On Cycle Recruiting 2018: What to Expect

Monkeys - due to the absurd timelines for private equity recruiting, many first year analysts (including myself) feel pressured to proactively prepare for on-cycle private equity recruiting. Would be helpful to have the community outline a prep plan for the next few months. Particularly, how should I prioritize:

  • Networking
  • Soft interview prep (talking about my background, story, why PE)
  • Technical interview prep
  • Thinking like an investor (investment pitches, good LBO targets)
  • Any other points to position me well for interviews and headhunter meetings

Any tips around managing headhunters would also be appreciated. Would appreciate abstention from "you're only a first year, you should focus on doing a good job" type of comments...actionable advice would be great.

Any and all input welcome, thanks!

 
Most Helpful

I can take a crack at this as I sit waiting for my delayed flight. Went through this process a few years ago now, but the themes likely still hold true. For reference, I went target -> BB -> upper middle market buyout firm.

One disclaimer: This is based on my opinion and experience. Others may have different views on what is important or may have had different recruiting experiences - there's no one-size-fits-all answer.

One note: I'm still learning how to format on this forum, so apologies if some of the bullets are hard to follow. I can't figure out how to create sub-bullets or force the text to be formatted (or not!) the way I want.

Strictly looking at the items you noted, I would order them like this:

  1. Soft interview prep (talking about my background, story, why PE)
  2. Thinking like an investor (investment pitches, good LBO targets)
  3. Technical interview prep
  4. Networking

Now with a bit more detail:

  • Soft interview prep is the best place to start for a few reasons. First, it really just requires you to reflect on your experiences and goals. This will help you get a better understanding of what you're interested in so you can present yourself in a more effective manner to head hunters and focus your search a bit better. Second, it's really easy to practice and doesn't take much time. Just take out a pen and pad (email draft, word doc, etc.) and start writing about where you come from, how you got to where you are, where you want to go. It should be a pretty easy refresh considering you likely just went through this same thought process when you applied to banking jobs last year or the year before. Third, this will be a decently sized chunk of what your actual interviews will consist of. If you have a really tight answer here you will look very mature and well-put-together during your interviews with the firms themselves. Bottom line here is that starting this prep first will give you more time to refine your story and wow head hunters with it, which will open the door to more PE interviews during which you can wow the folks you interview with.
  • Thinking like an investor is tough in a vacuum. Sure it sounds great to practice by looking at a headline and thinking "Is Company X a great LBO candidate? Let's see, it has awesome cash flow, diverse customer base with evergreen contracts, strong recurring revenue profile, and strong management team... Yup - great LBO candidate!" but the reality is it's hard to know any of those things without doing a lot of research on a company. Unfortunately for you, you will not have a lot of time to do this! Fortunately for you, your literal job is positioning companies as great LBO candidates! For this reason, "thinking like an investor" is something you can do as part of your day job and only requires a bit of incremental effort. Once you're done with a CIM, MP, or deal, take a Saturday morning to jot down how an investor may react to your investment highlights. Is the industry growing? (checks section 3 of the CIM) Yes! Is the Company well positioned relative to competitors? (checks grid in Company Overview section) Hmmm... kind of, but the others are point solutions while the target is a robust platform. Is there opportunity for organic or inorganic growth? ...you get the idea. Your interviews will basically be a person at the firm asking you to tell them about yourself (covered off above), followed by "let's talk about this deal... is it a good company?" to which you just recite your findings from your analysis of the CIM you made.
  • Technical interview prep is important for sure, but don't kid yourself into thinking a head hunter is going to ask you to crank out a 1 hour LBO in the lobby of the Ritz (or wherever they meet people these days). This is something you may need to do in the second round of your interviews, but don't waste all your time memorizing how wide to make columns and forget to craft a great "background story" for yourself. My recommendation would be to practice paper LBOs first to become familiar with the basic set up. Practice these late at night before you go home so you can do them half-dead - this will make it easier to mindlessly crank them out when asked in an interview by some cocky senior associate. Once you get that down, start working on the "1 hour LBO test" - there are literally dozens of these out there (including on the desktops of every second year analyst in your group), so just find one you like and practice it every few days when you have an hour. Again, these are important to be able to do, but they don't get you in the door. These are merely "check the box".
  • I didn't do any networking. I don't think it's important to network with the firms themselves. It is extremely important, however, to reach out to the headhunters and get on their radar. Email each of the following firms in the next month or so and ask when they're going to start meeting with folks because you are very interested in PE and want to introduce yourself and tell them a bit about your preferences. List of firms in no order: Oxbridge, HSP, CPI, Dynamics, Ratio, Bellcast, SearchOne, SG Partners, Amity

All this said, and going directly against your request, you need to make sure you focus on establishing a good reputation for yourself in your first few months of banking. Don't forget that the folks you work with will be giving you references (and I'll let you in on a little secret: they matter!)

Hope this is helpful. Happy to clarify anything.

 

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