AMA- Undergrad to PE (Ask me anything)

JDS07's picture
Rank: Senior Baboon | 223

Hi everyone! I've really enjoyed the community here at WSO and the fantastic insights and advice people have shared over the years, so thought I'd give back and share my non-traditional experience.

My Background:

Target school, liberal arts major. Interned at a BB IBD my junior summer, and went directly to a well-respected MM PE firm post graduation.

Ask Me Anything:

Happy to answer any questions about what the day-to-day role is like, recruiting (at both my level and more senior levels), why I made this decision, etc.

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WSO Podcast: Member @JDS07

For the podcast I share my path to joining a top private equity fund as an analyst right out of undergrad. I covered a wide range of topics including: 1) What I learned during my bulge bracket investment banking internship 2) Why I wanted to skip investment banking 3) What I am seeing in the deal landscape, how my firm does diligence and how involved I am 4) Detailed advice on how to prepare for super competitive private equity interviews with limited deal experience 5) What I plan on doing next...

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Comments (44)

Jun 17, 2019

Thanks!

1) did you not enjoy IB or was your plan always to recruit for FT PE?

2) did the PE fund have a formal process or did you network your way in?

Jun 17, 2019

Your first question might prompt a good debate of why IB vs. PE, so I'll just provide my own thoughts:
1) Having been on the IB side briefly and now being on the other side, my firm typically views bankers as people who are really good marketers and know how to drive a competitive process (if they're good bankers). I knew that IB was going to be a transition career into PE, so my if I didn't get into a solid PE firm for FT, then I would have gone back to IB and did my two years and recruited then. To be honest, the work I do in PE assessing deals is far more complex and "impactful" than what I did in IB (spent many more hours turning purely cosmetic comments on decks....)

There are pros and cons to going into PE out of undergrad (M&I has a good article on this as well), and I'm happy to discuss that if you're interested. Overall the nature of the PE firm is really important.

2) My firm had a formal recruiting process for its core target schools (where most of the mid-level to senior people graduated from or have connections with). My school wasn't one of them, and I was the only one in many years to have got in through just cold emailing. Literally just emailed someone from the firm's website and managed to get a superday after a phone conversation. You might be surprised at the response rate you get from cold emailing if it's right during recruiting season.

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Jun 17, 2019

Thanks, really appreciate the detailed response.

Would love to hear more about your perspective regarding the advantages/disadvantages of going into PE out of undergrad. Have you given any thought to how you would stack up against BB IB analysts if you choose to lateral in 2 years for whatever reason/if you will have a similar skill set to IB analysts in 2 years?

Jun 18, 2019

1 - makes sense but you didn't really "do" banking.. you interned. Even 6 months into an analyst role, you're not even close to where you were as an intern.

FWIW, I think banking is a good start to IB/PE career. It's helpful if you're going to PE since (i) banks can usually give you more formal training, (ii) banks generally have people / more structure which is helpful as you need people to lean on and (iii) when you get to PE, you'll know the "tricks" bankers use (whether that's in the process, CIMs, etc.)

Either way, congrats on getting into PE right out of undergrad - very impressive and no small feat. Best of luck.

May be biased as I did the IB > PE track.

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Jun 19, 2019

Would love to hear more about your cold emailing tactics. What roles did you target, how did you approach it, etc... you can PM me as well if you don't want it posted, would highly appreciate it.

    • 1
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9 LBO Modeling Tests, 10+ hours of PE Cases and 2,447+ interview insights across 203 private equity funds. The WSO Private Equity Interview Prep Course has everything you'll ever need to break into the competitive PE industry. Learn more.

Jun 27, 2019

Hi! What did your email look like? I have cold mailed a few times but I don't think my email looks or sounds good.
Thank you!

Jun 17, 2019

Do you think IB internships at a BB are a requirement for FT PE recruiting? Or will in certain cases firms consider other buyside/IB internships that don't fall into this category? My question's considering extracurriculars, gpa, target school are all checked boxes given PE recruiting is that highly competitive. Also, were certifications/any specific clubs crucial to your interviewing experience? I only ask this because we barely have work experience to put on our resumes at this point in our careers and it gets hard to differentiate yourself with so many 3.9 targets for so few positions.

