6/30/16

Private Equity Associate

There's a perception of people on the street that private equity is the cream of the crop. The hours, the pay, the beloved carry, the work itself - is it all greener grass syndrome? Not quite, private equity is pretty awesome by most standards; that's why becoming a private equity associate is ten times more difficult than becoming an investment banking analyst. Luckily, everything you need to know is right here.

Private Equity Associate - What Do They Do?

PE associates' days are primarily spent on a few different things. Here's a day in the life of a PE from @samoanboy. If you want to skip ahead of this quote, there's a nice summary of what they spend their time directly below.

Day in the Life

As previously mentioned, I spend a lot of time out of the office, but a standard office day would be as follows. (This is based on last Friday.)

8:00 am - 8:30 am Arrive in the office, read emails that came in overnight from Asia / US, try to follow-up with people in HK / BJ ASAP before they head home for the day.

8:30 am - 9:00 am Skim through FT, WSJ, Bloomberg, etc., to see if there is anything interesting on any of our underlying portfolio companies.

9:00 am - 9:45 am Call with CFO of one of our GPs to discuss co-invest opportunity in a med tech company. Go step-by-step through their models, question their assumptions, and compare with my initial model - usually my earnings growth estimates are significantly more conservative, and I need to be 'up-sold'.

9:45 am - 10:00 am Discuss call with one of our principles. We both feel that we have plenty of healthcare in the portfolio, and this doesn't pass our >3x MOIC for serious consideration of a co-invest.

10:00 am - 11:00 am Managing Partner of a Indian Mezz Fund who is raising $250m comes in to talk us through the proposal. Past funds have done well, but we have significant concerns about the risk/reward for EM mezz. Meeting focuses on quality of management in these businesses and their disinclination to give away sizable equity stakes.

11:00 am - 12:00 pm Writing up some meeting notes from earlier in the week and sending a few post-meeting DD emails.

12:30 - 14:00 pm Lunch presentation at a hotel from one of the US megafunds currently raising $8bn. I hate the strategy, the lack of decent exits, and the fact that these businesses are highly skilled marketers rather than highly skilled investors. We won't invest, but it's good to know what the competitors are looking at. Megafunds are good for people like CALPERS who need to write $500m cheques and investors who rely on consultants for their DD, but for more niche / adventurous players, they are not very exciting.

14:30 - 15:00 pm Internal meeting to look at our pipeline and discuss travel arrangements. We have three LP meetings in one week in NYC in two weeks time, and I'll be attending. I always enjoy traveling, but these meetings will be exhausting.

15:00 - 16:00 pm Reference calls with existing investors in a fund that is about to have its final close. These are probably the best way of getting to know a new manager. On this occasion, no new issues arise, and we will proceed with our legal review.

16:00 - 18:00 pm Emails, meeting notes, bit of modeling, but it's Friday, so I'm concentrating on the weekend rather than the work. Leave at 6 pm and drink for the rest of the weekend.

Here's what a typical PE associate spends their time on, again from @samoanboy.

Primary Fund Due Diligence / modeling / meetings / reference calls / legals - 50%
Annual LP meetings / traveling to meet FMs - 20%
Coinvests / Secondaries opps analysis - 25%
Boring admin shit - 5%

How to Become a PE Associate

Before we tell you anything else, understand that private equity recruiting is far, far more difficult than investment banking. In order to get into private equity, it's nearly a necessity to have done investment banking. There are two main avenues to landing interviews for the associate position. They are:

  1. Impressing a headhunter who connects you with the firm for an interview
  2. Networking with PE firms to land an interview

Option 1 is for people currently in investment banking if they want to break into private equity. It is by far the simplest and most effective way to land interviews while you're in investment banking and pre-MBA. Option 2 is what most people do while getting their MBAs. Acing the interview is another question.

Joining Private Equity from Investment Banking

Private equity recruiting for investment banking analysts is on-cycle, meaning recruiting is a very mechanical process that starts a few months into your first year. Joining PE from investment banking is best done with a headhunter.

Think you can avoid this process as an investment banking analyst? Think again. Here's a tidbit from @I Invest about the path from investment banking to private equity.

The street and recruiting process are structured in this manner. Headhunters sift through IB analysts (primarily) and work with PE shops to hire IB analysts after their 2-3 year program. This question is almost like asking, "Why do people do internships to get into IB?" It's simply how the system works at the present moment. The primary avenue to PE is IB.

So hopefully you understand how integral headhunters are to the process. Here's everything you need to know about your relationships with headhunters, summarized beautifully by @Candor. It's long, but it's worth the read.

Headhunters - Everything You Need to Know

Plain and simple, everything starts with the headhunters. They are the gatekeepers to basically every interview process and are incredibly important. If you work at a BB or an elite boutique, the headhunters will begin reaching out to you in October / November. You do not need to email them before you start working or anything like that - it'll serve you no benefit and will only hurt you in the process. They'll reach out to you.

With that said, I have a funky email address that includes my middle initial, so when all of my peers received the messages from Dynamics/CPI/Amity/Glocap/etc., I did not. This sucks, but just have one of your coworkers forward you the email they received. It is perfectly fine if they haven't emailed you, and I'm sure they'll be more than happy to speak with you if you email them introducing yourself and asking to meet in person.

There are a few important points to note with these headhunter interviews. First and foremost, you only get one shot at meeting/impressing them and proving that you'll be capable of going through PE/HF recruiting and being in front of their clients. Treat these initial interviews as you would any other important interview. I see people on here saying, "Ah yeah, the headhunter meetings don't matter much." This is the wrong attitude. Unless you're at BX/other top groups, you absolutely have to come off polished when you meet with them.

I prepped for these meetings like I was prepping for a first round interview. They'll ask you to walk them through your resume, what you're looking for, why PE or why HF, where do you want to work, what kind of funds are you targeting, what are some names you're targeting, things like that.

One of the ways I think you can differentiate yourself here is knowing EXACTLY what you're looking for. If you can name specific funds and why (e.g., Is it their specific strategy? Is it because you worked on a deal with them? Do you know somebody there? Did somebody from your group go there? Is their head of C&R/Healthcare/Tech investing really well known? etc.), it'll help you immensely. I think I got interviews at a few places because I specifically listed those firms as firms offering what I could consider a dream opportunity.

If you have a deal on your private equity resume, expect for some of the headhunters that are former bankers (e.g. CPI, Glocap, HSP) to ask you to walk through the deal. I had kids in my group not prepared for these meetings and get sort of grilled (CPI did this) and not receive any interviews from that respective headhunter, while I received multiple interviews because I came prepared.

You can't come off wishy-washy here. You need to know that you're either doing HF or PE, what size fund (i.e., middle market/large cap/MF/lower middle market/growth equity), where, and why. You can tell different recruiters different things (i.e. tell one you want PE, another you want HF), but unless you're at a top group that consistently sends people to MFs/top HFs, then you need to know what you want.

Another thing I'd like to note is that, while the headhunters are the middle men in the process, you also play an important role, and it is in their best interest to meet as many candidates as possible to try to place as many people as possible. That's how they get paid. They understand that you're a banker and there are a lot of demands on your time/life. It is perfectly reasonable to wait to respond to their introductory emails several weeks (or months) later to make sure you're ready.

I waited until December to meet with the headhunters, and I was fine. If you need to cancel and reschedule, that's fine too so long as you do it professionally. If you know one week you're going to be getting crushed and you have a headhunter meeting scheduled for 8:00 am that Wednesday, email them and ask to reschedule; they understand. Just don't do this several times.

Lastly, not all headhunters are created equally. Some of them, for whatever reason, just won't click with you, which sucks but it is what it is. Some of them are just dicks and aren't worth your time. I had a particularly awful meeting with one of the recruiters at SearchOne where the person essentially told me I was an idiot and I didn't understand the size distinctions between PE firms. Jokes on them, I got 3 offers in PE despite "not knowing what it is".

