Ask me anything: I'm a private equity associate in Canada

bear396's picture
Rank: Baboon | 126

Coming from a non-target, WSO was a fantastic resource for me in university. There are a ton of Canadians on the forum but not enough Canadian content so thought I'd try to give back to the community and help out with any questions about working in / recruiting at investment banks, private equity and hedge funds in Canada.

I graduated from a non-target in Canada, worked at a Canadian bank for two years and have been working in private equity for the last two years.

Comments (43)

Aug 19, 2013

Hi, thanks for doing this! I have some initial questions to get some more background and context:

1) What sort of fund are you at? AUM range?
2) Which sectors do you/your fund cover?
3) What are your responsibilities? Do tell us the weightage too, as in, how much portion of your time you spend on each area.
4) Work culture and hours?

I have lots more, but let's start with these for now. Thanks!

Aug 19, 2013

Sorry but I'm not going to answer these questions for disclosure reasons. There aren't that many legitimate private equity funds in Canada and answering these questions would make it reasonably easy to guess my identity. Happy to answer any questions about a specific fund if you have any.

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Aug 19, 2013

C'mon, you're telling me you can't talk about what are your responsibilities, work culture and hours like?

Aug 20, 2013
CAinPE:

Hi, thanks for doing this! I have some initial questions to get some more background and context:

1) What sort of fund are you at? AUM range?

2) Which sectors do you/your fund cover?

3) What are your responsibilities? Do tell us the weightage too, as in, how much portion of your time you spend on each area.

4) Work culture and hours?

I have lots more, but let's start with these for now. Thanks!

Are you fucking retarded? Answers to any one of questions 1, 2 or 4 would pretty much give away which fund he works at.

That said, I am curious -- (to OP) are you at one of the pension funds or an independent?

Aug 20, 2013

Won't comment but I have a lot of friends in both.

Aug 21, 2013

Your comment made me laugh. Work culture and hours would give away where he works? Boutique/MM/BB will tell us that? Unless Canadian PE is made up of something around 3 funds, I'd say he's pretty safe. I'll give you the second question, though. If the industry there indeed is small, that's the only question which can remotely identify him.

Never mind, not finding much useful answers in this thread anyway. Hope someone asks better questions than I did (which OP can actually answer).

Aug 19, 2013

Oh and one more - how did you break into PE?

Aug 19, 2013

Canadian private equity recruiting is different from the U.S. Unless you're recruiting at Onex, most of it is more ad-hoc and focused on immediate starts on an as-needed basis. It's also less structured and while you can use a headhunter such as Thorek and Scott, you can just as likely apply online on a website (for the pension funds), or get referred internally through a friend. I did two years of investment banking so it's the fairly standard path towards getting into private equity.

Aug 19, 2013

I'am a currently studying finance at a semi-target in the Netherlands. Do you have any general tips for students willing to break into the financial industry, regarding internships, studying abroad, study associations etc. ? Would help me a lot!

Aug 19, 2013

Unfortunately I have no experience with recruiting in the Netherlands. I'd imagine you'd first focus on getting a front-office job in the Netherlands which you could then leverage towards moving to London which may have a broader number of opportunities.

Aug 19, 2013

How do you typically deal with investments in the US (if your firm does this)? I am US-based and we look in Canada from time to time, but we have no experience with currency issues, different regulations, etc. Thanks.

Aug 20, 2013

It really depends on what currency the fund is denominated in. For example, Onex and ONCAP are US$ denominated funds and would look at hedging a C$ or Euro based investment whereas the Canadian mid-cap funds are generally C$ denominated funds (and invest only in Canadian companies). The pension funds are generally comfortable with US$ exposure given their investing universe and the large amount of capital they have to deploy.

Hedging an equity investment however, can be extremely complicated. For example, if a US$ fund were to invest in a Canadian company, they would be long the C$ and short the US$. However, if the company manufactured steel pipes (assuming iron ore and met coal are all sourced from Canada) that they sold into the U.S., operationally they would be short the C$ and long the US$, the degree of which depends on the operating leverage of the company and the day to day hedging activities on an operational level. The currency of the debt raised (and whether you swap this out) will also impact your currency exposure. As you can imagine, these factors make it very difficult to precisely predict the change in equity value as the underlying foreign exchange rate changes. To complicate matters further, an equity hedge would be for an indefinite time horizon and an indefinite amount. On top of the basis risk mentioned above, you may also end up with a mismatched cash flow profile because it is difficult to predict when you would dividend out cash / sell the company. While a long-dated option could help solve this problem, the cost of such a hedge could easily be 5%+ of your equity investment. What you do see more often is a currency hedge between signing and closing which is more straightforward.

From an accounting, legal, pensions / HR, environmental, labour, and tax perspective, we typically hire advisors that are familiar with the respective jurisdiction. We would do the same thing even when looking at Canadian investments.

