Monkey to Millions | Grace (Session 15) - IB and PE Recruiting Continues
About
In this session, Grace makes time in between her packed schedule to update all of us on her recruiting progress. From Blackstone to Ares, to Perella Weinberg, she has a ton of opportunities in front of her over the next several weeks to try and lock up her Junior summer internship very early. We review how to prep for private equity interviews as well as what to expect with the Perella first round she has in a few days.
Listen to the Monkey to Millions Podcast:
Or Listen to the Podcast Here:
Apple Podcasts
Spotify
Stitcher
Resources:
WSO Podcast (Episode 15) Transcript:
Patrick (CEO of WSO): [00:00:23] Hello and welcome, I'm Patrick Curtis, chief monkey of Wall Street Oasis, and this is monkey to millions. A show where you get a front row seat as I mentor young students and professionals to try and help them break into their dream jobs in the first cohort. You'll meet four students, all preparing for intense job interviews while trying to also balance a personal life and schoolwork. The goal of this show is to shine a light on the struggles of trying to break into competitive positions with a non-traditional background and to give you a roadmap for your own success. My hope is that as you get to know these four impressive students, you're inspired to dream big. Remember, these are real people, and this is their true story. Let's get to it in this session. Grace makes time in between her packed schedule to update all of us on her recruiting progress from Blackstone to areas to Perella Weinberg. She has a ton of opportunities in front of her over the next couple of weeks to try and lock up her junior summer internship very early. We review how to prep for private equity interviews, as well as what to expect with the Perella first round she has in a few days. Enjoy. All right, Grace. I think it's been about what over a month, at least a couple of months, at least. I think so, which has been my fault. I've pushed back this session too many times, so I apologize. So, yeah, I'd love to just hear an update I know you had last time we spoke, you had some interviews kind of around the corner, right?
Grace: [00:01:51] So I had a lot of things, I think in the works that but I'm in the middle of it right now, so. Oh, you are. Ok, good. Yes. Kind of in the thick of recruiting right now. So I want to start I had first rounds last week with three different groups at Blackstone, three different real estate groups. So their acquisitions group, Asset Management Group and then their real estate investment trust, they call it break. So that's a fairly new group, but it's like a non-traded, a public non-traded. And so I'm anxiously waiting now to hear back. I feel really good about how those went, so we will see it's just it's so difficult to read, especially because with Blackstone, they hire so few people and I have no idea how many people they give first rounds to and then how many people they give super days to, especially with.
Patrick (CEO of WSO): [00:02:49] This would be for junior summer, correct?
Grace: [00:02:50] Yes. This is all for twenty two.
Patrick (CEO of WSO): [00:02:53] Ok. And so you still have the city coming at City Summer coming up?
Grace: [00:02:58] Yes. And even if I don't get anything right now, I get a guaranteed return offer at City. So that's a really nice cushion.
Patrick (CEO of WSO): [00:03:06] Just like no matter what happens this summer, you're guaranteed.
Grace: [00:03:09] They said that they pretty much give return offers to everyone in the sophomore program for the junior summer.
Patrick (CEO of WSO): [00:03:16] So that's because of work from home or is that traditionally they've that's just
Grace: [00:03:21] How they do it, because this sophomore program is so small. So it's only 30 people across all divisions of the bank, and that includes things like internal audit and risk. But so within banking itself, I think there might be five or six of us sophomores. So it's not a large number. It doesn't make too much of an impact to invite those that small group.
Patrick (CEO of WSO): [00:03:43] That's great. That's good to know. It's that takes a lot of stress out of everything. Yes, it does. It allows you to perform better. The interview is you're like, Well, I
Grace: [00:03:51] Hope so, but I still want Blackstone's so badly, so I will. I'm still very stressed about that.
Patrick (CEO of WSO): [00:03:58] Well, I mean, and it's all the real estate. You said it was three different real estate, is that
Grace: [00:04:02] That's it's all real estate. You specified that that interested you or. So I'm also really interested in infrastructure, and I because I took I did their women's program. So that's what helped me get into this accelerated process with them. And when we were filling out those applications for the accelerated process, they had us rank the group and I actually rated infrastructure first. And I always thought that infrastructure would be a little less competitive, too, but I didn't get an invite for first round with them. Wow, which surprised me because I had spoken with more people in that group, at least as a percentage of the total versus real estate. But I'm still very happy about three groups of it's
Patrick (CEO of WSO): [00:04:45] Such a crapshoot. It really is. So don't feel bad, right? There's so many factors.
