Finance Lingo - PE associates and above tell me your honest opinion

PE professionals,
when you talk to a candidate who is in banking during an interview, and they start using banking lingo (e.g. north of 10x multiple / L+550 zip code etc.) do you think they are being professional or do you think they are just trying hard and it is fucking annoying?

personally the latter but was just wondering if im the only one who hates all these fucks

 

Maybe I'll get shit on for this, but in an interview setting, regardless of whether it's for a junior or mid-level position, candidates should know the numbers cold and be able to speak to them confidently and without jargon. When I hear the jargon I tend to immediately think they are BSing or didn't take the requisite time studying their deals to prepare. Obviously there are questions/topics that necessitate speaking in ranges or high level but if you're being asked about deal specifics you should know the numbers without question.

 

I think abbreviating them is fine. But when you start using some highly specific terms is when the interviewer starts to shine a brighter spotlight on you.

A good advice is only use terms/abbreviation when you absolutely sure what it is. Don't make a rookie mistake of trying to bullshit your way through an interview (rarely ever works esp against your potential superiors)

 

One thing I hate when interviewing folks at the junior level is when they use an obscure acronym that only applies to the small tranche of deals that they happen to be familiar with at this point in their career (I recently had a kid referencing some 3 letter abbreviations used in the shipping industry for example, which I know nothing about). Broad finance abbreviations are great, don't say Earning Before Interest, Taxes, Depreciation and Amortization, say EBITDA for a ridiculous example.

--$$--
 

If it's used correctly and naturally, it's fine. Won't earn much in the way of style points but I appreciate it if it helps the discussion flow smoothly.

...but it really, really needs to be used correctly and naturally.

"Son, life is hard. But it's harder if you're stupid." - my dad
 

I don't understand, as that's how people speak to both of your examples in banking and PE...

Do you expect people to say "the valuation was well over 10 times the Company's total enterprise value divided by earnings before interest, taxes, depreciation and amortization?"

Who cares if someone says "L+550" rather than "a rate equal to five hundred and fifty basis points above the London interbank offered rate."

Is there something I'm missing, here? Are you just saying if it sounds forced?

 

In general I'm fine with it as long as you aren't purposefully trying to use lingo to make it sound like you're more knowledgeable than you are. Trust me, I'll know. Things that are misused, sound forced, etc. If it's just like me having a conversation with my MD then I'll wonder how you got so immersed in the culture so quickly, but I'm not going to ding you for it.

 
Prospect in IB-M&A:
PE professionals, when you talk to a candidate who is in banking during an interview, and they start using banking lingo (e.g. north of 10x multiple / L+550 zip code etc.) do you think they are being professional or do you think they are just trying hard and it is fucking annoying?

personally the latter but was just wondering if im the only one who hates all these fucks

Why you hating?

 

Why would you hate on someone saying "North of 10x"?

I'm a deal junky and I always talk in multiples e.g. "Yeah, got the deal for 6x, put on like 2.5x of debt, 0.5x of equity and convinced the owner to put 3x as an earnout".

I find that people that talk using multiples are people that actually have had some deal reps - cause, tbh the most important part is what multiple you buying and what's your debt multiple. The cucks are the one using fancy consulting buzzwords and shit like "60% debt to equity,".

Also regarding rates.. its pretty standard to say something like L+5.5 and a 7year amort. Only nerds are aware of the daily libor rate.

 
takenotes08:
"Yeah, got the deal for 6x, put on like 2.5x of debt, 0.5x of equity and convinced the owner to put 3x as an earnout".
takenotes08:
0.5x of equity

...tell me more about this fabulous deal structure

"Son, life is hard. But it's harder if you're stupid." - my dad
 

I've read The Art of the Deal twice and watch the original Wall Street every Thursday evening. I also have an extensive workout and skincare routine that I do on a daily basis to prepare myself for my day. All of these lead to better deal flow.

..

I just do deals in a small niche market where sellers dont have that many exit options.. kinda too small for PE and too big for individuals to easily buy without the right backing.

 

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