Q&A- Undergrad to PE (Ask me anything)

Hi everyone! I've really enjoyed the community here at WSO and the fantastic insights and advice people have shared over the years, so thought I'd give back and share my non-traditional experience.

My Background:

Target school, liberal arts major. Interned at a BB IBD my junior summer, and went directly to a well-respected MM PE firm post graduation.

Ask Me Anything:

Happy to answer any questions about what the day-to-day role is like, recruiting (at both my level and more senior levels), why I made this decision, etc.

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WSO Podcast: Member @JDS07"

For the podcast I share my path to joining a top private equity fund as an analyst right out of undergrad. I covered a wide range of topics including: 1) What I learned during my bulge bracket investment banking internship 2) Why I wanted to skip investment banking 3) What I am seeing in the deal landscape, how my firm does diligence and how involved I am 4) Detailed advice on how to prepare for super competitive private equity interviews with limited deal experience 5) What I plan on doing next...

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Comments (46)

Jun 17, 2019 - 1:36pm

Your first question might prompt a good debate of why IB vs. PE, so I'll just provide my own thoughts:
1) Having been on the IB side briefly and now being on the other side, my firm typically views bankers as people who are really good marketers and know how to drive a competitive process (if they're good bankers). I knew that IB was going to be a transition career into PE, so my if I didn't get into a solid PE firm for FT, then I would have gone back to IB and did my two years and recruited then. To be honest, the work I do in PE assessing deals is far more complex and "impactful" than what I did in IB (spent many more hours turning purely cosmetic comments on decks....)

There are pros and cons to going into PE out of undergrad (M&I has a good article on this as well), and I'm happy to discuss that if you're interested. Overall the nature of the PE firm is really important.

2) My firm had a formal recruiting process for its core target schools (where most of the mid-level to senior people graduated from or have connections with). My school wasn't one of them, and I was the only one in many years to have got in through just cold emailing. Literally just emailed someone from the firm's website and managed to get a superday after a phone conversation. You might be surprised at the response rate you get from cold emailing if it's right during recruiting season.

Jun 17, 2019 - 6:31pm

Thanks, really appreciate the detailed response.

Would love to hear more about your perspective regarding the advantages/disadvantages of going into PE out of undergrad. Have you given any thought to how you would stack up against BB IB analysts if you choose to lateral in 2 years for whatever reason/if you will have a similar skill set to IB analysts in 2 years?

Jun 18, 2019 - 10:18am

1 - makes sense but you didn't really "do" banking.. you interned. Even 6 months into an analyst role, you're not even close to where you were as an intern.

FWIW, I think banking is a good start to IB/PE career. It's helpful if you're going to PE since (i) banks can usually give you more formal training, (ii) banks generally have people / more structure which is helpful as you need people to lean on and (iii) when you get to PE, you'll know the "tricks" bankers use (whether that's in the process, CIMs, etc.)

Either way, congrats on getting into PE right out of undergrad - very impressive and no small feat. Best of luck.

May be biased as I did the IB > PE track.

Jun 17, 2019 - 2:17pm

Do you think IB internships at a BB are a requirement for FT PE recruiting? Or will in certain cases firms consider other buyside/IB internships that don't fall into this category? My question's considering extracurriculars, gpa, target school are all checked boxes given PE recruiting is that highly competitive. Also, were certifications/any specific clubs crucial to your interviewing experience? I only ask this because we barely have work experience to put on our resumes at this point in our careers and it gets hard to differentiate yourself with so many 3.9 targets for so few positions.

Jun 17, 2019 - 6:53pm

It's not a requirement per se, but ideally you'd have a junior summer internship in either a reputable bank in a front office role, management consulting, or some other interesting intership that shows who are you are a person (e.g. Venture for America or an unique startup). The other who interviewed for my role, and those we have interviewed the year after have all come from various IB/consulting/PWM/S&T backgrounds.

Unfortunately every year things get more and more competitive. It's easier to stand out now if you have a more non-traditional background (e.g. studied CS or dual majored in engineering and finance), because the technical skill set you might be able to bring to the firm is different than those who came from strictly accounting/finance programs. That said, those do have a distinct leg up in terms of the day-to-day work.

I don't think I had anything special on my resume, so I think being able to get that first call is really important, and it comes down to distinguishing yourself in the interview. Clubs matter less after your junior year, I've found.

Jun 17, 2019 - 6:57pm

I got my offer at the end of August two weeks after my summer internship ended. This was a slightly accelerated process as I had some exploding offers, but due to how early banks recruit now, we have also started recruiting earlier. I cannot tell you the number of sophomores/juniors who have called in the last couple of months who are trying to network into a potential FT position here.

I did a little networking during my junior summer, but it was all remote (you have very little time to go anywhere as a banking intern trying to get a return offer) and through alumni, though I didn't network with my current firm at all.

Jun 18, 2019 - 12:15pm

Congrats and thanks for the ama! I'm wondering if the PE firm u will be joining is on par with most of the exits of the 2nd year analysts in ur BB group? Also, how is the interview process like? Were u expected to build an LBO or anything very technical?

Jun 18, 2019 - 2:04pm

I've actually worked at my current firm for a year now, but thank you! It's a MM PE firm with a decent amount of AUM ($10bn+) and a strategic focus so would say it's on par with analyst exits. There are so many more MM PE firms for every MF, after all.