Patrick (CEO of WSO): [00:04:50] There's so many factors. It's just like they get flooded with so many great applicants from right from all the top schools in the world. So the fact that you're getting interviews is a great sign. Mm hmm. This early on so. Ok, so it's kind of just a wait and see. Do you feel like you feel like you said it went well, but it's kind of like if they don't invite you back soon, then you'll pretty much assume it's a no
Grace: [00:05:16] And like a week or so. Yeah, it's difficult to tell. It's been really slow moving, especially with real estate. It's been slower than P or some of the other groups.
Patrick (CEO of WSO): [00:05:24] And you just started like you just had first rounds now, Right?
Grace: [00:05:28] And there's some other divisions within Blackstone where they're already going to be giving out offers at the end of this week. So one of my friends who also did the women's program is interviewing with their private Wealth Solutions Group, and she's meeting with the group head as her final Super Day interview today, so she'll have an answer in a few days. And but they've been the quickest moving group, so we'll see. I think I've been following the thread on Wall Street always. Just a lot, actually. And OK, it sounds like when I had my first round, two of my three first rounds last week were on Friday, and I think that was the last day of first rounds. So I'm hoping that means that maybe this week, if I'm invited for any super days, I would be finding out soon, hopefully. So we'll see cross fingers.
Patrick (CEO of WSO): [00:06:15] Yeah, yeah. Well, I mean, if it doesn't work out, you still have a great firm to go to and a great program to go to, so. Mm hmm. And if you think about it, you know, all next year to just be even you can keep recruiting in the sense of like informally and keep building the network so that next year, there's just that many more opportunities for you. So is there any other are there any other first rounds coming up or anything like that? Yeah.
Grace: [00:06:41] SoI got into Perella Weinberg Super Urge their women's program, which I did, and because it's so small, they give guaranteed super days to everyone who does that. And so I have my Super Day with them this Friday, and that will be for 30 minute interviews back to back. And the nice thing is they so they do all their recruiting through Dartmouth Partners, the recruiting firm. And so that's who I had my interview with to actually get into the women's program. I didn't. I didn't interview with anyone at the firm, but they're offering us basically a free mock interview with Dartmouth Partners before our super days. So I'll be doing that on Thursday. And so I think that'll be really helpful to, of course, the mock interviews only a 30 minute interview, but at least with I'm assuming it's going to be more technical. So that'll give
Patrick (CEO of WSO): [00:07:34] Me they're probably going to they probably know what's being asked. So they're probably completely prep you. So just make sure if there's anything that you don't quite nail in that that you just go back and review that night, you have it like completely buttoned up. Exactly. Yes, a great, great firm. So that would be for some junior summer.
Grace: [00:07:56] Yes. And then so Perella and then I also I have a first round this afternoon with middle market private equity firm. Mm hmm. And that's somewhat like I originally connected there with a Fordham alum works there. It's a pretty small firm, but he was the one who got me into that process. What's the issue out there?
Patrick (CEO of WSO): [00:08:22] You know, I
Grace: [00:08:23] Actually don't remember.
Patrick (CEO of WSO): [00:08:25] Is it like five investment professionals, 10 20?
Grace: [00:08:29] I think it's around 10 to 15. Mm hmm. I know they're growing. They started an analyst program. I think it was two years ago. So I guess so. It's another right. It's a very different option from everything else I'm doing. I cannot find the amount just looking.
Patrick (CEO of WSO): [00:08:51] Yeah, that's actually if you end up getting that. You know, I'd be curious to hear I'd want to know before saying, yeah, go jump, there is, you know, be very careful about where you go to like middle market private equity shops to make sure that they are indeed growing. And it's they're not like in the middle of fundraise that they say is going to close in a few months. And then like, you're there for two years and like, you haven't done a deal, right? So it's just you've got to you got to ask them questions like how much dry powder is left in the current fund. What's the size of the current fund? What's the target for the new fund? How much of it is actually committed like you have? You should ask the tough questions, especially because it's a little more scary to go straight to the buy side and not have that that like regimented training, although lifestyle wise, it could be like 60 hours a week instead of 80 to one hundred. Right? So it can be like if you actually want to have a life in your early twenties, it could be a great option for you. Right? And you know, that is something they'd be like. That's not an exaggeration. The extra 20 hours and who knows, maybe this middle market shop is or they work really hard to, but they tend to be a little bit more a little less face time, a little bit. It's not about the client and the PowerPoint so much as it is about getting the analysis correct.
