AMA: Private Equity Associate, started after my undergraduate

peassoc's picture
Rank: Monkey | banana points 56

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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Comments (34)

Mar 8, 2019

Thanks for doing this!

  1. How large of a firm are you at in terms of fund size/AUM?
  2. How did responsibilities change from as an analyst to an associate?
  3. What was the comp range for an analyst at your firm and how much did that increase as an associate?
  4. Does your position also require sourcing or is it purely deal execution?
Mar 8, 2019

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
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Mar 8, 2019

Very helpful! Does your specific shop have a credit arm as well? I'm aware that many of the MF PE shops are attempting to diversify into credit. Also who are the lenders your MF typically works with?

Mar 19, 2019

Thanks for doing this!

How has the transition been from analyst to associate? Specifically in regards to having greater technical demands since you didn't have many technical duties as an analyst.

Mar 8, 2019

Thanks for spending some time doing this. I'm most interested in how you got the original offer in PE out of undergrad.

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Mar 8, 2019

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

Mar 8, 2019

Does your specific firm require you to go back to business school, and if not do you have any intentions to do so?

Mar 8, 2019

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

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Mar 14, 2019

Thanks for doing this! Not necessarily related to you PE Analyst/Associate experiences per se...but do you mind talking a little bit about the deferred MBA admissions process a little bit? Basically the process and what you felt these programs were looking for, when you took your gmat, and who your LORs were from?

Planning on applying to a couple of these programs next year.

Mar 8, 2019

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

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Mar 9, 2019

Do you happen to know anything about PE analyst programmes in the UK and how the process compares to the US?

Mar 8, 2019

Generally, PE recruiting outside of the US is less structured, ie. they don't require IB, first-year analysts. In the UK, pretty sure there are a number of firms that recruit out of undergrad. Can't really comment since I don't know too much about the scene there

Mar 9, 2019

What was an estimate of your undergraduate GPA?

Mar 8, 2019

Graduated with high honors. Definitely not a 4.0 though

Mar 11, 2019

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?

Mar 8, 2019

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

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Mar 8, 2019

Just want to add that I have gotten a lot of PMs. Happy to answer but will take a while to respond to all of them

Mar 11, 2019

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.

Mar 8, 2019

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

    • 1
Mar 13, 2019

How does recruiting work if you want to move to another PE fund after two years?

Mar 8, 2019

Headhunters reach out to us, but we have to be a bit more proactive and have a good story for leaving, not as easy as sitting back and receiving emails

Mar 14, 2019

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

Mar 8, 2019

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

Mar 14, 2019

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

Mar 8, 2019

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.

Mar 14, 2019

How many associates or analysts at your firm have MBB backgrounds?

Mar 8, 2019

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

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Mar 14, 2019

How many of your associates are lateral analyst hires from LMM or MM PE firms? Would that be a possible transition to make? Or would business school be required?

Mar 8, 2019

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

Mar 14, 2019

Thanks! B-school is my plan right now. I really do like working in growth equity so far, so maybe I would have better chance at moving to a UMM/MF on their growth equity team.

Mar 8, 2019

To all who sent me a PM: I will eventually get back to you but might take a bit. I am happy to answer more specific questions about yourself that you don't feel comfortable sharing publicly, but I do think some of the questions being asked are better posed on this forum