Move from Long-Only Fund to Private Equity

Long time browsing on this website - had a quick question as I am interviewing in the next week for a private equity role in London.

Bit of background: I graduated from a top university in the UK, worked at a large institution in research (non-financial for a year) and moved to a long-only fund where I have been a bit over two years. My fund is bottom-up and we take a long-term investment horizon (concentrated portfolio of 20-25 names), usually 10% positions in public companies (generally emerging markets in Asia and LatAm). I meet management of my holdings often and we have an activist slant (more pro-active than threatening rather).

I was pitched for a private equity role (growth equity). As I have no deal experience or IBD background, does anyone have advice on how to sell myself for the position? I can speak to a few similarities in investment experience, but do lack the active work on transactions.

Thanks in advance..

Comments (5)

 
May 5, 2017 - 4:50am

You can soften your transition by looking at growth shops which also do PIPE.

Sector expertise are transferable.

How long have you worked in your current role and where do you expect to enter, entry level or lateral in at a VP and up?

 
May 5, 2017 - 10:45pm

US based public markets investor here - so not super in the private space but do have friends. Little confused, when you say growth equity do you mean late stage venture, public markets growth equity (like recent IPOs, just following a growth strategy) or a PE place that focuses on growth companies (like LBO transactional, PIPE)?? Answer is pretty different, you should look closely at what exactly the job description and firm is.

I'm going to assume you mean late stage VC. I started my career at a mega l/o and we had a guy make the jump to early stage venture. The modeling gets a little more intense as you go up the venture stages - seed and the earlier stages tend to be almost elusively idea / team sourcing. My old coworker spends a lot of his time keeping his ear to the ground looking for ideas that are interesting and way less time doing valuation because the reality is no one can really predict something that far out. I've seen angel/seed stage VC shops that don't even look for people with finance backgrounds and instead prefer industry backgrounds (e.g. seed stage tech-focused shop listing software development industry experience as a requirement). The modeling gets tighter as you get into the late stages, especially since fundamentals, potential valuation, and potential for FCF generation become more important in the exit process. I think overall, concentrated bottoms up l/o is somewhat similar to the transaction businesses, in the sense that you're typically focusing very deeply on one idea at a time and your ideas can take years to play out.

I think an interesting angle for you to emphasize would be your EM experience and the activist slant. Not too close to EM but I've known a lot of guys in the space. EM investing seems like different beast and the corporate governance in EM markets are terrible, so you need to look at the broader non-market dynamics as well. That gives you an interesting background versus most other public markets US people who can have reasonable trust when pouring through public filings. Some VC firms take a more active role in the operational side of their portfolio companies, and having experience on the activist/operational side probably also really differentiates you from most other public markets people they would be interviewing.

Good luck!

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