Grace: [00:10:08] Right?
Patrick (CEO of WSO): [00:10:10] So, so that's what's your thought. What's your thought on the buy side and jumping straight because I know it's a little bit more of an option now.
Grace: [00:10:16] It's definitely very tempting. I mean. I guess, like I said, Blackstone has always been my number one, and it's been that way for well over a year. But then I also with areas, capital areas, capital management. Yeah, that's the name of the area. So they also started an analyst program in the last couple of years, and I applied there, all doing as well. And they have a real estate group there, so I'm definitely interested in that. I haven't done a lot of like, I haven't spoken with anyone there, but they have an info. They've had info sessions each Friday of this month, pretty much open to anyone over Zoom. And so I'm going to go to the one this Friday, I think.
Patrick (CEO of WSO): [00:11:02] And it's also your first round or your Super Day, right?
Grace: [00:11:07] So this Friday afternoon, I'll go to that and their applications close, I think this weekend. So I'm thinking that after that is when they'll start giving out first round interviews. So that'll be another option to have, especially if by that point, I'll hopefully have a better idea with Blackstone. If I have any super days or what that how that's looking at me.
Patrick (CEO of WSO): [00:11:34] Like your background and what would be best for you? Like part of me says, go to the big name, like the get the Blackstone or get the city or you'll have that internship either way. Right? Part of me is like, Just go there if you get it, because it's like, so, such a solid name and you're coming from you're not coming from an Ivy League school. Just having that on your resume just looks really impressive for future things because people are still a little bit like they still lean on. Like, as much as people hate to hear this, they still lean on like school and GPA and stuff like that. Just because it's an easy proxy for like thousands of applications I'm talking to, like private equity, for example. Mm hmm. I think if you can get straight into private equity, my only concern would be, are you joining a place that has enough training where you're going to get the reps and you're not going to just be left to flounder? Because the one good thing about banking, even though the work life tends to be, can be really bad. The one good thing is it's a little more structured. It tends to be, you know, like they have good training. They have, you know. Near the whole staffing and all that set up now, of course, work from home is a totally different story and people have been getting swamped and quitting and you saw the Goldman thing that came out recently, I'm sure. Right? Like, that's not an exaggeration. And so you really should think, I mean, you'll probably see that a little bit this summer at Citi. And so you'll kind of get a hatred and be like, Well, I really don't want to do this. Or, you know what? I can handle this and I still want it. So that's going to be. It's funny because one of the other mentees he experienced that he was like, this is not for me. And he's like, I'm going to go take this job, get pays me two thirds of what I get paid in banking, but I have. I work half OK. Right? He's like, I'm going to do this, and then I have to. I have time to do side projects and other things. Hmm, right? You know, you have to think about that. And, you know, private equity, I think in terms of the work is super interesting, but it tends to leave you a little more like if you don't have a lot of if you don't have the finance background, if you don't have a lot of like actual initiative, you can and you need a little more guidance early on like I did because I was a liberal arts major and I was like, What are we talking about here? Then bang, it would have been a mistake for me, I think going straight into private equity. But for you, maybe it makes sense. I mean, you've been kind of on this track since freshman year. You're like, I know I want to do banking or, you know, so for people like you that are a little more prepared, more knowledgeable, kind of going into the whole process, it could be good to skip that whole. Even if it's only a year or year and a half right, it'd be a really good, really good option for you and for your health.
Grace: [00:14:14] Mm hmm. Right. Seriously, it's a big deal.
Patrick (CEO of WSO): [00:14:18] So. Yeah, I'm excited to hear that sounds awesome, it sounds like you're in a lot of you have a lot of potential great opportunities. It's like the ideal scenario, right? You have things locked up, you're in processes if you don't get Blackstone, whatever, like ninety eight percent of other people don't get flexible. You're just like, you know, it doesn't mean anything. And then I would just keep, yeah, keep applying. And then I think these private equity positions, would they be introduced for junior year as well?
