Brief background on myself: Current college senior at Non-Target state school. This past summer, I interned in a coverage group at a large NYC IB and signed back full-time. I thought this summer was a great experience but I know for sure staying in banking is not my goal. Also, I am likely not targeting MF PE - I would much rather a smaller ~15-30 man shop around ~$1B AUM in NYC. From what I've gathered, MF PE lifestyle is not much different than IB and the experience (both technical and work culture) is significantly better at some of the smaller shops. I understand that recruiting for these types of roles can be very competitive, so I am looking to prepare as much as I can in advance.
Few things I have done so far as a senior: signed on as a student teacher with a Financial Modeling boot camp , student professor for a Finance class, 1st place in a National International Business case comp, studying for GMATs (planning on applying to HBS 2+2 and GSB 2+2). Also planning on going through the PE recruiting guides sometime soon.
Any current PE associates have some advice? Would a part-time PE internship go a long way when it comes time to recruit? Thanks in advance.
interested too
Current 1st year planning to recruit for on-cycle, so take everything I say with a grain of salt. I can only impart my preparation process/priorities, which may be limited compared to the perspective current associates. In terms of prioritizing, this is how I'm thinking:
1.) Resume - Deal Experience, Education, Extra Curriculars (in that order)
The first item I prepared for my process was my resume - outlined my deal experience from the past summer and a few other finance internships I've had. A clean resume stands out, don't underestimate how important the optics are here.
While it's great that you're doing the financial modeling boot camp, taking the GMAT, etc. the most important piece of your resume will be the transaction experience. You will repeatedly be asked to talk about your deals, both with headhunters as well as PE professionals you're interviewing with. I would focus early on thinking back to all your projects over the summer, pick the most meaningful deals you saw, and highlight them.
2.) Have a good reason for wanting to do private equity
Private equity being a lifestyle improvement is a "grass is greener" example. Sure, banking lifestyle sucks, but you work a lot in PE too. Live transactions get busy no matter where you are.
With that being said, pin down 2-3 reasons for exactly why you want to do the work of a private equity associate, vs. staying on at a bank, corporate development, etc. Too many kids follow the herd into the buy side, and if you have a differentiated reason, it will only help you.
3.) Learn to think like an investor
This will take the most time. Thinking like an investor (someone who is trying to identify high quality investments, make money on their own capital) is different than thinking like a banker (getting paid to sell a business regardless of how good/shitty).
Read books, activist investor presentations, 10K's. Try to understand what investors typically look for when presented with an opportunity. Develop a critical eye and try to snuff out bullshit on a company's reported filings (what adjustments are they making to EBITDA? Does your valuation agree with consensus?).
Start to think about all businesses you hear/talk about with an investor's perspective. Consider why someone would buy an asset, and why someone would buy one asset over another.
Once you've gone through reading material, develop a checklist spanning your library. What are things you would look for in a business as an investor?
4.) The models are easy, being a good investor is hard
Have a good reason for wanting to do private equity, and wanting to be an investor more generally. It's not as mechanical as in banking where you're rewarded if you can crank through materials, especially at the smaller shops where you may be given more responsibilities to think through the merits and considerations of investment opportunities. You were specific with the kind of PE you want to do - why? Make sure you're airtight on your response to that question.
5.) Answering your specific questions and other thoughts
Yes, everything you're doing is great (boot camp, student professor, case comp, GMAT). Yes, a part time PE internship would probably make you look slightly better if it's meaningful experience. I would really focus on what you like/don't like about banking, and why you want to do private equity.
6.) Enjoy your last year
Drink a lot and see your friends, don't stress about this stuff too much. Work will be here after you graduate.
On that note, back to turning comments...
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