I would try to put all of that information into a concise paragraph, but the truth is all of the above is too valuable to skip over.

Getting into Private Equity During Business School

There's one magical word that is crucial in landing interviews with private equity firms while in business school: networking. Basically, private equity firms recruit at top B-Schools just like investment banking firms recruit at top undergrad universities. Take advantage of those recruiting opportunities and network, we assume because you have some investment banking experience (again, it's pretty much a prerequisite to PE), you have a decent understanding of networking.

Exit Opportunities

Private equity is seen by many as the endgame, but what about for those who don't feel that way. There are a number of common exit opportunities for those individuals:

  • Entrepreneurship
  • Other financial institutions (hedge funds, venture capital firms, etc.)
  • Portfolio company

That's not all there is to it, however. Here are some thoughts from @lolercoasterrr regarding exit opportunities after private equity.

So I am one of these junior ex-PE guys and know a bunch of colleagues who have left. Pretty much spot on what's been said. A few just move around to different PE firms. Several do really cool corp dev gigs in industries they love (e.g. sports or entertainment). A large number (including myself) go to b-school. After b-school people either usually go back to their old shop, another PE shop, into a structured "MBA corp dev" program (e.g. an oil and gas company, cargill), a privately sourced corp dev opportunity, or more commonly nowadays - a startup. I've seen a lot of guys go into biz ops or strategy roles at fast growing startups. I've seen some go into consulting (MBB) post-MBA, too, but those are less common and I don't know the rationale.

Compensation

Private equity compensation is something best answered in an entirely thorough manner. Of course, you probably want to skip to the fun part and check out the total compensation, so keep reading.

First, understand that there are several factors that determine compensation for PE associates - carry (if any), different bonuses, and base. Before that, we'll tell you what you really want to hear about - total compensation. All in, an associate can expect to make $200-250k.

Base compensation is a little above what you'll find in investment banking, something north of $100k.

Private Equity Associate vs Investment Banking Associate

Why go through the hassle of private equity recruiting opposed to trying to become an associate at the investment banking firm you work at? Here's an answer to this question from @I Invest.

There are a boatload of reasons why people leave IB. It's a tough gig as a junior. Committing to do the A to A thing is basically accepting 6.5 years of a rough lifestyle. I honestly think most people recruit for buy-side because most people recruit for buy-side. However, people do leave the IB role for other opportunities (b-school, corp dev, etc.).

The biggest attraction to leveraging a junior IB role for two to three years is that you're essentially placing yourself on a platform where you can exit into almost any industry. There might not be another time in your career where you can essentially exit a job and do almost anything. I spent three years at a top group at a BB. I honestly felt like I could have recruited for almost any role I desired (PE, HF, VC, Startup, F500, etc.). Now that I've decided on PE, I don't necessarily feel that way. For example, if you move to a distressed hedge fund, you're a distressed hedge fund guy. You might have a hard time recruiting for an equities event driven fund. As an IB analyst, you could recruit for both easily.

A lot of you are probably thinking, yeah alright, but which pays better guy? First of all, that's the wrong attitude, buddy. Second, while the pay at junior levels between private equity and investment banking is comparable, as you move up the ladder, it's likely you'll make more in private equity because of carry.

Here's a nice summary of the pay differences between the two types of firms, courtesy of @I Invest.

Further in your career, especially at a successful performing fund (stress on the word successful), you should make more money as a Partner at a PE firm versus being an MD in banking. It's hard to beat meaningful carry at a successful performing fund. As a junior, the biggest misconception on this forum and across the street is that pay is better at the junior level. Yes, if you attain an Associate role at Apollo, you will make bank relative to staying on your IB track. However, in most cases, I would say the pay is very comparable, especially with the increase in IB pay across the street over the last year or so. The difference for most people will be nickels and dimes (I don't mean 5 cents and 10 cents literally, talking thousands), which after tax isn't particularly meaningful at all.

I'm a first year PE associate and my best friend is a first year IB associate (A to A promote). I'm willing to bet all in the difference between our pay won't even be worth a discussion. Again, I think this is the norm. However, yes, at a mega PE shop (e.g. Apollo, BX, etc.), I would expect the pay difference to be more meaningful at the junior level.

PE Associate Hours

What are the hours like in private equity and how do they compare to investment banking? Generally, the hours are less grueling than in investment banking, but don't let that fool you - you're still putting in time. Here's an anecdote from @I Invest on what he's seen on the street.

In most cases, all my friends (who went from investment banking to private equity) now have better hours. The exception is my one or two colleagues who went to the mega shops. I would say the mega shop colleagues actually have worse hours than IB!

Let me be clear by what "better" means though. This forum tends to have a misconception of the "better hours" theme. I still work hard. It's a job in high finance. I believe the better hours really are a result of more autonomy and my work not being client driven. I have more control over the timing so I can manage life better. No more of the surprise 8 pm deck that needs to get done for a client by tomorrow afternoon to discuss the mega deal that will never happen.

At smaller firms, you can expect 60-70 hours opposed to the typical 80 hour week in investment banking. At megafunds, expect 80 hours a week.

All of this goes out the window when you're working on a deal. In those weeks, expect to put in hectic hours, north of 80 hours.

Original Thread - How to make VP in Private Equity

A few weeks ago, I shut down my ThinkPad for the last time, turned in my security badge, and said farewell to my colleagues - and to PE and private equity interviews. I found myself in a position in which many private equity associates find themselves every summer: thanked for my efforts, praised for my "excellent work as an associate," but ultimately admonished that there wasn't a "path to VP for me," and it was time to move on. Such is life.

Nice as it might have been, the senior ranks of private equity probably weren't a long term fit for me. But while it might not have been a fit for me, I know that is not the case for many on this board - securing a slot as a VP en route to partner at an established PE fund is that holiest of holy grails.

In that vein, I thought I'd offer a few tips on making the transition, given that I've seen a lot of advice on how to break into PE, but not a lot of advice about how to stay there. I may have not made the cut myself, but after going through the process, I think I have a pretty solid idea of what it takes. This is tailored to a private equity associate, but a lot of it applies to just about any situation where you are trying to make the leap from junior guy to senior manager - investment banking, corporate development - wherever. So let's get to it.

You first need to understand exactly what being a VP entails. It doesn't just mean less time in Excel, more time on the phone, and a little more responsibility. It's a fundamentally different job with a fundamentally different skill set. This is the core reason why most associates never make it to VP. Associate work is about analytics, modeling, presentation building, and data room plowing. The VP position is the first step towards what private equity is really all about: convincing other people you know what you are doing.

Senior partners need to convince LPs they know what they are doing, so the LPs will give them money. Junior partners need to convince business owners they know what they are doing, so the business owners will sell them their businesses. And VPs need to convince the senior folks that they know what they are doing, so the senior folks will trust them to manage a deal. So how does one go about becoming a convincing guy and not just a numbers monkey?

1. Work on your presentation skills. The ability to express ideas clearly, succinctly, and in a manner that is "confidence inspiring" is without a doubt one of the most important attributes of a successful senior PE professional (and any executive for that matter). I've seen a lot of senior guys in PE with mediocre technical skills succeed because they were really slick presenters and could talk their way through any conference call or meeting. I haven't really seen it the other way around.

2. Start speaking up more often. The prevailing attitude in IB may be that an analyst is better seen than heard, but that's not the case in private equity. Don't just bang out models and then rely on those above you to present all the results to the investment committee. Similarly, don't just sit through diligence meetings only to take notes.