Grace: [00:14:50] Yes, that's what these are awesome.
Patrick (CEO of WSO): [00:14:52] That would be great because then you'd get banking for sophomore summer. You'd get P.E. for juniors, you get a really good flavor of the firms and you'd be working with and then it's going to be an easier decision. Right? Especially since City, I think, worked their analyst pretty hard.
Grace: [00:15:09] Mm hmm. All right, so
Patrick (CEO of WSO): [00:15:12] That's good, you'll get like a true snapshot. It's hard to know for like whatever, eight to 10 weeks or eight to 12 weeks, but it's at least gives you a sense and you'll be around the analysts. You'll see what it's really like and stuff like that. So yeah, how can I how can I help? Um, I'm not sure.
Grace: [00:15:29] Update two is so my current internship, you know, the one I've been doing since September of twenty nineteen. So this time, I guess it's been about a month now. The managing director who I work under there moved firms and so he asked me to move with him. He knows I'm going to be at City this summer, but I moved firms with him, so I went into the office earlier this week and met all the new people, so that was really nice. But it's a slightly smaller firm in terms of number of people, but it's a really great, great platform. So like a great move for him and I think it'll be good for me to even just the next two months before the summer. In terms of the work, I'm doing too, because whereas before all the work I was doing was directly with my managing director for the most part, now I'm I might be able to get a little more involved with some other work, work a little bit more with certain analysts and associates. So that's exciting too was very unexpected. But yeah, you're
Patrick (CEO of WSO): [00:16:34] On your how to deal with that for your resume. I wouldn't necessarily have like two different places either. Take the new place that you went to and just have it all under the same thing. Or have it like almost like as a parentheses like, you know, move to blah blah blah or something, you know what I mean? Like, just so that it's you don't have like a whole new section, because then it can look like you were jumping or something like you're jumping firms and you don't want to give like a ton of extra space to that, especially when you're going to have Citi. And who knows what else,
Grace: [00:17:02] Junior summer, right? This will only be two months. That's what I'm thinking is the deal experience I have listed is, of course, from the Old Firm. So, yeah, just leave that. I'll have to figure that out when I next summer update
Patrick (CEO of WSO): [00:17:13] It or the summer.
Grace: [00:17:13] Yeah, coming up for nailing all the resume I've been submitting for all these applications was right as this was happening. So it's still just says good from that day to the present.
Patrick (CEO of WSO): [00:17:23] This firm? Yeah, and I wouldn't put in a whole other firm for two months. It's not worth it. Right? And I think the good part is if you do some additional work with analysts, just try and make yourself helpful anyway. You can be like, Hey, you don't want to make that pitch or you don't want to spread those comps, I can do it. Mm hmm. And just give you a little more reps in terms of doing like the actual analyst work. Exactly. That's good. That's exciting. So you have a couple more months there and then are you going to get a break at all before then you got finals.
Grace: [00:17:53] And so I am making myself, I'm going to give myself a break in May. I realize I haven't not been working since summer of 2019, so I'm going to when I have those couple of weeks after finals end, I'll make sure I'm finished with my current internship by then. Before I started City for the summer. So that way, yeah, a few weeks of rest,
Patrick (CEO of WSO): [00:18:16] Definitely a few weeks of just doing nothing. Lots of Netflix or, you know, maybe go to the beach or something and just like to do nothing, I think is the best, best thing you could do to clear your brain and just don't be studying anything. It's a sophomore summer internship. You don't need a study modeling then or do anything. Yeah, just relax. So, right,
Grace: [00:18:39] Very overwhelmed right now between work and school and recruiting. But I'm telling I know it'll be worth it like once if I get an offer out of this right now, or even if not once it's over.
Patrick (CEO of WSO): [00:18:49] Yeah, you're still meeting people certainty. Yeah, you're still meeting people. I mean, you're talking about tying up junior summer right now and your sophomore year.
