Is PE recruiting a circle-jerk?

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This site is dedicated to breaking into IB and for finance professionals to share their experiences. I recently received a return offer, and I'm curious as to how difficult PE recruiting is. People say it's even harder than IB, but I feel like the bottleneck is thinner for IB. Am I wrong or is PE not as difficult as IB to get into? If it is more/less difficult, how?

Comments (26)

 
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  • Analyst 2 in PE - LBOs
Sep 9, 2020 - 9:29am

Just trust us. It's much more difficult.

Only exception is if someone went from a non-target to a top BB, in which case maybe breaking into IBD would around as tough as getting from the top BB into PE. 

 
  • Associate 1 in PE - LBOs
Sep 9, 2020 - 9:33am

Agree with this. I went non-target to MBB to UMM PE. Non-target to MBB was brutal just because it's so hard to get your foot in the door. Even though the interviews for PE were much harder, I found the process overall easier because I was already 'in the game.'

Array
 
  • Analyst 1 in IB - Gen
Sep 9, 2020 - 12:43pm

Would agree with these two posts. I ended up at a top boutique (after a lateral move) from a non-target with a bad GPA. The whole journey was incredibly difficult and I got very lucky that it happened at all. Making the move to PE was honestly easy in comparison and converted on my second process. Even though PE interviews are harder, if you've had a decent analyst experience it should be straight forward to intelligently talk about the work that you've done. When you're coming from a liberal arts school with no finance background it's harder to truly understand everything for SA and analyst interviews (if you even get them), even if you've memorized all the guides.

 

That said, I went off cycle so had experience to talk about. I suppose you're in roughly the same boat for on cycle now given how early it is.

 
Sep 9, 2020 - 11:33am

I wouldn't say it's more difficult. It just tests different skills. You'll have to work on you LBO technicals, that's a given, but also sharpen your consulting skills (brain teasers, market sizing etc) and the famous "investor thinking". Problem is as a graduate/student, your competition is a bunch of clueless peers, most of whom will fail on the technicals. As an IB analyst, your competition is much tougher. Knowing the technicals is a first step, and that won't differentiate you. 

 
Sep 9, 2020 - 1:36pm

I'd say it's far more difficult than getting into IB. For reference, my background is non-target undergrad, mid-tier BB and then MM PE since then. 

Most banks are hiring a multitude of analysts for every class, with the expectation that most will pan out and perform, and then the under-performers will just have their slack picked up by the stronger analysts. The work is also not very difficult, so IB interviews as result are really not that technical and don't really stress on your intelligence (at least in my opinion). So this all equals to a shotgun approach for hiring for most banks, and thus easier interviews. 

Most PE funds are only hiring a handful of associates for every class, and need to have each one perform well (can't afford to hire any underperformers). As result, the interviews are much more difficult and technical, and hiring is much more selective. Not only do you need to be smart, but you also need to find a good cultural fit, which can be tough for some people. I know people who went through 15-20 superdays for PE roles and never received offers. 

"My name's Ralph Cox, and I'm from where ever's not gonna get me hit"
 
Sep 18, 2020 - 3:52am

Building on this, since I relate to the last sentence.

The degree of difficulty depends on your academic background (e.g., school, GPA, SATs), bank/group (GS TMT vs. RBC ECM), quality/amount of prep, and competitiveness of the opportunity (MF PE vs. LMM PE). 

Private equity associate programs are smaller and substantially pickier relative to IB analyst programs. Think of it this way, if each BB bank hires ~100 analysts per year, and [Blackstone/Carlyle/KKR] is only recruiting for 6 spots in a 24-hour time-frame during on-cycle, what's the likelihood you're getting invited for an interview unless you fit their cookie-cutter mold? 

Then comes the actual interview. IB recruiting is mostly about getting in the door and then regurgitating scripted responses to behavioral and technical questions, so you don't have to be particularly bright. PE recruiting has the same preliminary hurdle of getting in the door, but unlike banking recruiting, you have to show that you can use your brain. Not many analysts actually understand their transactions inside-and-out and can think like investors, because most of us are just execution monkeys trying to get to sleep ASAP.  

And even if you get in the door and crush your interviews, how do you stack up? You're surrounded by top students from top schools in the top groups of the top banks almost all of whom have prepped as hard or harder than you have. All you can do is cross your fingers that you made the cut.

Non-target >> BB >> MF PE

 
Sep 9, 2020 - 5:57pm

I agree that getting into Private Equity is more challenging than IB. Successfully breaking into IB is largely a matter of effort. How many hours do you put in at university and how many hours do you put in preparing for interviews. Social skills are less important and you aren’t expected to think critically.

Private Equity is different. You’re going to be tested on your technical skills, but generally everyone is going to pass this portion of the interviews. Winning the position comes down to being able to think both quickly and intelligibly about companies / markets / process dynamics / etc. — and then articulate your thoughts in a structured and thoughtful manner. This is a competency that is a lot harder to develop by simply putting in more hours ... it requires both experience and raw intellect.

CompBanker

 
  • Analyst 1 in PE - LBOs
Sep 15, 2020 - 7:23am

It is competitive, but not too much, if you´re at boutique level (yeah yeah, I know, there are no PE boutiques...). I basically got in by participating in the right club and talking to the right people during my MFin. Never did IB, but all the stuff they ask you in the interview, WSO gives you for free. Sure, it´s no BX, but still a fine enough job.

"I buy the expensive stuff, ´cause when I drink it, I wanna taste it"

 
  • Analyst 1 in PE - LBOs
Sep 17, 2020 - 3:34am

The money is okay, I´m breaking six figures with a low bonus. Mind you, I don´t work in the US, so it´s different. Trajectory was simple, BA at top state school, a few interships, GMAT and a top-ranked European MFin. Then I applied for the right club, had a fun time and whaddayaknow? I´m in PE.

"I buy the expensive stuff, ´cause when I drink it, I wanna taste it"

 
  • Analyst 1 in IB - Ind
Sep 16, 2020 - 4:41pm

I think it’s similar to SA vs FT recruiting for banking.

There are far fewer spots, expectations are higher, and you’re going up against more experienced people. However, you’re also probably smarter / more experienced, so it’s easier to navigate and you feel better equipped to succeed

 
  • Analyst 3+ in PE - Other
Sep 17, 2020 - 10:19pm

It’s more of an octagon-jerk

Array
 
Sep 18, 2020 - 1:09am
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