Now, you'll have to use some discretion as to when and how often you speak up. Don't show up day one and try to lead an investment committee review or hi-jack a diligence session. Start small. Ask a few (good) questions in diligence sessions. Chime in with a few interesting points you picked up on customer calls during investment committee. As you build confidence and rapport, start increasing your air time. By the close of your second year as an associate, ideally you will be presenting decent-sized pieces of your investment memo / model / analysis to the senior partners, leading some of the more technical conference calls (e.g. walking through a revenue build with management), and offering some intelligent reasons why a particular investment does or doesn't make sense in group meetings.

3. Develop a healthy respect for yourself and your role at the firm. As an investment banking analyst, you were at the bottom of the totem pole and were treated as the lowest of the low. Nobody gave a fuck about your time, your schedule, your needs, or your opinions. You were there to serve others, period.

This kind of treatment day in and day out can start to have a perverse effect on your thinking. You start thinking that "the firm's" needs are more important than yours, people above you are "better" than you, their time is more valuable, and you should do everything to please them at all costs. While this may work as a junior guy, it isn't going to get you to the next level. Your partners need to have a modicum of respect for you before they promote you. So stop walking on eggshells and sweating every time the higher-ups pass by. Start walking around the office like you belong there.

Participate in conversations with the conviction that you have something valuable to contribute. If you think your deal team needs to take an analysis in a different direction, let them know. If a good deal comes down the pipe, ask to be put on it. If you're getting a bunch of bullshit projects or feel you are not getting the kind of experience you want, speak up (tactfully of course). This may seem crazy at first, but try it. You'll be surprised at how differently people will treat you (and how much better you'll feel about yourself).

4. Separate the work from the people asking you to do the work. Given you work in high finance, the probability is pretty high that you are working (or are going to work) with assholes. Don't let this affect your work. You are a professional. You get the job done no matter the person in charge or the bullshit thrown your way.

Approach your work the same way Navy SEALs do. They don't care who is in the White House giving the orders - once the orders come in, the SEALs focus on the job and nothing else. You should do the same. If you have a legitimate gripe, take it up directly with the relevant person. But don't sit around complaining and bitching.

5. Find your niche. A good way to ensure the senior guys keep you around is to make yourself needed. Have you worked on a bunch of debt deals for tech companies? You are the guy to get financing packages for any tech deal that comes down the pipe. Worked through multiple 338(h)(10) deals? Be the tax structuring guru. Lots of experience with oil and gas? You are the oil and gas guy.

Take the hand you are dealt and turn it into a defensible niche. Build relationships with key guys in the space (bankers, consultants, research guys, industry guys), stay on top of what's going on in your area (market trends, M&A activity, tax law changes), and make everyone aware you're there to help or take the lead when the time comes.

6. Start acting like an independent operator. As an associate, you typically have people telling you what to do: build this model, look at this document, put together this presentation. You need to start learning how to make moves yourself. Build general relationships (go to lunch with bankers and industry guys), think about how to add value to your portfolio companies (float your ideas by the deal team and bring it up at the board meetings if possible), develop direct relationships with management at your portfolio companies, think about different approaches to deal structuring issues, and come up with investment ideas. Basically, think about what needs to get done in order to successfully enter, hold, and exit deals, and do it without having to have someone come and tell you exactly what to do. This will go a long way towards distinguishing you from the run-of-the-mill associates and getting you closer to that VP title.

There are, of course, more tips out there but these are the most relevant in my opinion. The transition to VP is a tough nut to crack, but if you do these things and there are not structural barriers in place (like the firm has a very strict two and out policy), you should at least have a fighting chance at VP.

Best of luck, fellow monkeys.

Interested in Private Equity - Here's What You Need to Break In

Private equity is recruiting is ten times more cut-throat than anything you've ever experienced before. If you want to break into private equity, you need to be well-practiced in the technical aspects of the interview. The package is worth well more than the $299 price; the job prospects you set yourself up for are worth far more than $299.

PE Interview Course Here

Comments (92)

7/15/13

Thanks for a solid writeup.

I would be interested to hear where you think you might have tripped up within the 1-6 you listed above. Also, what's next for you?

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

Private Equity Interview Course

12/1/17

Lol MultipleExpansion.com only costs Free-99.

Save your money and use the free resources monkeys.

7/15/13

Great post

7/15/13

SB'd you. Nice write up. Also would like to hear what you'll be doing next. I'm a third year IB analyst and most likely not going to go the PE route.

People tend to think life is a race with other people. They don't realize that every moment they spend sprinting towards the finish line is a moment they lose permanently, and a moment closer to their death.

7/15/13

i was looking for something for the afternoon homepage slot and this fell into my lap... wow good stuff, thanks

WSO's COO (Chief Operating Orangutan) | My story | My Linkedin

7/29/13

nm

7/15/13

sb, one of the most practical of recent posts.
thank you,

If the glove don't fit, you must acquit!

7/15/13

Excellent material about making the next step. Thanks labanker.

PE is the new black.

7/15/13

Great write-up. Thank you for sharing your view on how to make the next transition for people who are already in PE.

7/15/13

duffmt6:

Thanks for a solid writeup.

I would be interested to hear where you think you might have tripped up within the 1-6 you listed above. Also, what's next for you?

Really all 1-6 to an extent. I came in thinking that if I built great models, always had bulletproof numbers, and tore up data rooms that I'd be heralded as a great associate and be well on my way to the next level. I didn't really give presentation skills and "speaking up" a second thought. Not a good move. After sitting through multiple investment committee meetings, staff meetings, and portfolio company board meetings, I started to realize how important solid verbal communication really was, as the senior guys would often base their entire assessment of people solely on how effectively they presented. Not helping matters was the fact that I basically went deer in the headlights during a staff meeting when put on the spot to present something I wasn't expecting to present. Thus for the first time in my life, I developed a fear of public speaking. I think I worked through the issue reasonably well (I got flagged for weak presentation skills in my first review but had no issues in subsequent reviews after specifically working on it) but there's no question it set me back.

I think #3 really hurt me as well. I kind of had this "I am not worthy" attitude - I put the senior guys on this pedestal and was desperately afraid of letting them down. So while I always got pats on the head and good bonuses come review time, I don't think the senior guys ever really respected me. It was only towards the end that I realized (i) that the senior guys are just ordinary dudes and often knew less about what they were saying than I did and (ii) giving someone enough power over you that your heart races anytime they come around is no way to live.

I was reasonably decent at #4. While there were times I'd sit and stew in my office after getting some stupid assignment, I took pride in my work and did my best to ensure that any work product with my name on it was done right and done on time.

By the time I realized I really needed to be implementing #5 and #6 and not just concerning myself with models and decks, my interest in the whole PE thing was starting to wane. That's a problem because you really need to be jazzed up about the job to give #5 and #6 a serious go.

So what am I doing now? I figured that since I like screwing around with models in Excel so much, maybe I should do something similar for a living, but on a grander scale. Thus crazy as it sounds, I'm going to be joining a programming bootcamp (http://refactoru.com/) come September to see if I can try my hand at software development (I've also been dabbling in programming on the side). The thought is to work for someone else as a developer for awhile, then maybe try my own thing down the road. We'll see.

11/22/13

labanker:

I think #3 really hurt me as well. I kind of had this "I am not worthy" attitude - I put the senior guys on this pedestal and was desperately afraid of letting them down. So while I always got pats on the head and good bonuses come review time, I don't think the senior guys ever really respected me. It was only towards the end that I realized (i) that the senior guys are just ordinary dudes and often knew less about what they were saying than I did and (ii) giving someone enough power over you that your heart races anytime they come around is no way to live.


