Random Thoughts on MM PE Analyst Interviews

I recently provided a friend of a friend with some random thoughts on interviewing for an analyst position at a MM PE fund. He seemed to think they were helpful, so here's a slightly cleaned up version of some of it in case anyone cares. Obviously this is just one data point, so take it for what its worth.

As way of background my firm is an established MM PE firm but for whatever reason isn't very aggressive nor organized when it comes to managing our analyst recruiting process. As a result many of the "best" candidates are usually gone by the time we run our process. Not that we could beat out KKR or Blackstone for a top candidate, but similar MM firms who run a tighter process seem to end up with much better analysts than we do. Most of our candidates are on the standard IB analyst -> PE -> MBA track.

First off, let me touch on a subject that is always mentioned: Networking. I cannot overstate the importance of this. It is absolutely huge if you have a relationship with a top guy at a fund. A couple of candidates who came in through the top partners at our firm were absolutely terrible and not really qualified. Yet there was HUGE pressure to hire them. In the end the candidates were so unqualified and performed so poorly during the interviews that we didn't hire them (after multiple interviews of course), but had they been even half way competent we would have had no choice. Heck if you have ANYBODY in your corner you have improved your odds tremendously as some people really don't give a shit who we hire as an analyst as long as they aren't "obvious" duds. Just one supporter can do wonders, assuming you had a good interview and a decent resume. Hell, even if your resume sucks, as long as you are in the process you can still get hired with a great interview if your "competition" tanks during their interview.

In the past we did a combination general PE/finance knowledge / fit interview combined with a case, although I am not sure if we will keep this format going forward. Many of the kids I interviewed seemed to have little concept of how PE/the buyside worked and the few that did didn't really have much of a clue about the MM. I really believe that anyone who spent a couple of days reading the various thread on MM PE funds here on WSO would be more knowledgeable on the subject than 95% of the guys I interviewed.

Random piece of advice: If you put a transaction on your resume you had better freaking know it. There is a chance someone interviewing you actually bid on that exact deal or maybe they did a different transaction in the same industry. Either way the guy sitting across from you will ask you questions about it. Actually if you know your deal, it can be a great way to build a rapport with the interviewer: "Shit, we bid 5x on that company and thought we were being aggressive. We didn't even make it out of the first round..."

"Yeah some of those bids were crazy, we couldn't believe them when they came in, but most of them didn't have financing...we tried to preach a bit of caution...but sometimes when the seller sees that big multiple...."

"No wonder..." followed by the interviewer babbling for 10 minutes about why he only bid 5x and how smart he is for not overpaying...

In general the performance on the case interviews I participated in wasn't all that great. The number of folks who were unable to come up with a model that remotely made sense was shocking. And by "sense" I don't mean using poor assumptions, but rather something where you can tell there is a bust in their model without even looking at it. Also with regard to assumptions, if the case has go-forward "management projections", don't take them at face value. Discount them, especially if they contain a lot of revenue growth and cost reductions.

In general I think most candidates I interviewed weren't very well prepared. I understand that the work that people are putting in on the banking side is brutal, and finding time to prepare isn't easy, but if you spent a little less time running ass on facebook and put in a few hours preparing for an interview you will be in a lot better shape.

Comments (12)

Jan 23, 2011

Great write-up man, really appreciate the insight on PE interviews!

P.S- Can I really get away with saying "shit" in an interview?

Jan 23, 2011
Denver Monkeyannabe:

Can I really get away with saying "shit" in an interview?

Feel out your interviewer but in some cases, you can get away with saying a lot more than that.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Jan 23, 2011

nice post... sb for you

Jan 23, 2011

Very helpful.....thanks for posting

Jan 24, 2011
Ransom Monkey:

I recently provided a friend of a friend with some random thoughts on interviewing for an analyst position at a MM PE fund. He seemed to think they were helpful, so here's a slightly cleaned up version of some of it in case anyone cares. Obviously this is just one data point, so take it for what its worth.

As way of background my firm is an established MM PE firm but for whatever reason isn't very aggressive nor organized when it comes to managing our analyst recruiting process. As a result many of the "best" candidates are usually gone by the time we run our process. Not that we could beat out KKR or Blackstone for a top candidate, but similar MM firms who run a tighter process seem to end up with much better analysts than we do. Most of our candidates are on the standard IB analyst -> PE -> MBA track.

