from a top UMM firm, but that's really it. B-School is definitely the move, and an LMM firm won't impress anyone here (not to look down on them, it is just that it is really different to look at a 5 billion deal vs. 10 mil). Maybe if you're coming from a really solid MM or an UMM firm and you impress during networking you can definitely get a shot after B-School

 

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