I'm having the first one soon w/ a PE shop.
Any thoughts and insights you could provide for?
Questions to Ask at the End of a PE Interview
Just like any interview, private equity interviews will likely end with the interviewer offering you the chance to ask questions about the company and it is critical to have good questions prepared. Going into the interview - you should already have an understanding of the industry that the firm / group is focused on and have an idea of the usual "check size." So you should instead focus on asking questions about the firm's culture and investing style.
Here are a few other questions you can ask to both feel out the firm and give them the idea you know what you're looking for in an employer:
- Ask about time split between portfolio company analysis/operations and evaluation of new investment opportunities. Some firms "buy and forget", while others are much more active managers and might send you out for a few days with the company several times a quarter. Get an idea of which type of place you're interviewing with.
- Ask what specific types of deals they're seeing lately and if there are any interesting trends in their industry niche. For example, I know consumer shops are seeing a ton of "bar" companies right now (nut/granola/protein) - people are split as to whether they're a new wave in consumption or just a fad.
- Ask about career track. Is it a 2 year program followed by business school? Is there an option for direct promote to a partner track position without an MBA? If their associates have done both, which is the more typical path? Important to know as you consider your career prospects.
- How are deals typically staffed?
- Walk through the existing funds - what kind of MOIC/IRR for each? If you get an offer, ask for their valuation material or a summary of their portfolio, valuation marks, etc... Are you a more senior recruit? As for the PPM and or even a list of the LPs
- How invested is the current fund? How much dry powder? How is the fund raising process coordinated? What's your next target fund size?
- Who are the LPs, predominantly pension funds? Endowments? FOF? (Look for diversity and some strong anchor names). Is the GP 100% owned by the partners? (many MM funds have legacy GP interests held by funds that seeded them)
- Do you have operating advisors?
- Describe the committee process. Do associates participate? Memos? Presentations?
- Is there co-invest? Yes? Any levered co-invest?
- How do you source deals?
- How do you feel about investing in the current macro? Recognizing there is a pressure to put money to work in the 5 year PE cycle, what industries or strategies do you think make the most sense right now?
- Do you like your job? How would you describe the firm's culture?
As a general matter, you should know key portfolio companies, the firm's core industries / strategies and memorize everyone's name. See who is on the boards of which portfolio companies. Then be prepared to ask them about their deals and how they plan to exit. PE guys/gals love talking about their deals.
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