How to Prep Before Starting PE Gig
WSO,
I will be starting as a Pre-MBA PE Associate at a North America-Focused MM Buyout Fund this summer. How can I best prepare for the job?
Some people have told me to read books (basically narratives), but how can I best prepare for the technical aspect of the business, i.e. analyzing businesses throughly, not just the financial modeling aspect? I know there are some case study prep books for management consultants that I can read.. anything else?
Much appreciated! Xoxo
In the same situation and also interested
Joined PE about a year ago and can share a few things that either were helpful or I wish I would have done more of:
Really you will learn how your firm approaches investing (i.e. how their Investment Committee letters are structured) on the job so don't worry too much about it.
Good luck
Excelling what is the quickest way to learn to model for a beginner? Do you have any recommendations for videos or podcasts?
https://www.asimplemodel.com/
http://macabacus.com/learn
http://www.streetofwalls.com/
Also, shameless plug for WSO PE course, which is a huge help as well.
otherwise, I like the suggestions below about familiarizing yourself with different business models, etc. Also sounds like you know the firm you're going to - for success internally, it will be important to familiarize yourself with existing portcos and historical deals - this will a) make it seem like you give a shit and b) help you develop that spidey sense for what types of assets are a good fit for your firm.
I'm going to advocate the opposite here. You have a few months before you start. Take that time and enjoy your life. Travel, see family, friends, go into your new job with a clear mind.
First of all, the learning curve will be steep regardless of how much you prep. You will find that the models you built in banking are inadequate for your new job. You will find that the industry knowledge you thought you had is actually quite superficial. You will find that all the prep you could possibly do will be made redundant in the first few months on the job. Assuming roughly equal levels of competency, the associates who outperform are not the ones who spend every free moment prepping for a job that they won't even fully understand until they actually do it. It's the associates who keep their composure, manage their stress and understand that it's a marathon - even over two years. 1st year comp tends to be the same across the class, or very tightly bounded, and I've seen very little correlation between this type of overly ambitious prep work and long-term success. The thing that not enough people talk about is that success in PE comes more from EQ, and ability to manage stress/burnout, rather than sheer IQ or level of knowledge.
Enjoy the time off, and be ready to run when you start.
I 100% concur with the above. Great words of advice.
Enjoy life for now while you can.
Fully agree with this. When I look back to when I had 5 months off before working full time, I’m so glad I look back on my motorcycle trip in northern Thailand, cruising angkor wat with my wife, etc. rather than sitting at a desk building a model or whatever, which is what I’ve been doing ever since.
Keep your mind sharp and live it up
palpe Excelling Mind elaborating on the specific recommended literature?
Congrats on the offer / new gig. My general advice to you would be the following:
Diligently track the industry your firm / group focuses on. You're a big boy now as a new associate and your manager(s) will be looking to you to be sharp on what's going on; who's capital constrained, M&A rumors, announced deals, trading multiples, who the major players are in said industry (CEO's, deal makers, portco founders with strong track records of successfully exiting, etc.). You don't want to be the guy who only knows how to model and put slides together
Stay in touch with your new team. If you're in the same town as your firm, think it would be smart to casually stay in touch with one or more of the deal team members you connected more strongly with and or the hiring manager who ultimately made the case for hiring you. They're busy, so obviously you don't want to annoy them, but maybe sometime over the next month or two shoot over a note asking to meet for a coffee or after work drinks. This would go a long way in starting to build strong rapport
If you're coming from a coverage / non sponsors / M&A group; I'd maybe carve out some spare time to dig through some buy-side models on your share drive and get familiar with different pay-out waterfalls. You'll be doing a lot of that once you get going at your new fund and when I started in PE I wasn't and it was tough learning experience on the fly
Don't kill yourself getting ready for the new gig. You're going to have to navigate a pretty sizable learning curve once you get to PE, no matter what you do on the front end to prepare. So enjoy your garden leave period, do some traveling, get moved into a new apartment, etc. You'll want to be a fresh as possible on day one
Following
Bump @APAE could you please share your take on this whenever you get a few minutes? I take your word as gospel and would really appreciate it.
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Congrats on the offer / new gig!
My PE gig began after my third year as a MM IB analyst, and I was of course overworked and hadn't taken a vacation in three years. I had a month off between my last and first days and used it to recharge my batteries. Took a road trip with some friends to the Keys, went to the Bahamas, spent some time on the beaches of Florida, ate healthy, worked out A LOT and did a ton of lounging around / relaxing on the couch or in a beach chair. One of the best decisions I've ever made.
You will have so much time and opportunity to learn on the job, but you get only a few opportunities to take some time off and enjoy the fruits of your labor. You broke in twice and worked your tail off to get where you are - take a victory lap.
Our heavenly father, Gordon Gekko, proclaimed that our most valuable asset is time. Don't blow it, sport.
Again, congrats and good luck!
APAE
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