Struggling PE Analyst

Hey guys - for background on me, I am a first year analyst at a MM PE fund. Since starting in January, I've found myself struggling with the responsibilities that are being given to me, and frankly feel that I am performing poorly.

When I signed on, the idea was for me to do the standard 2 years as an analyst, and assuming good performance, be given the opportunity to be promoted to associate. I am increasingly feeling that this is unattainable based on the massive skill gap between myself and the associates at my fund. I did not have an IB background before joining the fund, and unfortunately my group does not have a formal structured training program to address that shortcoming. This has led me to feel like I'm being staffed on workstreams that I'm incapable of completing without hand holding, and often results in one of the associates having to bail me out and complete the task for me (e.g. being told to complete granular data cuts / analyses that I don't fully understand, trying to pull together an LBO with minimal explanation, etc.).

I am trying to figure out how to a) bridge this skill gap through self study / proactively seeking some form of training from my fund or b) think about lateral opportunities that would provide a stronger foundation to make the jump to associate. I really want to avoid the lateral given that the fund is a great cultural fit and seems to offer a lot of upside if I can stick it out. I'd also ideally want to avoid lateraling to IB given that I have a direct shot at a PE associate position, but I understand that many might argue that it is a necessary hoop to jump through in order to be successful on the buy-side.

With all that in mind, I'm wondering if any former PE analysts from MM / less structured programs have advice for how to develop the skillsets necessary to succeed during the analyst years, as well as seamlessly make the transition to associate. I want to make the most of this opportunity and don't want to throw in the towel before exploring every alternative, but I also want to be realistic and make sure that I'm making the right career moves for a long term position in the industry.

Would really appreciate any suggestions or advice you guys might have - thanks!

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Comments (15)

Most Helpful
  • Associate 2 in PE - LBOs
Jun 22, 2021 - 6:13pm

When there's an analysis you don't know how to do where someone has to bail you out, redo the analysis from scratch without looking at the answer. 

If you have to look at the completed analysis, start over. Repeat until you can do the analysis unprompted. Then, come back in a week and do it again. If you can't do it unaided in a week, repeat the process until you can.

The hardest thing to find will be having someone explain something to you. Only you know your firm so you will have to figure that out. If I were you I would find a sympathetic associate, explain your predicament, explain the above solution (if you like it and choose to do it - nobody will blame you if you choose to lateral for more structured training), and then ask for them to be a sounding board when needed.

Poor training programs are the worst so I sympathize. You are between a rock and a hard place. It sounds like you have the work ethic so I don't think it's your fault, but that doesn't really matter when the only thing that matters is performance. It's also very hard to learn during remote environments, so don't beat yourself up until you really try more approaches at getting better.

Good luck!

  • Analyst 1 in PE - LBOs
Jun 23, 2021 - 12:32am

Thanks man, appreciate the feedback. Agreed with your point that being proactive and is the make or break - that was the consensus from my friends in industry when discussing the pros and cons of an unstructured MM program. Will definitely be less passive when it comes to deliverables and make sure to understand my mistakes inside and out

Jun 22, 2021 - 7:05pm

On a positive note, they saw something in you to hire you without the IB experience. I think they knew this was to be expected. Continue to push through and pay attention to the above. Perhaps have a conversation with a higher-up to some recommendations on the essentials to learn. You'll get it, man. Even when you do, you'll probably get a monkey wrench thrown in now and then. 