Aug 19, 2013

@bear396:

1. How many moose do you see on a per-week and per-annum basis? What is considered "high" moose-flow and "low" moose-flow?

2. How invested in maple syrup is your fund and what is your syrup brand acquisition strategy? Do you diversify with non-Canadian syrup at the risk of bad PR?

3. Do you pronounce "Leveraged Buyout" in the same way you pronounce "About?" So...like "Leveraged Buyooot?"

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Best Response
Aug 20, 2013

(1) Not all moose are the same. We look at it from a total lbs of moose per month basis rather than the number of moose. This is also not desirable hence why most Canadian private equity funds are located in Toronto and not Alberta or BC. Even the BC pension fund is located in Victoria rather than more moose-friendly locations.

(2) We tried to go to market with a maple syrup denominated fund but there wasn't any interest outside of Quebec. Non-Canadian maple syrup is not considered maple syrup.

(3) We generally just use the acronym. That way Americans can understand us.

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Aug 20, 2013
bear396:

(1) Not all moose are the same. We look at it from a total lbs of moose per month basis rather than the number of moose. This is also not desirable hence why most Canadian private equity funds are located in Toronto and not Alberta or BC. Even the BC pension fund is located in Victoria rather than more moose-friendly locations.

(2) We tried to go to market with a maple syrup denominated fund but there wasn't any interest outside of Quebec. Non-Canadian maple syrup is not considered maple syrup.

(3) We generally just use the acronym. That way Americans can understand us.

hahahaha perfect.

Aug 19, 2013

If you don't mind sharing how you secured your analyst role in 2009?
More importantly, do you still drink Tim Horton's after becoming a PE associate?

Aug 20, 2013

The typical investment banking recruiting process. Managed to get a summer internship at a Canadian bank which converted into a full-time offer. Generally, the Canadian banks are fairly receptive to most Canadian schools. I've seen students from almost every school in Canada get into investment banking. If you're smart, hardworking, presentable and interested in the business, you should be able to find a way into investment banking in Canada.

Yes. Roll up the rim doesn't grow old.

Aug 19, 2013

yeaaaa canada, couple q's....

1) How did you break into your analyst role? BB? - if not BB, then, did you find this affected your ability to jump to PE?

2) In all honesty, ho much money do you make? Not cas I don't know how much a PE associates make, but because most of the info on the internet is geared toward New York and I've heard Toronto (especially PE) isn't quite as lucrative. Thoughts?

3) Where do you see yourself in 10-20 years? Pension Fund? Hedge Fund? Satrt your own PE shop?

Appreciated guy

Aug 20, 2013

(1) I worked at a Canadian bank before moving into private equity as an associate. In Canada, you shouldn't have any issue getting private equity interviews if you've worked in investment banking at one of the major Canadian banks. After you get the interview, your candidacy is largely determined by your interviewing ability rather than where you worked at.

(2) In Canada, in your first year in private equity, the general rule of thumb is that: (a) you'll make ~$150k at a pension fund; (b) you'll make ~$200k at a mid-cap private equity fund; and (c) you'll make $250k+ at Onex. The number of hours you work also have a close correlation with your compensation. I wouldn't worry about the tax rate because you'll end up paying similar tax rates in NY or SF.

(3) In Canada, a lot of funds give you the flexibility to stick around after your two years in private equity (vs. the two and out model in the U.S.). I'm really happy in my current role, I shadow on portfolio company boards and lead various work streams when evaluating investment opportunities so for the near-term, definitely happy to stick around and continue learning.

Aug 19, 2013

Why exactly did you pick the thread title "Ask me anything"?

Aug 19, 2013

1) Can you talk a bit more about your path and how you initially got into IB from a non-target (especially considering this was four years ago)?

2) Why the jump to PE (rather than HF or anything else in finance), and why in Canada?

You need to understand that a good firm, a profitable firm, and an attractive stock investment can be 3 unrelated things. -Epicurean Dealmaker

Aug 20, 2013

(1) I had good grades in school, strong extracurricular experience, networked with investment bankers in Toronto and followed the industry closely to demonstrate interest. I think the template to get into investment banking is fairly straightforward if you can tick all the boxes they're looking for.

(2) I grew up in Toronto and wanted to stay in Toronto because of family. While I wanted something on the investing side of things, I also wanted to do a deeper dive into the operations of a company. Particularly when you deal with a portfolio company on a weekly basis, you really develop a better understanding of the various corporate functions, the day to day role of c-level execs and how a business runs (vs. on a superficial level outside looking in).

Aug 19, 2013
CRE:

@bear396:

1. How many moose do you see on a per-week and per-annum basis? What is considered "high" moose-flow and "low" moose-flow?

2. How invested in maple syrup is your fund and what is your syrup brand acquisition strategy? Do you diversify with non-Canadian syrup at the risk of bad PR?