Grace: [00:18:56] So yeah, exactly which is awesome. But yeah,
Patrick (CEO of WSO): [00:19:01] If it doesn't happen, you still have city to fall back on. You still have a bunch of other things and then it doesn't stop you from kind of getting into the normal recruiting cycle for next year. So. Yeah, it'll be fun, I think. I'm excited for you, I want to hear, I'm surprised you don't know yet. It's Blackstone took a lot longer and I guess the other processes
Grace: [00:19:23] Took longer. Yeah, it's been. It's been very drawn out, Blackstone. But we shall see.
Patrick (CEO of WSO): [00:19:31] Anything I can help with. Do you want to do any mock interviews, anything like that? Do you feel like your stories are good?
Grace: [00:19:37] I think so. Yeah, I mean, of course, the behavioral stuff, especially I've been through, because that’s pretty much the same for every interview. And then, yeah, right. And then, of course, my prep for all of the Blackstone interviews last week was a little different because real estate focused. So all the technicals are that it's not really thinking you have a real estate modeling course.
Grace: [00:20:00] I'm not sure I. What I was using to prep was actually my friend who interviewed with Blackstone last summer and kind of gave me a list of all the stuff, the questions he was asked and some different.
Patrick (CEO of WSO): [00:20:13] They ask you real estate specific stuff like cap rates and
Grace: [00:20:17] You know, yeah, but it's very high level and it's actually a lot more qualitative questions regarding real estate. So in some of the interviews, they'll say if you have one hundred dollars or hundred million dollars to invest. Tell me about what you would do with it, like what kind of real estate assets, all of that. And then depending on how much specificity you provide, they might ask you for more details. And then sometimes it's more just like, tell me about like a trend you've been following or something interesting in the real estate market recently. A lot of those kinds of things and like talking about the risk of different asset classes, the most technical that it got, at least in first rounds, was kind of knowing how to get cash on cash yield, given a certain interest rate and certain cap rate, that kind of thing. So very simple math. Yeah, tell me
Patrick (CEO of WSO): [00:21:04] About how you would even go about approaching the question of $100 million where you invest in real estate, what are you talking about, like diversifying and getting a different type portfolio together of different assets?
Grace: [00:21:14] No, they more so on a specific thing. So in one of my interviews, I talked about, of course, industrials the very safe answer. So I tried to avoid that because that's also like right now, especially during COVID. That's kind of something I feel like a lot of people would go to. So in one of mine, I talked about film production facilities and how there's a huge upsurge right now and demand for content, both because of the tense competition in the streaming services space, as well as the increase in consumption of content from stay at home orders. So because of that, the leases are becoming longer term on these production lots. So that adds a lot of stability to cash flows, less risk and then also the streaming services space regardless of COVID has, of course, there's been more and more streaming services popping up.
Patrick (CEO of WSO): [00:22:07] So HBO, right? So it's
Grace: [00:22:11] That. And then also with those types of assets, there's a really diversified revenue stream and that about a third of the revenue will come from the office space attached to the soundstage lot. Another third comes from the soundstage itself, and then the other third comes from different ancillary services like telecom or food services on set. So that kind of diversification and lower risk in some senses and with ancillary services, it provides an opportunity for cost cutting depending on who you're operating partner is so interesting. A lot to talk about. That's good. Yeah, and I
Patrick (CEO of WSO): [00:22:45] Love that when they're asking for that, are they looking for like? When you're constructing a hundred million dollar portfolio, there are they ask you for like one type of asset like that or is that like what is that one part? Are you saying, Hey, I'd put, you know, X percent to these types of assets? And then you say, like, OK, I'll put it, I like the reopening place. I'm going to actually, there's a lot of distressed malls out there, so I'm going to actually do some commercial take a
riskier, bet on some distressed assets. Is that type of the type of thing that you do or you're saying, Hey, this is where I'd put all hundred million.
Grace: [00:23:15] The way the question is structured, it's not really about the one hundred million in particular. It's more asking what just what would you invest in general?
Patrick (CEO of WSO): [00:23:21] What's most interesting to you right now?