Jun 17, 2019

It's not a requirement per se, but ideally you'd have a junior summer internship in either a reputable bank in a front office role, management consulting, or some other interesting intership that shows who are you are a person (e.g. Venture for America or an unique startup). The other who interviewed for my role, and those we have interviewed the year after have all come from various IB/consulting/PWM/S&T backgrounds.

Unfortunately every year things get more and more competitive. It's easier to stand out now if you have a more non-traditional background (e.g. studied CS or dual majored in engineering and finance), because the technical skill set you might be able to bring to the firm is different than those who came from strictly accounting/finance programs. That said, those do have a distinct leg up in terms of the day-to-day work.

I don't think I had anything special on my resume, so I think being able to get that first call is really important, and it comes down to distinguishing yourself in the interview. Clubs matter less after your junior year, I've found.

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Jun 17, 2019

When did you get the ft offer? What month. Also, how did you network while working in banking for the summer?

Jun 17, 2019

I got my offer at the end of August two weeks after my summer internship ended. This was a slightly accelerated process as I had some exploding offers, but due to how early banks recruit now, we have also started recruiting earlier. I cannot tell you the number of sophomores/juniors who have called in the last couple of months who are trying to network into a potential FT position here.

I did a little networking during my junior summer, but it was all remote (you have very little time to go anywhere as a banking intern trying to get a return offer) and through alumni, though I didn't network with my current firm at all.

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Jun 18, 2019

Congrats and thanks for the ama! I'm wondering if the PE firm u will be joining is on par with most of the exits of the 2nd year analysts in ur BB group? Also, how is the interview process like? Were u expected to build an LBO or anything very technical?

Jun 17, 2019

I've actually worked at my current firm for a year now, but thank you! It's a MM PE firm with a decent amount of AUM ($10bn+) and a strategic focus so would say it's on par with analyst exits. There are so many more MM PE firms for every MF, after all.

Superday interview consisted of 5-6 rounds and also a social round so you end up meeting a good portion of the whole firm. The interviews for PE analyst roles typically involve a paper LBO / consulting case study and stops there. The PE associate roles at my firm, however, are much tougher (i.e. excel modeling test for a few hours based on an abbreviated CIM, and have to write up an investment recommendation afterwards). When I was debating whether I wanted to take this offer versus a BB offer, something that came to mind was the fact that associate interviews would be significantly tougher, so it would be good if I get in while the interviews are still much easier.

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9 LBO Modeling Tests, 10+ hours of PE Cases and 2,447+ interview insights across 203 private equity funds. The WSO Private Equity Interview Prep Course has everything you'll ever need to break into the competitive PE industry. Learn more.

Jun 18, 2019

Was it luck?

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Jun 17, 2019

To getting the offer? There is always an element of luck in your interviews. I connected well with the firm and believe a few people were instrumental in pushing me forward.

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Most Helpful
Jun 19, 2019

God I respect the hell out of that response; too many people go to extremes and seem to think someone only got the offer because of daddy/minority status or they were some interviewing demigod. In reality, few things are as straightforward as what you read on a WSO forum

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Jun 18, 2019

also curious as to what's your opinion on credit PE? saw your post earlier from a while back!

Jun 17, 2019

The responses I received as well as conversations with others are pretty consistent. Credit PE is typically more predictable, better hours, but the work might not be as interesting. Credit PE firms often get a lender model from PE firms (though they do their own modeling), and it's a simpler exercise to try to find out how likely the company will go bankrupt or not return their dollars.

Quite frankly, a friend recently left credit PE to come to normal PE and said he felt bored in credit PE. The compensation upside is also much higher in PE (taking on higher risk to seek higher returns, after all). That's not to say credit PE isn't ludicrous or interesting, especially on the distressed side, but it's probably easier to go from normal PE to credit PE than vice versa.

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Jun 23, 2019

What do you mean by "credit PE"? Generally I would think of distressed or loan to own situations, but you seem to be talking about something else. Direct lending maybe?