This is a phenomenal observation. One of the biggest mistakes I made early in my career was giving respect to people that, as I discovered later, really did not deserve it. This is a huge problem in finance because it draws the most driven, but not necessarily the smartest, folks. That Associate/VP/Director may be able to talk the talk, but when it comes to making educated business decisions, he/she may be at a loss. I guess what it boils down to is whether you want to be in a middle management position where those sorts of attributes are valued? Or would you rather subject yourself to the consequences of the real world and become a principal yourself?
4/30/14

Great post. I hear you on the presenting aspect. I am currently an Analyst and HATE presenting. I joined Toastmasters a little while ago (though hard to commit to with work hours). Definitely helps - we'll see where it can lead.

10/18/17
labanker:
duffmt6:

Thanks for a solid writeup.

I would be interested to hear where you think you might have tripped up within the 1-6 you listed above. Also, what's next for you?

Really all 1-6 to an extent. I came in thinking that if I built great models, always had bulletproof numbers, and tore up data rooms that I'd be heralded as a great associate and be well on my way to the next level. I didn't really give presentation skills and "speaking up" a second thought. Not a good move. After sitting through multiple investment committee meetings, staff meetings, and portfolio company board meetings, I started to realize how important solid verbal communication really was, as the senior guys would often base their entire assessment of people solely on how effectively they presented. Not helping matters was the fact that I basically went deer in the headlights during a staff meeting when put on the spot to present something I wasn't expecting to present. Thus for the first time in my life, I developed a fear of public speaking. I think I worked through the issue reasonably well (I got flagged for weak presentation skills in my first review but had no issues in subsequent reviews after specifically working on it) but there's no question it set me back.

I think #3 really hurt me as well. I kind of had this "I am not worthy" attitude - I put the senior guys on this pedestal and was desperately afraid of letting them down. So while I always got pats on the head and good bonuses come review time, I don't think the senior guys ever really respected me. It was only towards the end that I realized (i) that the senior guys are just ordinary dudes and often knew less about what they were saying than I did and (ii) giving someone enough power over you that your heart races anytime they come around is no way to live.

I was reasonably decent at #4. While there were times I'd sit and stew in my office after getting some stupid assignment, I took pride in my work and did my best to ensure that any work product with my name on it was done right and done on time.

By the time I realized I really needed to be implementing #5 and #6 and not just concerning myself with models and decks, my interest in the whole PE thing was starting to wane. That's a problem because you really need to be jazzed up about the job to give #5 and #6 a serious go.

So what am I doing now? I figured that since I like screwing around with models in Excel so much, maybe I should do something similar for a living, but on a grander scale. Thus crazy as it sounds, I'm going to be joining a programming bootcamp (http://refactoru.com/)come September to see if I can try my hand at software development (I've also been dabbling in programming on the side). The thought is to work for someone else as a developer for awhile, then maybe try my own thing down the road. We'll see.

How did you develop your speaking / presentation skills? I'm a 1st yr associate and a lot of emphasis is placed on being vocal, sharing my opinion, and presenting findings/analysis etc. I'm not the most articulate speaker in group settings or when put on the spot for anything longer than a few comments, so curious to see if you (or anyone else) has any advice outside of just getting in reps.

"If it were easy, everyone would do it"

10/19/17

My issues stemmed mostly from anxiety. When I'm not anxious I'm actually a pretty good speaker and have no problem conveying my thoughts, so the battle for me was getting my anxiety under control. Ultimately what helped me the most was cognitive behavior therapy. I picked up a book on the subject and worked through the techniques.

If your issues stem from anxiety like mine, I'd recommend a similar approach. If you aren't nervous and it's more a matter of articulating your thoughts clearly, I think practicing via something like Toastmasters would help a lot. In addition to that I'd suggest the following:

  • Realize that you don't have to know everything or have all the facts in order to speak up. Your senior guys don't. Just make sure what you're saying is directionally correct. Most of what is said in group meetings is speculation anyways.
  • Don't worry about trying to always have some brilliant insight. Just say what you think. If the company has good cash flow say "I like the cash flow profile." If the company only has two customers, say "I'm worried about customer concentration." Don't overcomplicate things.
  • If someone puts you on the spot, don't be afraid to pause before your respond. Give it a good five seconds. This will seem like an eternity of silence but it conveys confidence and you can use it to buy yourself time. Grab one or two general points and then work through them out loud.

Hope that helps.

12/1/17

This is spot on and what I have to remind myself constantly. +1

7/15/13

Is that not a waste of your experience? Unless you are genuinely dissatisfied with PE then I would not go down the Software Development route.

No matter what you do, you will one day break into a management role. For some, it happens in their 20s, for most, in their 30s, and nobody remains in an Analyst role in their 40s.

Ergo, going into software won't avoid you the eventual obstacle of having to assert leadership. You're already on the cusp of breaking into the management level in banking. Going into software development will only delay this inevitability of having to overcome your weakness.

I think shrugging off the challenge as you appear to be doing is the worst thing you could possibly do. Man up. If you are bored with PE, you probably already know there are a multitude of options available to you anywhere in the Financial Services industry that you could pursue.

7/15/13

+1, solid post

7/15/13

Great post! Thanks for sharing man! +1 SB

7/15/13

Isn't another obstacle to advancement that PE firms are completely flooded with mid-level people and fund sizes aren't going up? I'm sure even people who did pretty well on the items mentioned above are finding themselves offer-less...As I'm not at this level yet, and don't know for sure, please let me know if that's the case.

7/15/13

Pretty astute observation if you are not at this level, though keep in mind there are outliers out there like Marlin that tore the cover off their fundraising efforts recently:
http://www.pehub.com/2013/04/11/marlin-equity-part...

7/15/13

care to expound on what your future plans are?

If the glove don't fit, you must acquit!

7/15/13

Great post.

7/15/13

labanker:

duffmt6:

Thanks for a solid writeup.

I would be interested to hear where you think you might have tripped up within the 1-6 you listed above. Also, what's next for you?

Really all 1-6 to an extent. I came in thinking that if I built great models, always had bulletproof numbers, and tore up data rooms that I'd be heralded as a great associate and be well on my way to the next level. I didn't really give presentation skills and "speaking up" a second thought. Not a good move. After sitting through multiple investment committee meetings, staff meetings, and portfolio company board meetings, I started to realize how important solid verbal communication really was, as the senior guys would often base their entire assessment of people solely on how effectively they presented. Not helping matters was the fact that I basically went deer in the headlights during a staff meeting when put on the spot to present something I wasn't expecting to present. Thus for the first time in my life, I developed a fear of public speaking. I think I worked through the issue reasonably well (I got flagged for weak presentation skills in my first review but had no issues in subsequent reviews after specifically working on it) but there's no question it set me back.

I think #3 really hurt me as well. I kind of had this "I am not worthy" attitude - I put the senior guys on this pedestal and was desperately afraid of letting them down. So while I always got pats on the head and good bonuses come review time, I don't think the senior guys ever really respected me. It was only towards the end that I realized (i) that the senior guys are just ordinary dudes and often knew less about what they were saying than I did and (ii) giving someone enough power over you that your heart races anytime they come around is no way to live.

I was reasonably decent at #4. While there were times I'd sit and stew in my office after getting some stupid assignment, I took pride in my work and did my best to ensure that any work product with my name on it was done right and done on time.

By the time I realized I really needed to be implementing #5 and #6 and not just concerning myself with models and decks, my interest in the whole PE thing was starting to wane. That's a problem because you really need to be jazzed up about the job to give #5 and #6 a serious go.

So what am I doing now? I figured that since I like screwing around with models in Excel so much, maybe I should do something similar for a living, but on a grander scale. Thus crazy as it sounds, I'm going to be joining a programming bootcamp (http://refactoru.com/) come September to see if I can try my hand at software development (I've also been dabbling in programming on the side). The thought is to work for someone else as a developer for awhile, then maybe try my own thing down the road. We'll see.