Grace: [00:23:23] Yeah, exactly. So it's really focused on a single thing. So I talked about that. And then in another one of my interviews, I talked about retail space being repurposed in for industrial purposes. So a lot of closed down malls or empty mall spaces being used as distribution centers now and how it works well because they're large and flat, they already have industrial grade, our water systems, things like that location. So they work really well being repurposed and then E-commerce and everything warehouse. There are any
Patrick (CEO of WSO): [00:23:57] Big deals that have happen like that, like big trades that have happened. Acquisitions from real estate companies doing exactly that. In the
Grace: [00:24:05] News. I can't think of any specific ones on the top of my head, but I have read a lot about like smaller ones, and sometimes it's not necessarily new acquisitions, but people who are, I guess, companies that already own those spaces just going about repurposing it.
Patrick (CEO of WSO): [00:24:27] Yeah, it's interesting. It's a crazy, dynamic time right now. Mm hmm. So it's kind of it allows you to have more interesting conversations in the interview, which is good, right? Like, there's lots of ideas out there. Very cool. Well, it sounds like you're on the right track. I mean, it sounds like a great answer, and I'm sure you've thought about it a lot. So anything else I can I can help with and you kind of lead up to this Friday. You said Perella this Friday. Mm hmm, yes. And so this Friday and then potentially areas next week or the week after. And then what was then a small private equity fund? When is that one
Grace: [00:25:06] For a first round this afternoon,
Patrick (CEO of WSO): [00:25:09] This afternoon fund? So private equity. So OK, elbows.
Grace: [00:25:14] Mm hmm. Yeah. So the analyst that I spoke with told me to expect really just kind of classic banking questions and then maybe a couple of questions more private equity focus, but pretty high level in terms of, you know, what makes a good buyout candidate, things like that.
Patrick (CEO of WSO): [00:25:32] A quick tell me what makes a good buyout candidate right now, do you know? Yeah, stable cash flows. Yeah. And then if a good
Grace: [00:25:41] Management team, of course, I mean, that kind of a go to for anything and then also being in an industry that's not super cyclical. So it's easier to predict out cash flows. And you also want to be able to cover interest payments regularly as well. And just reviewing this earlier, but I'm blanking right now.
Patrick (CEO of WSO): [00:26:01] That's good. No, that's good. I think you got most of them. I think the ability to like potentially go in and make some operating improvements and increase margins.
Grace: [00:26:10] Potentially low capex requirements,
Patrick (CEO of WSO): [00:26:13] Capex, working capital requirements, so that such that when it is growing, it's not eating up, all the growth is and eating up all the cash. Mm hmm. Right. Pay down debt and then even potentially some asset, some heavy asset potentially could be good if you could get more leverage to boost returns. Um, but yeah, I think you've got to see what drives returns in a private equity buyout.
Grace: [00:26:39] What are the main drivers? A large part of it is the purchase price and then what the exit multiple is. And then also when there's the level of debt that you take on the debt equity ratio as well as the interest rate on the debt.
Patrick (CEO of WSO): [00:26:55] Yeah. And why? Why does more debt increase your returns typically?
Grace: [00:27:00] Well, higher leverage, the less equity that you put in up front, the more you can multiply that when you exit, if you take on higher leverage.
Patrick (CEO of WSO): [00:27:09] Yeah. And then what? What else is good about the debt in the sense of is there any other benefit from the debt?
Grace: [00:27:16] Oh, well, I guess that. In the sense that with private equity, you usually have a set or pretty set exit timeline, so you know, you can really predict out how you're going to be paying off the debt.
Patrick (CEO of WSO): [00:27:30] And I just I was thinking, just cash this yield interest, cash yield. Ok. Yeah, right. Yeah. I'm like, I'm just nitpicking, but it's good. Just want you to. It's this afternoon, so it's great. So you'll be ready. Yeah, you know it. And I think what else on the P side, they're not going to make you do a paper LBO or anything like that sources in use,
Grace: [00:27:53] At least not in the first round, it sounds like
Patrick (CEO of WSO): [00:27:55] Ok if they are. If you make it to like second round and they're going to make you do a paper LBO or. You can spend some time in the P interview course because there's a ton of little paper elbows just to go. There's another 20 minute elbow drills just do like three or four of those and you'll be like, OK, I got this. It's just do a few of those, because if you don't, it can. You can just take you a little bit longer than it should, and it'll be more impressive if, like, you just go in there, you're like done here, right? None of it's that hard. It's just being comfortable doing it. Having done the rest stuff like that, setting it up. And sometimes we'll give you like a really easy prompts. They'll be like, OK, you entered this business at five times EBITDA, UBS, you know, 10 million you exit, say, multiple in five years. They give you, like, really awe and it grows at 10 percent a year. They give you really simple assumptions and then you can just do it in Excel and like one little sheet, OK? Oftentimes, they won't even have you pay down the debt. They're just going to see if, like, you know, how to calculate IRR, Ok, and multiple on invested capital stuff like that. So. Um, what else for? Yeah, what makes a good investment? Do they invest it in any specific for the fund to invest in any specific industries? Or is it more generalist?