Jun 19, 2019

Do you see any or have you heard of any candidates from maybe non-traditional backgrounds (credit underwriting at banks, analyst roles at reits, etc.) successfully receive offers, assuming they have some experience in the same asset class?

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Jun 17, 2019

Certainly. We've interviewed some people with asset management and consulting experience, and one person who came from credit (but buyside, not sellside). The hard part is probably getting the chance to be interviewed, and using the resources available online to prove yourself (which is by no means easy). The reality is that there are very few open spots in PE, so sometimes you might have to trade down a position (i.e. worked for 3 years and still come in as an analyst or whatever entry-level position).

I also know off-handed of someone who got to a superday stage with a very well known megafund PE (but not the standard ones who finish on-cycle on a weekend) with a credit underwriting/slightly DCM background.

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Jun 23, 2019

How does comp. compare to IB? 150k, 180k, 210k? More or less?

Also, does this firm/most MM firms of your size expect associates to get MBAs?

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Jun 17, 2019

You're listing a high range of amount. Base is a bit higher, though bonus is lower, since there's a performance bonus cap that you can reach. It tends to be that PE in its lower tiers comp less than IB, but at the higher levels it all depends on firm performance.

I would say that typically most PE firms promote at most a very small subset of associates in a 1-2 year program. My firm doesn't do that, and people have historically stayed on and got promoted, which is a rarity in this space. The reason is because the funnel is small and someone new receiving carry means someone needs to give some of their own carry.

Jun 30, 2019

Would you mind being a bit more specific on what your base/bonus was going in as a first year analyst? Were any of the benefits (401k, vacation) different than what you'd find in IB?

Jun 23, 2019

What is the path to aso at your firm? Also what do people do if they dont get aso?

I elected to go the other route (IB FT to PE) because I was worried about an analyst program not moving me up or taking an additional year or two / having less optionality for reference

    • 1
Jun 17, 2019

How are you liking your PE job now, if you're still an associate?

Well, analyst to associate was 2 years historically, though now it's 2-3 years depending on how good someone is. If someone doesn't make associate they just stay as an analyst. We haven't had that many people leave the firm in the past, and the vast majority of those who left left PE entirely to do something else for various personal reasons.

Very valid concerns. I wouldn't have picked my firm if 1) the firm seemed to really value coaching its members, and 2) we had just finished fundraising for a new fund that was double the size of the previous fund so that meant more chances of closing a deal. In the grand scheme of things, an additional year isn't really a concern, I've seen.

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Jun 23, 2019

Thanks for the color - helpful

Just coming off of my 2 years ibd so haven't started yet in pe. Honestly not super excited to go hard again for 2 more now that I've had a break.

Jun 24, 2019

I know two older college mates who are current interns at Blackstone. How much tougher is it to get an internship and full-time offer from BX compared to IBD at JPM GS MS? Does the BX internship and full-time offer compensation far exceed IBD? I feel awkward asking older friends these questions. Thanks!

Jun 17, 2019

I really can't speak to that since there are so many more elements to getting a full time offer that has to do with group dynamics, performance, and how many spots there are. My personal view is that it's easier to get a full-time offer from BX (unless one is in a group that primarily doesn't take analysts, structured like Apollo's internship) than at a BB possibly due to BX not likely to overhire its summer interns.

I would ask your friends at the end of their summers and get their views.

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Jun 25, 2019

Where do we find PE job posting?

Jun 17, 2019

Pre-full time postings may be found through your school's recruiting portal, applying to firms online, or just reaching out to someone at the firm (since most firms won't actually have an application portal). Beyond that headhunters will be your primary point of contact if you're trying to target many firms.

Jul 2, 2019

Hey, how have you been finding the experience of building models in spreadsheets so far? Any particular pain points, or parts of the process/workflow that you don't like?

I'm working on a product (https://causal.app) to address some of the problems with spreadsheet modelling, so very interested in the PE modelling workflow + how new tech can add value in PE. Would love to chat if you have any thoughts on this!

Jul 2, 2019
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Jun 17, 2019