I wouldn't reccomend going into IT/Software engineering unless it's your passion...the kids who walk out of school into good jobs or even just regular programmers who get the good jobs genuinely love coding, the ones who don't generally dont make it too far, IMO

alpha currency trader wanna-be

7/15/13

highlylevered88:

Isn't another obstacle to advancement that PE firms are completely flooded with mid-level people and fund sizes aren't going up? I'm sure even people who did pretty well on the items mentioned above are finding themselves offer-less...As I'm not at this level yet, and don't know for sure, please let me know if that's the case.

Fund sizes have rebounded significantly. I've seen strong fundraising over the past quarter, despite weak M&A volume. However, part of the problem was the delay between funds IMO. Fundraising was atrocious from mid-2008 through 2011 (source: Preqin). So, you have a bunch of mid-level PE guys stuck with nowhere to go b/c new funds were put on hold and associates and post-MBAs looking for mid-level positions.

Supply vs. demand was/is certainly an issue from my perspective. Hopefully that will normalize if fundraising continues to remain strong, particularly in the MM.

7/15/13

Silver banana for you, sir.

7/16/13

thanks for the words of wisdom.

"...the art of good business, is being a good middle man, putting people togeather. It's all about honor and respect."

7/16/13

This is great. Thanks!

Read my blog: Bateman Begins

Private Equity Interview Course

7/16/13

labanker:

duffmt6:

Thanks for a solid writeup.

I would be interested to hear where you think you might have tripped up within the 1-6 you listed above. Also, what's next for you?

Really all 1-6 to an extent. I came in thinking that if I built great models, always had bulletproof numbers, and tore up data rooms that I'd be heralded as a great associate and be well on my way to the next level. I didn't really give presentation skills and "speaking up" a second thought. Not a good move. After sitting through multiple investment committee meetings, staff meetings, and portfolio company board meetings, I started to realize how important solid verbal communication really was, as the senior guys would often base their entire assessment of people solely on how effectively they presented. Not helping matters was the fact that I basically went deer in the headlights during a staff meeting when put on the spot to present something I wasn't expecting to present. Thus for the first time in my life, I developed a fear of public speaking. I think I worked through the issue reasonably well (I got flagged for weak presentation skills in my first review but had no issues in subsequent reviews after specifically working on it) but there's no question it set me back.

I think #3 really hurt me as well. I kind of had this "I am not worthy" attitude - I put the senior guys on this pedestal and was desperately afraid of letting them down. So while I always got pats on the head and good bonuses come review time, I don't think the senior guys ever really respected me. It was only towards the end that I realized (i) that the senior guys are just ordinary dudes and often knew less about what they were saying than I did and (ii) giving someone enough power over you that your heart races anytime they come around is no way to live.

I was reasonably decent at #4. While there were times I'd sit and stew in my office after getting some stupid assignment, I took pride in my work and did my best to ensure that any work product with my name on it was done right and done on time.

By the time I realized I really needed to be implementing #5 and #6 and not just concerning myself with models and decks, my interest in the whole PE thing was starting to wane. That's a problem because you really need to be jazzed up about the job to give #5 and #6 a serious go.


Thank you. Appreciate your candid responses.

Read my blog: Bateman Begins

7/16/13

I've been thinking about this a lot lately. I keep bumping into a VP for another IB firm in our building and I wonder, as a 1st year Analyst, how to best play my cards for longevity. Nicely articulated, sir. +1

Make opportunities. Not excuses.

7/16/13

'Preciate the honesty. Not always easy to be honest with oneself. +1 to you, good sir.

Everyone isn't made to be the same thing. Some folks don't want to be in sales roles. Be honest with yourself. It takes all types. At least you learned what you needed to learn. We should always be in a position to either earn or learn. #cantlose

I think all of your points are spot on. To transition to the next level, you must take control of your destiny. No one is going to give you anything. And, them muhfukkas put their pants on one leg at a time just like you. Nobody is "better" than anyone else. We just have varying degrees of responsibilities. Also along those lines, respect is either given or earned. It just so happens that is more incumbent upon those with lower levels of responsibilities to initially give more respect to those with higher levels....than vice versa.

SIDE NOTE - In a discussion with a friend I realized that if the root word -spect means to "to look" and re- means again, then respect means "to look again", which i take to mean looking/thinking twice before taking actions or opening your big mouth.

So those new to the circle may need to show more respect first, before earning their own. But once you've studied and shown yourself approved, gained a true confidence in your abilities, and gained a respect for own accomplishments, others will follow suit and more respect and responsibilities will be given.

A sincere well wishing to you on your future endeavors. Thanks for sharing and Good Luck!

7/16/13

"5. Find your niche" - in my opinion the most important factor in your progress within the firm. You might not be promoted each year but creating expertise in a field will strongly protect yourself from being asked to leave the firm...

7/16/13

Finding a niche, no doubt. And that really goes for all facets of life. Being the "go-to-guy" for a specific activity is great for you social life. For me, it's golfing; if any of my friends fancy a round, they hit me up to book/coordinate it. Always something to look forward to come the weekend.

Sorry to get off track there, but developing strong sales skills is crucial to advancement. I bet VERY few people really enjoy sales; you have to be on point all-day, everyday, and cold-calling sucks. If you can get past it though, it makes presentations, public speaking, interacting with superiors much easy.

I used to always consciously "think" about what/how I would say things when speaking to superiors, which is easy to pick up on, and doesn't exactly exude confidence.

7/16/13

highlylevered88:

Isn't another obstacle to advancement that PE firms are completely flooded with mid-level people and fund sizes aren't going up? I'm sure even people who did pretty well on the items mentioned above are finding themselves offer-less...As I'm not at this level yet, and don't know for sure, please let me know if that's the case.

Regardless of the fundraising environment, there is always going to be very limited room at the VP level and up (that's why I said "fighting chance," not guarantee). In addition to getting paid a fuckton, at most firms the VP level is where you start getting carry, and there is only so much of that to go around. Giving you a slice means someone else can't have it, so you better believe all the senior guys at the firm need to be REALLY convinced that you're going to bring something to the table before they invite you into the club. So yeah, it's not a shoe-in by any means.

7/16/13

Take_It_To_The_Bank:

Is that not a waste of your experience? Unless you are genuinely dissatisfied with PE then I would not go down the Software Development route.

No matter what you do, you will one day break into a management role. For some, it happens in their 20s, for most, in their 30s, and nobody remains in an Analyst role in their 40s.

Ergo, going into software won't avoid you the eventual obstacle of having to assert leadership. You're already on the cusp of breaking into the management level in banking. Going into software development will only delay this inevitability of having to overcome your weakness.

I think shrugging off the challenge as you appear to be doing is the worst thing you could possibly do. Man up. If you are bored with PE, you probably already know there are a multitude of options available to you anywhere in the Financial Services industry that you could pursue.

You're certainly correct that "asserting leadership" is something most everyone will have to do if they want to move up in almost any career. And yes, I did consider other options in the financial industry. I thought about moving to another PE firm, joining a corp dev department, or even joining an FP&A team and trying to work my way up to a CFO position. I opted to forgo those options for the time being for several reasons:

(1) I'm somewhat over PE for the time being. I have a lot of reasons why, but that is a longer discussion.

(2) I didn't want to start bouncing around from firm to firm, becoming a journeyman of high finance. I've seen *a lot* of colleagues and higher-ups do this - they come out of a great PE or banking gig, but then don't know what to do so they take jobs at subpar shops for a few years then move on to another subpar shop and so on. I've even seen a few go from BB analyst > MM PE > B school > banking associate. I believe bankerella referred to this as "churning out" in her linked-in banker career study. If I'm going to make a move, I want it to be with purpose, not just because I feel like I have to find another job that pays me well.

(3) Yes you can venture outside of high finance and join the corp dev or FP&A deparment of a corporation, but you have to keep in mind that when you do, you are moving from the front office to the back office. That didn't really appeal to me.