First off, let me touch on a subject that is always mentioned: Networking. I cannot overstate the importance of this. It is absolutely huge if you have a relationship with a top guy at a fund. A couple of candidates who came in through the top partners at our firm were absolutely terrible and not really qualified. Yet there was HUGE pressure to hire them. In the end the candidates were so unqualified and performed so poorly during the interviews that we didn't hire them (after multiple interviews of course), but had they been even half way competent we would have had no choice. Heck if you have ANYBODY in your corner you have improved your odds tremendously as some people really don't give a shit who we hire as an analyst as long as they aren't "obvious" duds. Just one supporter can do wonders, assuming you had a good interview and a decent resume. Hell, even if your resume sucks, as long as you are in the process you can still get hired with a great interview if your "competition" tanks during their interview.

In the past we did a combination general PE/finance knowledge / fit interview combined with a case, although I am not sure if we will keep this format going forward. Many of the kids I interviewed seemed to have little concept of how PE/the buyside worked and the few that did didn't really have much of a clue about the MM. I really believe that anyone who spent a couple of days reading the various thread on MM PE funds here on WSO would be more knowledgeable on the subject than 95% of the guys I interviewed.

Random piece of advice: If you put a transaction on your resume you had better freaking know it. There is a chance someone interviewing you actually bid on that exact deal or maybe they did a different transaction in the same industry. Either way the guy sitting across from you will ask you questions about it. Actually if you know your deal, it can be a great way to build a rapport with the interviewer: "Shit, we bid 5x on that company and thought we were being aggressive. We didn't even make it out of the first round..."

"Yeah some of those bids were crazy, we couldn't believe them when they came in, but most of them didn't have financing...we tried to preach a bit of caution...but sometimes when the seller sees that big multiple...."

"No wonder..." followed by the interviewer babbling for 10 minutes about why he only bid 5x and how smart he is for not overpaying...

In general the performance on the case interviews I participated in wasn't all that great. The number of folks who were unable to come up with a model that remotely made sense was shocking. And by "sense" I don't mean using poor assumptions, but rather something where you can tell there is a bust in their model without even looking at it. Also with regard to assumptions, if the case has go-forward "management projections", don't take them at face value. Discount them, especially if they contain a lot of revenue growth and cost reductions.

In general I think most candidates I interviewed weren't very well prepared. I understand that the work that people are putting in on the banking side is brutal, and finding time to prepare isn't easy, but if you spent a little less time running ass on facebook and put in a few hours preparing for an interview you will be in a lot better shape.

Great thread. Can you provide a little more insight into the interview process at MM funds namely typical finance questions asked as well as what your expectations where from the case interview and more detail into what candidates did incorrectly?

Jan 24, 2011

Need more posts like this.

Jan 24, 2011

good lookin' out man

Jan 24, 2011

Great post stooge miller

Jan 25, 2011

great post. +1 sb

Jan 25, 2011

How much does it help to know associates at MM firms? I have a few friends from college who did 2 years BB and are now finishing up their 2nd years at their firms.

I took a different route (Big 4 TS for 2 years --> MM Bank, now in my 2nd yr), and realize I'll need all the help I can get to get a PE job. From your experience, how much influence would an associate have (i.e. no help really, could help get an interview, would be very helpful)?

Jan 26, 2011
IUHoosier08:

How much does it help to know associates at MM firms? I have a few friends from college who did 2 years BB and are now finishing up their 2nd years at their firms.

I took a different route (Big 4 TS for 2 years --> MM Bank, now in my 2nd yr), and realize I'll need all the help I can get to get a PE job. From your experience, how much influence would an associate have (i.e. no help really, could help get an interview, would be very helpful)?

Could help a ton. Or not at all. Really depends on the firm and the actual associate. My view is that if the guy who is helping you is well regarded at the firm and is really willing to stick his neck out (ie saying "This guy is the man. We need to hire him.") then it will help a ton. If he is considered a dud or his "help" is just forwarding your resume on to whoever is running the process, then its not going be of any use.

Unfortunately, my experience has been that guys are fairly cautious about going all in on a recommendation at their own firm (especially if its a small shop) because if anything goes wrong they will catch a ton of shit.

Jan 26, 2011
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