3. Do you pronounce "Leveraged Buyout" in the same way you pronounce "About?" So...like "Leveraged Buyooot?"

...these were serious questions

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Aug 20, 2013

To build on question #2,

What were the economic effects you observed from the great maple syrup heist of 2012?
Was your company negatively impacted in any of your maple syrup positions because of this?

Aug 21, 2013

Hey!!!
I have had at 3 consulting internships (F100 Strategy, and a global strategy consulting firm non-mbb) and an audit internship at pwc.
smoehow i ended up at those places but what ive really wanted to do is investmetn banking.
I have a BA from McGill in econ and math but from what ive seen canadian banks love bcoms.
would that be a huge problem?

hello.

Aug 22, 2013

What's the deal with OMERS? i heard you can make mad money there, similar to Onex

Aug 22, 2013
James77:

What's the deal with OMERS? i heard you can make mad money there, similar to Onex

I find that hard to believe, given it's a pension fund...

Aug 26, 2013
mrb87:
James77:

What's the deal with OMERS? i heard you can make mad money there, similar to Onex

I find that hard to believe, given it's a pension fund...

I understand where you're coming from, but I've seen first hand people make some seriously decent money there (high ups obvs), but this is Canada we're talking about

Sep 21, 2013

I imagine you probably interviewed with more than one PE shop (be it pension or independent) before you accepted the offer with your firm. So maybe you can talk about the kind of questions you got asked? Or the kind of case studies or technicals you got. I've heard Onex's questions can be quite tough, while at some pensions, the initial rounds are much more fit-focused.

How did you prepare for your interviews, and suggestions for people prepping for interviews with Canadian PE firms/groups?

Oct 7, 2013

bump

Mar 2, 2015

I am wondering. How is PE able to really attract anyone when the hours are the same as I banking in canada AND there is no carry? What exactly is the draw here? And aren't the pension fund asset managers guys earning equal pay if not more? What exactly would be the draw to work at a Canadian PE firm? For instance, Nigel Wright is earning 2 million a year as a DIRECTOR in Onex, the largest PE firm in canada, just 2 steps down or so from CEO (who earned 90 million). Don't get me wrong 2 million is GOOD money. But I'd be a bit disappointed to be the director of the largest PE firm in the nation in its largest city and be halling just 2 million. Compare that to alot of guys in Asset Management who are earning the same if not more with less experience or in smaller funds. Also why is there such a giant gap in salary between the CEO (90 million highest in canada) and the director (2 million). How is that kind of salary even justified when the workers immediately beneath you are earning so (comparatively) little? I mean I know usually you increase your salary alot as you move up the chain but going from 2 million to 90 million???

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Mar 2, 2015

The CEO of Onex is also its founder so he probably owns a significant portion of the firm.

Apr 1, 2018

bump. I would like to know more in case you are still following this thread.

I am in a developing country right now with immigration to Canada in progress. I am targeting PE in Canada. I am also planning to do MBA part-time in Canada. May I know more about interview styles and questions you are likely to get.

I have 5 years of experience in Corporate Financial Advisory so I am well-versed with financial models, business valuations, due diligence. Is there any chance I will be able to secure an interview there in PE shops?

May 16, 2018

Honestly speaking, it's Going to be an uphill battle to get into PE with that background. There aren't many post-MBA PE roles in Canada. CPPIB occasionally hires post-MBA but these days they more often than not look at people coming from top US programs (e.g. HBS, Wharton, Booth, Kellogg, Columbia, etc). I'm also too lazy to retype what I wrote in another thread, but long story short emerging markets/developing world experience is less valued in Canada because the PE teams here are typically focused on North American deals. EM/developed experience might be more appreciated in some of the Canadian pension PE teams that are based in Europe or Asia where you may get more international flavor.

I wouldn't want to discourage anyone from applying and networking (because you never know), but go in knowing that you are not the typical checks-the-usual boxes candidate and you'll likely need to do a lot of networking and leg work to get an interview and can't rely on just applying for the roles.

Apr 1, 2018

Bump. Are pension funds (obviously not PE firms like Onex) receptive to corporate bankers?

May 16, 2018

Generally speaking, the pensions (particularly the big ones - CPPIB, OTPP, OMERS) still primarily look at people with IB, consulting and sometimes accounting + corporate finance backgrounds. Never say never because it's possibly they might consider corporate banking backgrounds, but more often than not it's the above mentioned backgrounds.

It might be good to check out debt focused teams (like the Principal Credit team at CPPIB or the Private Debt team at PSP) if you're coming from CB. You might have more exposure to credit and have a relevant, marketable skill set for those roles in particular.

May 16, 2018

Any insight on comp at the different levels in pensions? base/bonus

Aug 5, 2018
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Aug 5, 2018