(4) Most importantly, I refuse to accept the widespread notion that the job I picked when I was 22 years old should dictate the next 50 years of my life. I think I have a much better sense of what I like and don't like to do after working for awhile, so I'd like to explore some different avenues now that I have the time and money to do so.

7/23/13

You're unusually insightful with your point #4. Far too many people let the 20-year-old version of themselves dictate the path that the 30+ year old will follow.

As long as you're young, you may also want to take the chance to explore some of the non-meta professions (banking, consulting, and law are catalysts for direct creation of products & services, but aren't really the direct value creators themselves. Getting some career experience in the non-meta companies can give you very valuable insights for later in your career, no matter where you end up).

--
Executive Coach, Serial Entrepreneur
Twitter, Facebook: GetItDoneGuy

1/5/14

thanks a lot for sharing. on the one hand, the tone of the post reads as though you desired a vp role, but on the other, you say you're kind of over PE. this begs the question, is it so bad that you didn't get vp? i'm a bit biased since myself (current 1st yr analyst at GS / MS) and most of my friends (other BB analysts and mega cap associates) see finance as a means to an end. something to do for the time being to put us in a position to do something that actually excites us down the road. after 2 years banking and 2 years PE, aren't you in a position to do just that? this is less in response to you and more in response to a sentiment i've seen of late that you absolutely must follow the 2 years banking, 2 years PE, 2 years B school path of overcredentialization. it seems like after the second step, there's a ton you can do. you're ~25 with no wife / kids, you probably have 300 - 500k saved up, and have a lot of skills that are rather highly coveted. hedge fund, angel investing, travel, startup are all possibilities aren't they? a few people I know have done really interesting things after 2 years in banking and 2 in PE, so I don't get the desire to stay post-PE if, like many, finance isn't what you actually want to do.

1/8/14

Yes, personally I am departing the "track" for the time being and pursing opportunities in tech. And yes, the money and experience I've gained from my years in banking and PE have made that possible. That said, in my experience people that forsake bschool or direct promotions -- even when they aren't particularly fond of finance -- are in the minority. I think there are several reasons for this.

First, and least surprising, there's the money. Finance is really the only field where mid-level, non-revenue generating W-2 employees can consistently make $500K+. It's insane. I didn't realize the extent of this insanity until I started getting exposed to salary data of the employees at our various portfolio companies. More often than not, I made more than everyone in the company except the CEO, as an associate. And while our portfolio companies weren't Fortune 500 behemoths, they still were of decent size ($200mm - $800mm in revenue). Now, everyone knows W-2 income isn't ideal and the real money comes from being a principal. But for the vast majority of people who aren't willing to step out and take the risk that comes with being a principal, a finance gig is impossible to beat, pay-wise.

Second, stepping out and doing something different is actually a lot harder than it sounds. Lots of people say they want to go work at a start-up or something like that. But when it comes down to it, as a finance guy, what are you going to actually do at a start-up? Start-ups need technical people and people to sell the product. Not finance guys. Finance guys come later -- way later. So guess what that means? If you want to do something different and actually make an impact, you effectively have to start over and learn a new skill set. Starting over is hard and most people don't want to do it. So they go back to the track.

Finally, and most importantly, there's the issue of prestige. We've been conditioned more or less our whole lives to seek validation from external sources -- get the stamp of approval from the elite private high school, then the target college, then the top bank, etc. Doing something that "excites" you usually involves forsaking prestige, at least initially. That's a tough pill to swallow for someone whose entire life has been centered around prestige. It can be disorienting to one day wake up and do what you want to do, not what you're supposed to do.

Bottom line, some people do manage to transition to something else, but I think you'll find a lot of people who say it is just a "means to an end" will still be in the industry, in some capacity, 10 years down the road.

4/30/14

labanker:

Finally, and most importantly, there's the issue of prestige. We've been conditioned more or less our whole lives to seek validation from external sources -- get the stamp of approval from the elite private high school, then the target college, then the top bank, etc. Doing something that "excites" you usually involves forsaking prestige, at least initially. That's a tough pill to swallow for someone whose entire life has been centered around prestige. It can be disorienting to one day wake up and do what you want to do, not what you're supposed to do.

Bottom line, some people do manage to transition to something else, but I think you'll find a lot of people who say it is just a "means to an end" will still be in the industry, in some capacity, 10 years down the road.

This is such a refreshing attitude to hear and good luck to you. I hope you will update all of us on your progress in your next pursuit.

5/1/14

Appreciate the well wishes. Probably about time for an update given I wrote this post close to a year ago. Been a pretty wild ride since then. I'll post something soon.

7/17/13

Great post, OP - thanks for the honest advice and candid relation of your own experiences. I feel like number 6 kind of sums it all up: Stop just doing what you're told and start doing what needs to be done.

7/17/13

Great post; wonderful advice for people trying to move up in basically any industry and at any firm.

7/17/13

Great post thank you for sharing

7/18/13

my experience was somewhat similar - and different.
Totally agree that the move from Associate to VP is a move to a totally different job and many cannot make the transition.
My 2 cents is that the key is actually deal sourcing and closing.
If they upgrade an Associate to VP, they are basically saying "we believe you can make it rain."
That means said Associate has given indication of ability to bring in business.
I saw some sr. associates be entrepreneurial and find projects and then close them.
They got mad props for this.
I saw others schmooz the entrepreneur / seller and wine and dine and then get the deal sourced by the MD closed, with the entrepreneur saying "I really like this associate" and indicate that this was a factor in selecting this firm as an investor/buyer.
Number crunching it seems is a skill relegated almost exclusively to analysts/associates, and all of a sudden, as VP, you gotta bring in business.
So if you only put your nose to grindstone as A/A and didn't show closing ability - even if it wasn't your mandate to do so - you may not be able to inspire the confidence for this upgrade to VP.
That's a bit sad, because I think many A/As got passed over, because they didn't realize that they should have, in the later years as a sr. associate, been trying to show sourcing capability.
Just weren't told to even try.
And then subtly it was just decided that so-and-so associate just doesn't seem like they can bring in deals, so why upgrade.
My 2 cents, and based solely on my own experience (at 2 different funds).

8/11/13

Well said.

I think op over-analyzed the situation here, sourcing capability is all you really have to show... Good luck.

The Auto Show

7/18/13

At a certain point nobody's going to show you anything anymore. In saying that, I mean higher ups. Unless you kissing ass and saying "I'll be your bitch if you take me along for the ride to the top.". Fuk that. Some folks sit back and watch you and see what gonna do. How you react. Are you a self-motivated go getter?

There's been a lot solid advice in this thread that applies to all facets of life.

Now, I think the next story should be how the OP dusts himself off and gets back in there.

7/19/13

Good article
I feel one step closer to making partner at a IB firm

I have dreams of being a big shot in a 911 GT...

7/19/13

Any advice as to how to improve your presentation skills as an ibanking analyst? Not exactly a ton of opportunities to speak in front of a crowd

7/20/13

Great post.

7/22/13

Great read. I personally think this advice is relevant beyond banking.

7/22/13

Amazing post! Thanks :)

7/23/13

thank you. SB.

7/29/13

labanker:

duffmt6:

Thanks for a solid writeup.

I would be interested to hear where you think you might have tripped up within the 1-6 you listed above. Also, what's next for you?

Really all 1-6 to an extent. I came in thinking that if I built great models, always had bulletproof numbers, and tore up data rooms that I'd be heralded as a great associate and be well on my way to the next level. I didn't really give presentation skills and "speaking up" a second thought. Not a good move. After sitting through multiple investment committee meetings, staff meetings, and portfolio company board meetings, I started to realize how important solid verbal communication really was, as the senior guys would often base their entire assessment of people solely on how effectively they presented. Not helping matters was the fact that I basically went deer in the headlights during a staff meeting when put on the spot to present something I wasn't expecting to present. Thus for the first time in my life, I developed a fear of public speaking. I think I worked through the issue reasonably well (I got flagged for weak presentation skills in my first review but had no issues in subsequent reviews after specifically working on it) but there's no question it set me back.