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  • Associate 2 in PE - Other
Jun 22, 2021 - 7:08pm

What was your background if not IB? How much corporate finance / financial modeling work did you really have prior to starting in PE? How well do you understand corporate finance concepts? I don't mean this in a condescending way, but are you able to truly view a companies financials as organic and immediately understand how small changes reverberate throughout the whole? Your issue may be that you simply haven't spent enough time living in the numbers / model to fully immerse yourself with the way financials work and flow throughout each statement. Accounting is no different than speaking a language, and once you become fluent you should easily be able to be handed a set of assumptions (such as for an LBO) and spit out an output with little problem. As others have said, practice modeling various scenarios from scratch until it is second nature. Don't just repeat the same problem set or try to memorize the order of operations, really try to understand each scenario and what the numbers are telling you. When it comes to scrubbing granular data sets, are you referring to industry specific metrics? I know it would be tough for someone without a software background to be thrown into the deep end on running a cohort attrition analysis without some handle holding or instruction, for example. Such things you will pick up with experience but in your free time search industry white papers or connect with someone you feel comfortable asking questions to so you can learn why each metric is important and what they mean. I'm sure your firm has a shared drive with old materials, you can also review past memos and models to get a better sense for how things have been done in the past and how your team may look at certain industries / what they think is important and why. For reference, I work in PE and have a public markets background (no IB) where detailed models were the exception not rule.  

  • Analyst 1 in PE - LBOs
Jun 23, 2021 - 12:24am

Thanks for the detailed response. For context, I was hired out of undergrad and studied finance. I would say my accounting knowledge is sufficient but definitely could be improved. What tools would you suggest for becoming more fluent with acc / corp finance concepts that are important for modeling? I was thinking of starting with rereading my wso / biws guides, but if there's a more efficient resource for understanding the models I'm expected to build then I'd love to hear about it

  • Associate 2 in PE - Other
Jun 23, 2021 - 8:07am

Those are good resources and I'd refer to them as quick references for concept checks etc. I think you'd benefit from going through your shared drive and pulling CIMs from old deals, taking a stab at building the first cut LBO or whatever other analysis your team ended up doing, and then checking against internal models. The more real world reps you get in the better

  • Associate 3 in PE - LBOs
Jun 22, 2021 - 7:30pm

First off, I would cut yourself a bit of slack.  You've been on the job <6 months in a remote environment.  It took me a year to really feel comfortable in my PE gig and this was with IB experience.  If you really feel like you're missing the mark, reach out to your associates for some informal mid-year feedback.  It sounds like a good place culturally and I expect they aren't trying to set you up for failure.  

  • Prospect in IB-M&A
Jun 22, 2021 - 7:36pm

Unfortunately I don't have any advice for you but would love to hear what analyses you have been tasked with. I'm joining a PE fund as an analyst soon so would like to be somewhat prepared

Jun 23, 2021 - 1:28am

I assume you have access to all the deal folders/precedents. I would look through as many as possible and if your firm is somewhat organized, you should find plenty of examples of the most common types of analyses/models. If you were smart enough to land a PE job out of undergrad, none of this stuff should be that hard for you to self-study. 

Jun 23, 2021 - 1:38am

My guess is you feel overwhelmed and are over estimating your under performance. Lots of good advice above. Also be proactive with the associates in making sure you're not falling off track. They know what they hired and are likely ok with it for a while as you progress. I'd have open dialogues with people that you feel close with and can trust about feedback. What about the other analysts - presumably you're not the only analyst hire. Also, most people dont know what they are doing for 6-12 months anyway. So just try to absorb as much as possible and self study. 

Jun 23, 2021 - 9:51am

I've been in a similar situation and ended up alright. Honestly, grinding through weekends doing self study is the way to go. It doesn't mean you become a shut in and don't see friends; you just need to dedicate 10 hours a weekend to studying. There's an inflection point where everything starts to click and feel very intuitive, which is where you want to try to be.

Once you understand the logic, learning new skills becomes easier. I recommend buying one of the LBO and M&A self study training guides as a starting point. You unfortunately have to live and breathe this stuff 'Rosetta Stone' style for a few months, if not a year, to get to a solid place. From there, it'll get much easier.

Jun 25, 2021 - 6:22am

I think you should see it as a positive that your recognize the gap and are willing to improve. It does mean you'll have to work your butt off (since you haven't had a more traditional background) but with repetition you'll start to develop some intuition.

Aug 11, 2021 - 10:52pm

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