AMA - Private Equity Internships

Hello Internship-Seekers!

I have not posted on WSO very much but have utilized a lot of its resources to help pursue my current opportunities. I want to make myself open for you guys to ask me some questions about anything private equity/IB/networking/internship-seeking related. I will be more than happy to help you all by answering any questions you may have that can leverage you to capitalize on internship opportunties.

A little bit of background about myself:

I am a student at a non-target university with a lot of private equity experience. I first obtained an internship at an upper MM PE fund my freshman year of college and have stuck with it ever since. As an analyst at a PE fund that is not necessarily considered "bulge bracket," I have had the opportunity to work directly with all aspects of the private equity process. From deal sourcing and financial modeling to deal closing, I have worked on large-scale projects and acquisitions, making large contributions. I also have priors of working in sales and trading doing high-frequency proprietary trading on equities.

Please feel free to ask me any questions that you may have. I hope my answers can be of use to you all as you go out and obtain your dream internships!

P.S. Don't mind the keywords section, it is all sorts of messed up for some reason.

Comments (30)

Jan 13, 2016

Do you feel like PE internships actually prepare you work-wise? Or is it mostly a way to get your foot in the door?

Jan 13, 2016

Based on my current and past experiences, I think that internships in private equity accomplish both. A private equity internship on your resume is something that is very appreciated by employers, including and especially in the PE, IB, and hedge fund industries. Private equity internships at larger funds are more uncommon and have a higher exclusivity than most IB internships. Most people tend to go through IB first to get into PE, so having PE internship experience before graduation is something that will stand out to wherever you decide to apply. If your aspirations are to break into IB, having private equity experience will make your chances a lot greater than just an Asset Management position. As you probably know, PE and IB work very closely together with one being the buy-side and the other being the sell-side.

In regards to preparation, it will certainly depend on the company you intern at, and that applies to all industries within finance, not just PE. Some employers will have you doing extensive modeling and work on acquisitions, while others may have you only preparing offering memo's or doing minor office tasks. My internship has been very extensive, and I have done very meaningful work that I think has made an impact directly on the company. I have also gained A LOT of knowledge in the PE industry through my internships.

    • 2
Jan 13, 2016

how did you go about finding your PE internship?

Jan 13, 2016

Initially, I met with a recruiter at an internship fair and received information on the application process, as well as exchanged contact information. I reached out to the recruiter the day after, thanking them for their time. I then proceeded to ask more about the program and deadlines, and was able to get an interview.

Networking is key at this stage of the game. Even if PE recruiters do not come to your school to speak with students physically, hop onto LinkedIn and find alumni or common connections and start messaging or emailing them. There are a lot of networking email templates on here that work wonders.

Are you currently trying to pursue an internship in PE? If so, what other advice can I give you to network and find a position?

    • 1
Jan 13, 2016

How did you learn to model? Any resources you would recommend?

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Jan 13, 2016

The majority of the modeling I learned was through training at the company. I did, however, go into the internship with a foundation of knowledge in LBO and DCF modeling.

I would highly recommend reading books on investment banking and valuation, they will teach you all of the basics. From there, you can find online resources that will allow you to practice using actual models, walking you through each step of the model. There are also Wall Street Training courses you can take, some of these are cheap and are just fundamental, while others can be hundreds of dollars and get very advanced.

You can find a PDF of "Investment Banking - Valuations, Leveraged Buyouts, and M&A" by Rosenbaum online. This book is a great resource.

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Jan 13, 2016

You got a full on MM PE internship your freshman year and you have experience in high freq. prop trading? Jesus man that's impressive. Were the internships summer/off-cycle?

Jan 13, 2016

Thank you for the support! The trading experience was over the past Summer, mainly remote and not in-office using private trading platforms accessed via Cloud. The PE internship I obtained was initially during the Winter semester of freshman year, and I have continued it since.

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Jul 30, 2017

how does remote work experience look on a resume? will it look legit ? thanks

Jan 13, 2016

Do you recommend high school seniors do internships the summer after they graduate. If not, what do you recommend they do during the summer before freshman year of college. Any advice on seeking/finding internships and in what industries would be great.

Jan 13, 2016

If you can get an internship then I would highly recommend it. Getting an internship in finance as a college freshman is hard enough, let alone a senior in high-school. There are, however, some things you can do to obtain experience in finance. You can get an internship or part time position at a local community bank or even work somewhere larger as an unpaid intern doing some more mundane tasks. Without college classes and other finance related experiences, it is highly unlikely to get an in-depth PE, IB, etc. internship.

I would definitely start networking with professionals at your stage of the game. It is never too early to start networking, in fact, the earlier the better.

Jan 13, 2016

Do you have any family connections in finance?

Jan 13, 2016

I have some connections in the Asset Management industry, but absolutely none in private equity and investment banking. All of my experiences and opportunities were obtained through me reaching out to professionals, going to career fairs, and networking my way in.