I think #3 really hurt me as well. I kind of had this "I am not worthy" attitude - I put the senior guys on this pedestal and was desperately afraid of letting them down. So while I always got pats on the head and good bonuses come review time, I don't think the senior guys ever really respected me. It was only towards the end that I realized (i) that the senior guys are just ordinary dudes and often knew less about what they were saying than I did and (ii) giving someone enough power over you that your heart races anytime they come around is no way to live.

I was reasonably decent at #4. While there were times I'd sit and stew in my office after getting some stupid assignment, I took pride in my work and did my best to ensure that any work product with my name on it was done right and done on time.

By the time I realized I really needed to be implementing #5 and #6 and not just concerning myself with models and decks, my interest in the whole PE thing was starting to wane. That's a problem because you really need to be jazzed up about the job to give #5 and #6 a serious go.

So what am I doing now? I figured that since I like screwing around with models in Excel so much, maybe I should do something similar for a living, but on a grander scale. Thus crazy as it sounds, I'm going to be joining a programming bootcamp (http://refactoru.com/) come September to see if I can try my hand at software development (I've also been dabbling in programming on the side). The thought is to work for someone else as a developer for awhile, then maybe try my own thing down the road. We'll see.

Please do not take this the wrong way, but are you Asian? The overall "tone" of your post and a lot of the things you wrote including not "speaking up" during meetings, having an "I am not worthy" attitude, and not to reinforce stereotypes, but saying that you are now thinking of going into software development leads me to believe that you might be Asian.

You may be thinking to yourself "Does it matter? Does it make a difference?" Honestly, I think it does... You mention you went into this job thinking that if you built great models and had bulletproof numbers, that everything else would take care of itself. I cannot even begin to count the number of times I have heard the same line of thinking from Asian associates aiming for VP and even third-year analysts who were hoping to get directly promoted to associates but then were passed over in favor for the individuals who were less technically competent but instead were very charismatic and had great social skills.

7/29/13

Doesn't make a difference anymore as he's no longer with the firm or aiming for VP.

7/29/13

Extroverts tend to win in the game of life.

Best Response
7/30/13

Deo et Patriae:

Please do not take this the wrong way, but are you Asian? The overall "tone" of your post and a lot of the things you wrote including not "speaking up" during meetings, having an "I am not worthy" attitude, and not to reinforce stereotypes, but saying that you are now thinking of going into software development leads me to believe that you might be Asian.

You may be thinking to yourself "Does it matter? Does it make a difference?" Honestly, I think it does... You mention you went into this job thinking that if you built great models and had bulletproof numbers, that everything else would take care of itself. I cannot even begin to count the number of times I have heard the same line of thinking from Asian associates aiming for VP and even third-year analysts who were hoping to get directly promoted to associates but then were passed over in favor for the individuals who were less technically competent but instead were very charismatic and had great social skills.

Several things:

1. I am actually white.

2. Race and dubious stereotyping aside, your comment touches on one of the reasons I wrote this post. A lot of kids (whether they are Asian or not) assume that if they excel at the job they were hired to do, they will be recognized and promoted. Seems to be a reasonable assumption but of course it's not enough -- you have to go above and beyond and also unlearn a lot of the shit that's been drilled into your head over the years. This usually isn't explained to budding analysts / associates, hence the confusion on the part of your colleagues and the impetus for my post.

3. I'm worried that you and several others here are misinterpreting my post and trying to boil this down into a social skills vs. technical skills / introvert vs. extrovert / jocks vs. nerds issue. It's not. It's about realizing you're just as good as anyone there and acting like it. This is manifested by saying what you think, doing what you know needs to be done, carving out your space, and making your own moves.

4. Just to clear up another potential misinterpretation that's insinuated in your post and referenced elsewhere in this thread. I'm not going into software because the requirements of the next level scared me off. I'm doing it because I think the best jobs are those that allow you to immerse yourself in your work and dedicate yourself to mastering a craft, and software development is one of the few jobs that allows you to do just that.

8/1/13

NERDS
http://www.youtube.com/watch?v=tZVdR19E5mU

Kidding, thanks for the insightful posts. +1 to what you said about careers, hope coding bootcamp goes well (Boulder is one of the best places in the country IMO)

Fill the unforgiving minute with 60 seconds of run. - Kipling

8/3/13

labanker:

Deo et Patriae:

Please do not take this the wrong way, but are you Asian? The overall "tone" of your post and a lot of the things you wrote including not "speaking up" during meetings, having an "I am not worthy" attitude, and not to reinforce stereotypes, but saying that you are now thinking of going into software development leads me to believe that you might be Asian.

You may be thinking to yourself "Does it matter? Does it make a difference?" Honestly, I think it does... You mention you went into this job thinking that if you built great models and had bulletproof numbers, that everything else would take care of itself. I cannot even begin to count the number of times I have heard the same line of thinking from Asian associates aiming for VP and even third-year analysts who were hoping to get directly promoted to associates but then were passed over in favor for the individuals who were less technically competent but instead were very charismatic and had great social skills.

Several things:

1. I am actually white.

2. Race and dubious stereotyping aside, your comment touches on one of the reasons I wrote this post. A lot of kids (whether they are Asian or not) assume that if they excel at the job they were hired to do, they will be recognized and promoted. Seems to be a reasonable assumption but of course it's not enough -- you have to go above and beyond and also unlearn a lot of the shit that's been drilled into your head over the years. This usually isn't explained to budding analysts / associates, hence the confusion on the part of your colleagues and the impetus for my post.

3. I'm worried that you and several others here are misinterpreting my post and trying to boil this down into a social skills vs. technical skills / introvert vs. extrovert / jocks vs. nerds issue. It's not. It's about realizing you're just as good as anyone there and acting like it. This is manifested by saying what you think, doing what you know needs to be done, carving out your space, and making your own moves.

4. Just to clear up another potential misinterpretation that's insinuated in your post and referenced elsewhere in this thread. I'm not going into software because the requirements of the next level scared me off. I'm doing it because I think the best jobs are those that allow you to immerse yourself in your work and dedicate yourself to mastering a craft, and software development is one of the few jobs that allows you to do just that.

I actually disagree with point 4 and the software development thing generally. If you actually enjoy writing code, and want to do that every day for the rest of your life - fine. I can write code - I taught myself how to write backtesting and risk-neutralization algorithms in java/matlab/python, and others while I was a trader for a quantitative hedge fund. i stopped because, like you said, it's a craft you can immerse yourself into. Just like plumbing and blacksmithing. And IT work was more like a "function" at my firm rather than a "rainmaker" job. If you want to actually get a tech thing off the ground, better to outsource it. There are just as many tech millionaires who can't write code as there are who can. And you have to ask yourself, how much would it cost to build my product? $20,000? If so, what's the fastest way to get an extra $20,000 - save it at my private equity job, or learn it myself over a period of multiple years with a high chance that I'm not any good at it?

8/11/13

This is a great post...all these points also apply to the world of hedge funds especially at larger shops. It is difficult because as a junior person you have to be an absolute killer in terms of doing the work, being eager, and helping others; but then to make the next step you eventually have to have to be very aggressive and confident in your ability. Doing a good job on the little stuff gives you the opportunity to show yourself as worth being considered to participate more significantly in the producing-side of the business but if you don't step up and take chances its like spending three years earning a very expensive ticket and then forgetting to show up the day of the show. When you are putting in the hours working on other people's behalf always remember that it is a means to an end and not the end in itself..