Grace: [00:29:13] It's fairly generalist, but their main focus is, ah, I believe, like business services and industrials and both people I've talked to at the firm. I've talked with about this and I'm very interested in industrials. So because of the nature of the firm, like if I were to go there, then I would be able to focus a lot of my time on that if I wanted to. So that's what most of my conversations have focused on so far.
Patrick (CEO of WSO): [00:29:42] Industrial, you're thinking
Grace: [00:29:44] More of the manufacturing and
Patrick (CEO of WSO): [00:29:46] And stuff like that. Cool. That's awesome. Yeah, no, it's exciting, so I'm trying to think of are there deals that they've announced? No, Ernie, like. You mean, like companies,
Grace: [00:30:00] I've looked a little bit at that, but that's also what I'm going to be reviewing beforehand is after
Patrick (CEO of WSO): [00:30:04] I review that, just you can kind of if the right opportunity presents itself, you just you can say, you know, for example, your deal with that, I thought was interesting because this space is growing here and I can see how you guys are. I think it'll just show that you've done the research and done the homework on them specifically. Which will hopefully set you apart. Yeah, I think it's tough because as a sophomore interviewing for private equity, it's like you have to know all this stuff like you haven't even had the banking yet, so. Hmm. It's hard because, you know, how many elbows have you run in your in real life? Not many,
Right? If it's like you're still doing the comps and getting the valuation underneath, you know, getting that and you’re doing any DCF or anything like that at your current internship?
Grace: [00:30:52] I haven't really. Most of the valuation work I've touched has been precedent, transaction precedent transactions. Because it's all very lower middle market, right?
Patrick (CEO of WSO): [00:31:02] Right. Ok. So, yeah, I think good luck this afternoon. Anything else I can answer about interviews? No thanks. I'm trying to think what else. So yeah, that. No, they're firm pretty well. No, the deals they've done recently, especially. Because if you knew a little bit about what's happened in the specific spaces, if there's like a little niche space, you know you don't want to oversell what you know, but just showing that you've read up a little bit, it's nice. Yeah, have I'd like list out the six seven things whatever you look for in a good investment candidate is that's very high. I'm pretty sure they're going to ask you, right? So just being able to go Boom, Boom, boom, boom easily through it will be good. And then I think that's it. You'll be in good shape. Mm hmm.
Grace: [00:31:51] Ok. Ok. And then yes, for this Friday with Perella Weinberg
Patrick (CEO of WSO): [00:31:57] Technical,
Grace: [00:31:58] Right? And they told me. So doing the women's program, we get assigned a mentor. And so I've she gave me a good idea of what to expect as well. But there'd be one interview with probably a more junior person where it would just be entirely technical. And then the other ones would be like partners or other senior, more senior people. And those would be higher level conversations, especially because I've had banking experience, she said. Probably be able to talk about what you have listed on your resume and what deals you've done kind of things you've worked with, right?
Patrick (CEO of WSO): [00:32:32] Like if you say I did, oh, tell me about that, right? Tell me about what presidents? What were the multiples like? Knowing that really well will be important to see if you actually did it or if you were just like kind of sitting alongside and not paying attention. Right?