    • 1
Jan 13, 2016

Is there any advice you can give towards the informational interview process and then closing it and actually asking for the internship?

Thanks for doing this, do you mind if I send you a PM?

Jan 13, 2016

You can certainly send me a PM, I'd be happy to help! To acquire an informational interview, you are going to want to reach out to recruiters or professionals asking them for advice in pursuing your career path and/or how they pursued their career path. From there you lead into the internship aspect of it, by asking them what internship opportunities are available at their company. If he/she does not ask for your resume after that, then I would recommend bringing it up yourself as a last-ditch effort to pass on your resume to apply.

A lot of large companies have the online application process, so most recruiters will just refer you to fill-out the application online (which we all know has a lot lower success rates than knowing someone within the firm). I would start networking early so you can build a relationship with the professional you are contacting, so they feel like you are not just using them to get the position then they will, more times than not, help you out.

    • 1
Jan 14, 2016

Thanks a lot for doing this.

So what kind of questions do they ask you during the interview since you ve never done banking for two years? How does the modeling test look like?
And one more question: why do you think a PE firm would hire an analyst from UG given that their head counts are mostly small?

Thanks again!

Jan 20, 2016

The interview started off as mainly personality-based. Basically, getting to know me, my past experiences, and educational aspects. The had me analyze a company's background and financials and tell them if it was a good company to acquire or not, and why. They asked me a lot of technicals, such as: PE ratios, EBITDA, multiples, etc. Then I got asked a few brain-teaser questions that really make you think outside the box, creatively. Accounting questions made up a large portion of the interview as well (so the different sections of each statement, what they mean, how to analyze them, etc.)

For the modeling test I was given a template with some of the numbers filled in and I had to complete the rest of it to find the valuation on the example company. I then had to spread the numbers on the investment section to alter how much of the purchase price would be allocated to each type of equity and debt to produce the best cash flow projections.

PE firms most always look for very experienced candidates who went through IB, however, I was lucky. I think that they took me as an undergrad because I showed a lot of potential and ambition. I learned practically everything I know now about PE during the internship, so I did not go into it with a lot of knowledge or expertise. Standing out to recruiters is the most important thing, so you've got to find a way to make yourself the best candidate you can possibly be, given the experience and tools you have.

    • 1
Jan 14, 2016

2 quick questions.

  1. After your time in PE, will you pick your current PE over a BB IBD role for full time?
  2. Given that you had self-studied modelling, do you think it is necessary to go through IBD or would you recommend going to PE straight after your time there.

Thanks.

Jan 20, 2016

1.) It would all depend on the offers that I will have on the table, come graduation. I think my odds of getting into a BB PE firm are a lot higher now that I will have around 2 years experience in PE. If I got an offer at a BB IBD it would be a tough choice, but I would probably end up just staying with my PE offer.

2.) Most times, PE firms are going to target candidates with 2+ years of experience in IB, that is, if you don't somehow get a PE internship experience before you graduate. If PE is your end-goal, I would highly suggest pushing for internships in PE now, however, given that PE is harder to get into than IB, I wouldn't limit myself to just applying for PE positions.

Best Response
Jul 30, 2017

Saying shit like BB PE firm makes me think you don't actually know that much about the industry... there is no such thing as a BB PE firm.

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Jan 20, 2016

How are the exit opps from an analyst position at one of the large >$5bn funds after two years as an analyst?

Jan 22, 2016

Your exit opportunities will be very good if you land a >$5bn private equity fund. You could move on to industry leading hedge fund, or even stick with PE and transition to a higher position at a BB PE shop. Venture capital would also be a transition opportunity.

Jan 23, 2016

From my understanding, the main concern people have about starting in PE is the lack of modeling experience, and not having as good exit opps as a good group at a BB or a EB. What are your thoughts on that?

Jan 24, 2016

From my understanding, the large firms (>$5bn) that recruit for summer internships and for their analyst program are:

KKR
BX
Ares
Silver Lake
LGP

Am I missing some? How would exit opps be out of a lower-tier fund like Ares/SLP/LGP?

Thanks for answering all my questions!

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Jan 26, 2016

You can view all of the large PE firms in the companies section above on the toolbar. There is also Apollo, Blackstone, BlackRock, and many others that can be classified as top-tier. Exit opportunities are going to be in your favor for most of the funds you go to, unless it is some place off the radar operating out of a garage with $100k in AUM.

Jan 28, 2016

Thanks for all your help!

Jan 29, 2016

Hi,

Thank you very much for this topic.
I am a current INSEAD MBA with a background in IT/Tech and some VC experience - very interested in breaking in PE. Can you advise with which particular firms I would have more chances as I do not have prior IB or hardcore finance background. What would you recommend to do in my situation?

Feb 1, 2016
Comment
Feb 16, 2017