8/11/13

labanker:

3. I'm worried that you and several others here are misinterpreting my post and trying to boil this down into a social skills vs. technical skills / introvert vs. extrovert / jocks vs. nerds issue. It's not. It's about realizing you're just as good as anyone there and acting like it. This is manifested by saying what you think, doing what you know needs to be done, carving out your space, and making your own moves.

4. Just to clear up another potential misinterpretation that's insinuated in your post and referenced elsewhere in this thread. I'm not going into software because the requirements of the next level scared me off. I'm doing it because I think the best jobs are those that allow you to immerse yourself in your work and dedicate yourself to mastering a craft, and software development is one of the few jobs that allows you to do just that.

3. I agree. This is delicate ground. You have manage being assertive vs being as cocky. It has to happen for your own progression, but you'll have to breakout of the shell folks try to put you in while being in a support role. But they have eventually respect you as a potential "one of them".

4. Agree with these also. Doing your passion will eventually make you the most successful. And mastering a craft is never a bad thing.

8/11/13

Wow. I can't even imagine a PE guy would be afraid of speaking in public.
Good luck in your new job path OP.

11/25/13

Great post, labanker. I'm actually writing an article for a private equity publication on what it takes to climb the ladder at a PE firm. Would you be willing to have a five minute call to elaborate on a couple of points? Thanks.

11/25/13

"Be yourself; everyone else is already taken."
-- Oscar Wilde

12/27/13

Thank you for sharing your insight, much appreciated!

1/4/14

+1

1/4/14

Solid write up.

I'm bi-winning. I win here, and I win there.

1/4/14

Fantastic post. I would say that all of these bullets apply directly to senior Corp Dev positions as well.

"Once bread becomes toast, it can never go back."

1/5/14

Question. Any of you have any negative experiences from speaking up too much? Seemingly taking too much initiative??

1/8/14

Nice post +1

1/8/14

What's the odd, percentage wise, for an associate to make VP in PE?

1/9/14

Very helpful, solid points. Thank you.

1/9/14

Glad to hear that some others are having a similar experience to me. Not to take anything away from the OP, but I feel like even as a 1st year Analyst there are some excellent takeaways here. Best of luck!

4/30/14

Excellent post. As someone who's made it past the VP level in PE, these are all excellent points. I think the big takeaway is the difference between analyst/associate (IB or PE) and VP and beyond is that it becomes more of a sales and relationship job, even on the buyside. It's about relationships with portfolio companies and a network of potential acquisitions, ibankers (if you're in PE), clients (if you're in IB), your coworkers/superiors and investment committee, LP's at the most senior levels, etc. If you've come from the traditional route to get to a VP+ position in PE (IB analyst->bschool->associate->PE...) or in IB it's pretty much assumed that you're technically proficient in excel and basic finance but the guys that make it are the ones who can shmooze, source deals and close them. Hell, I couldn't tell you the last time I did a model and I think my associates gets scared when I try to alter their models. At the upper levels it's about the relationships, negotiating and structuring deals on your feet and selling. That's why lawyers are one of the few people who can get into PE without the traditional banking background.

Like someone stated above, even if it's not your job as an associate, try to source deals. Even if they don't get done it'll show that you took the initiative and know that bringing in deals or dollars is the next step. Most PE funds (and I've never been at a megafund so I don't have that direct experience) are pretty lean so the distance from the analyst/associate to the Sr. MD/Partner is only a few seats and doesn't consist of 5,000 employees between you and LLoyd Blankfein. Take advantage of it. Go out for drinks with senior guys. If public speaking isn't your thing sign up for something like Toastmasters that will force you out of your comfort zone. Speak up. This may just be me, but I'd rather an associate speak up in a meeting or come to me with an idea and be dead wrong than never speak up or kiss my ass all the time. PE deals are all different and if you show that you can come up with a different solution, even if it's wrong, it show that you're thinking and not just putting another lbo model together and shifting through due diligence.

I also really like the #3 comment: don't be a dick but if you think of yourself as a lowly serf and project yourself that way, people will treat you that way and it's a tough trap to get out of. As an analyst at an IB you may have had to act that way (because you were treated that way) but your stint was 2-3 years and out. Most, not all, PE hires stay at a fund for much longer, if not for their entire PE career, so if you don't show some spine at the beginning it'll be hard to claw yourself out of the perception that you're a whipping post.

4/30/14

Thanks for the words, good read. What are your plans for the future?

5/1/14

Nice post.

Live life your own way.

5/1/14

e

5/1/14

w

5/2/14

Excellent post.

Whether or not you ultimately decide to pursue it full time I think you will find that coding school is enjoyable and intellectually rewarding.

It's weird how so many people pigeonhole themselves - finance people think of computers as something mysterious, coding as something that 'maybe you're just not good at.' In tech you will find a lot of developers think of business as something they're just not good at.

Most people on this forum are

Good luck man!

8/10/14

Hey OP, can you estimate the percentage of associates at PE firms that go on to be promoted to VP level? If possible, can you also estimate the percentage of pre-mba associates at PE firms that succeed at getting post-mba associate roles in PE firms after business school?

8/13/14

LifeIsCruel:

Hey OP, can you estimate the percentage of associates at PE firms that go on to be promoted to VP level? l

OP already said "most associates never make it to VP". Of course some estimate of the percentage would be nice.

8/11/14

@"labanker"

6/1/15

I appreciate you sharing your experience with us. I really enjoyed reading this article it was a bit of an eye-opener. I noticed in one of your replies you mentioned you thought about taking up programming. If you happen to glance at this comment I suggest you check out "code academy", it has some really great free online courses to get you going.

Tissot Visodate

6/2/15
8/2/15

A lot of good advice in this thread with a solid, encouraging OP. Thanks

12/16/15

This probably one of the best post's I've ever come across on this site, excellent. Really wish I had read this a few years ago, would've been helpful insight.

Through the lenses of my own experience doing PE deals as an associate, I can't stress how important his 1st and 2nd suggestions are. It's absolutely critical you take advantage of the opportunities that op mentioned in 1/2 to demonstrate you're not only solid on the execution / fundamentals component, but that you've also digested the analysis you've done and identified the 2nd and 3rd order implications or merits of doing the deal in a manner that's relevant to the funds investment thesis / themes.

Cranking all night for a few days with your headphones in, hold'd up by yourself in your cube, constructing the greatest LBO/IPO/spin-merge/DCF/NAV the world's ever seen and dumping 10 pg's output onto ppt slides versus taking half a day to quickly model a few key drivers, 2-3 potential deal structures and popping into your VPs office unannounced after lunch to walk him through what your thinking will put your name in the mix for someone the fund wants to hold onto.

One point brought up that I don't necessarily disagree with, but I'd certainly caution people on, is op's last bullet. BE CAREFUL WHO YOU GET INTO BED WITH. PE is a very cutthroat and political business, I had kind of just assumed this to be case going into the job but I really didn't know how bad it could actually be till after a while on the job. Getting too chumy or even associated closely with a likable but under-performing portco CEO or an over ambitious VP or jr Partner who's pushed for a risky deal that turned out to be a goose-egg trouble's and bad reputation can rub off on you. Other folks at your fund who don't have your best interest in mind can and will take advantage of that if it will benefit themselves, guaranteed.

Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equit...

7/1/16

Great post, thanks for sharing. I think this advice applies for everything, not just PE. It's amazing that you have identified where you fell, as many can not do that. Since you have identified your weaknesses you'll be stronger going into whatever you choose to do now. Good luck dude

9/2/16

Scream on MTV. Just got done binge watching. Great show. It didn't take long BC it seemed after every episode I didn't wanna stop even for a cigarette. Rumors season 3 may be canceled... I hope not.

9/24/17

Where can you make more money? IB ASSOCIATE or PE ASSOCIATE. Please answer this question.

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