Grace: [00:32:47] So a lot of the prep I've been doing too has been going back to like old, the pitch decks I've worked on at my internship reviewing those companies. And kind of that’s perfect for private
Patrick (CEO of WSO): [00:32:59] Equity recruiting. We say the same thing to be able to talk about your deals as if they were an investment. That's something else that might happen this afternoon if on your resume, you have some transactions, right? Yes. So they may ask you, was this a good deal or not? Mm hmm. And so being able to actually speak to those deals as if you were an investor and you can say, actually, no, I don't think it was a great deal. It's OK. There's not that's not bad to say that. Or you could say, Yeah, I think it was a great deal. They got this. Here's the strategy. They're doing a roll up. It's a tuck in acquisition. Or here are the synergies with this company of how they're going to grow. But don't be afraid of saying, I think it's I think they overpaid. You know, I think it's I don't think it's a great candidate, as you know, it was good. It was a good mandate for the bank. You know, it was. But in terms of the actual deal for XYZ buyer, maybe you're on the sell side and you thought it was a good thing that the buyer overpaid or something like that. And that's fine. But I would be ready to at least. Mention that and talk about that, talk about the numbers, OK, if you have do you have like EBITDA numbers and multiples? It was. You've done M&A transactions was all capital raises.
Grace: [00:34:12] No, it's all M&A. So I yeah. And the one that I can talk about in the most depth just closed a couple of weeks ago and hasn't been announced publicly. But I'm familiar with multiple ranges on that. So I.
Patrick (CEO of WSO): [00:34:25] Ok. So you know how much it was acquired for what the model was right of EBITDA? Mm hmm. Yes. Ok, and then what was it like seven times, ten times. No, it
Grace: [00:34:35] Actually came in around like, I think, 10 or 12 times. Ok. Surprisingly, how much debt did they put on it that I'm not sure about?
Patrick (CEO of WSO): [00:34:44] I would know that.
Grace: [00:34:45] Hmm. I don't know if I have access to that now, but
Patrick (CEO of WSO): [00:34:50] They may want to like.
Grace: [00:34:52] But it was still really small, so it very likely could have been. No doubt. Because it was a it's a larger choir too. So do you. So 12 x EBITDA?
Patrick (CEO of WSO): [00:35:03] How much was that? Like 20 million. It was like a $2 million business. It was like a 20 million, yeah.
Grace: [00:35:08] But Evita was only like one point eight million.
Patrick (CEO of WSO): [00:35:11] I think it's like two million already with 10x. It's like a twenty million dollar transaction. It was, yeah. Ok, so. So, yeah, you could still talk about it. I mean, I think it's interesting. Right?
Grace: [00:35:24] And you essentially made the swim for it myself, so I was super involved with it, and I know the company really well.
Patrick (CEO of WSO): [00:35:32] So, yeah, being able to talk about the industry, what you like about it, the growth trajectory you can be like. So you were helping on the sell side basically help prepare. Yes. So you can be like, I actually think we've got a great price. So as an investor, I wouldn't have liked to be on the other side because I wouldn't write
Grace: [00:35:48] A word was not what we were expecting.
Patrick (CEO of WSO): [00:35:51] Yeah. And you can say I wouldn't want to pay such a high multiple for such a small asset. Seemed like that that would actually show that you're like, you're not just like blindly like, yes, it's a good deal, I'm a bank and the buy in the buy side and the people will actually like to hear that. Mm hmm. But you know, it is a fast growing company, so I could see the justification for it, but I don't think they put any leverage on it. It was a strategic that bought it. Probably not a financial buyer.
Grace: [00:36:16] Yes, I know fairly large strategic, too. So that's what makes me think they could have done it all cash without.
Patrick (CEO of WSO): [00:36:23] Yeah, it's different if you're a package. Yeah, if you're a private equity fund, you don't you care about your equity check because you've raised much debt. If you're a strategic buyer, you already have a ton of debt, especially large when you really have a tenant that you're funding or always raising new debt at a low cost of capital to fund acquisitions like this. Cool. Ok. I'm excited for you, so when is that in an hour or two hour?
Grace: [00:36:47] No, I actually I have a class starting in about 20 minutes. No. About like 30 minutes. And then it's almost a three hour class. And then it's right after that class ends.
Patrick (CEO of WSO): [00:36:56] Yes, a little coffee right near the end of class or something. All right. I'll let you go get some rest before that. And then. Yeah, good luck with everything. Keep me up to date and maybe we can do another session in like a month. I'd be curious to catch up and see what.
Grace: [00:37:11] Yes, hopefully I'll have more clarity then on everything.
Patrick (CEO of WSO): [00:37:14] Awesome. Okay, Grace, thanks so much for taking the time. We'll talk to you. Bye. Okay, bye. And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis. And till next time.
or Want to Sign up with your social account?