Superday interview consisted of 5-6 rounds and also a social round so you end up meeting a good portion of the whole firm. The interviews for PE analyst roles typically involve a paper LBO / consulting case study and stops there. The PE associate roles at my firm, however, are much tougher (i.e. excel modeling test for a few hours based on an abbreviated CIM, and have to write up an investment recommendation afterwards). When I was debating whether I wanted to take this offer versus a BB offer, something that came to mind was the fact that associate interviews would be significantly tougher, so it would be good if I get in while the interviews are still much easier.

Most Helpful
Jun 19, 2019 - 9:43am

God I respect the hell out of that response; too many people go to extremes and seem to think someone only got the offer because of daddy/minority status or they were some interviewing demigod. In reality, few things are as straightforward as what you read on a WSO forum

Jun 19, 2019 - 1:10pm

also curious as to what's your opinion on credit PE? saw your post earlier from a while back!

Jun 21, 2019 - 3:10pm

The responses I received as well as conversations with others are pretty consistent. Credit PE is typically more predictable, better hours, but the work might not be as interesting. Credit PE firms often get a lender model from PE firms (though they do their own modeling), and it's a simpler exercise to try to find out how likely the company will go bankrupt or not return their dollars.

Quite frankly, a friend recently left credit PE to come to normal PE and said he felt bored in credit PE. The compensation upside is also much higher in PE (taking on higher risk to seek higher returns, after all). That's not to say credit PE isn't ludicrous or interesting, especially on the distressed side, but it's probably easier to go from normal PE to credit PE than vice versa.

Jun 19, 2019 - 4:21pm

Do you see any or have you heard of any candidates from maybe non-traditional backgrounds (credit underwriting at banks, analyst roles at reits, etc.) successfully receive offers, assuming they have some experience in the same asset class?

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

  • 1
Jun 21, 2019 - 3:03pm

Certainly. We've interviewed some people with asset management and consulting experience, and one person who came from credit (but buyside, not sellside). The hard part is probably getting the chance to be interviewed, and using the resources available online to prove yourself (which is by no means easy). The reality is that there are very few open spots in PE, so sometimes you might have to trade down a position (i.e. worked for 3 years and still come in as an analyst or whatever entry-level position).

I also know off-handed of someone who got to a superday stage with a very well known megafund PE (but not the standard ones who finish on-cycle on a weekend) with a credit underwriting/slightly DCM background.

Jun 25, 2019 - 4:49pm

You're listing a high range of amount. Base is a bit higher, though bonus is lower, since there's a performance bonus cap that you can reach. It tends to be that PE in its lower tiers comp less than IB, but at the higher levels it all depends on firm performance.

I would say that typically most PE firms promote at most a very small subset of associates in a 1-2 year program. My firm doesn't do that, and people have historically stayed on and got promoted, which is a rarity in this space. The reason is because the funnel is small and someone new receiving carry means someone needs to give some of their own carry.

Jun 25, 2019 - 4:58pm

How are you liking your PE job now, if you're still an associate?

Well, analyst to associate was 2 years historically, though now it's 2-3 years depending on how good someone is. If someone doesn't make associate they just stay as an analyst. We haven't had that many people leave the firm in the past, and the vast majority of those who left left PE entirely to do something else for various personal reasons.

Very valid concerns. I wouldn't have picked my firm if 1) the firm seemed to really value coaching its members, and 2) we had just finished fundraising for a new fund that was double the size of the previous fund so that meant more chances of closing a deal. In the grand scheme of things, an additional year isn't really a concern, I've seen.

Jun 24, 2019 - 10:22am

I know two older college mates who are current interns at Blackstone. How much tougher is it to get an internship and full-time offer from BX compared to IBD at JPM GS MS? Does the BX internship and full-time offer compensation far exceed IBD? I feel awkward asking older friends these questions. Thanks!

Jun 25, 2019 - 5:00pm

I really can't speak to that since there are so many more elements to getting a full time offer that has to do with group dynamics, performance, and how many spots there are. My personal view is that it's easier to get a full-time offer from BX (unless one is in a group that primarily doesn't take analysts, structured like Apollo's internship) than at a BB possibly due to BX not likely to overhire its summer interns.

I would ask your friends at the end of their summers and get their views.

Jun 25, 2019 - 4:51pm

Pre-full time postings may be found through your school's recruiting portal, applying to firms online, or just reaching out to someone at the firm (since most firms won't actually have an application portal). Beyond that headhunters will be your primary point of contact if you're trying to target many firms.

Jul 2, 2019 - 3:37pm

Hey - Could you give some insight as to what the interview process/level of technicals you were asked. I'm currently in the final rounds at a MF for a fulltime analyst role and not sure what to expect for my interviews with partners

Jul 11, 2019 - 7:53am

Every firm interviews differently, but typically the more senior people want to ask you consulting-type questions to gauge how you think about industries and companies, potential investment risks and merits (More true for firms like Warburg). They might also ask you more behavioral questions to get to know you as a person.

VP and associates would tend to ask more technical questions

Jul 29, 2019 - 3:42pm

Hi, I am a rising sophomore at UMD, college park. I am a Smith School of Business student, and i know i want to get a Finance degree and either a minor or a second major. I know there is a lot of controversy between this question and other people's answers and Point of view but i'd like to hear your thoughts. My ultimate goal is to get into a buy team in PE at a respectable firm (later on in the years obviously lol)

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