Q&A - 1st Year PE Associate at a US MF in Europe (KKR, BX, TCG, WP, TPG, BC, APO)

It might be a challenge. MFs in Europe are looking to hire younger and younger professionals as the pyramid is getting very top heavy. Post-MBA you would need to be recruited as a VP and there are virtually no spots left. Also some US funds like to hire pre-MBA juniors because the MBA alternative allows them to have some control over the up or out process - e.g. there might be no headcount left for a VP when an Associate is due to be promoted but the partners will encourage said Associate to go through an MBA with a guaranteed VP spot once it is completed. However depending on your pre-MBA experience you might be very successful in some niches e.g. Tech if you worked at a startup, in the Silicon Valley or at an MBB, and Real Estate which I hear has been struggling with recruiting experienced talent lately.

I got in touch with the HHs during my summer. I have attended some of the breakfast funds organise during the summer. A few weeks into my FT, I sent a quick note over email to most of the HHs saying that it would be good to have a quick introductory call with them. Another email in January to wish them a happy New Year and giving them an update on my status and year end reviews. Then I would recontact them every 6 months or so saying that I was looking for the next step in my career and keeping myself abreast of new opportunities. I absolutely cannot emphasize enough how critical it is to get on their good side. They will make or break you so you better treat them as royalty and with the utmost politeness.

Regarding your second question, of course your internship will be relevant. I invite you to keep track of all the deals you have worked on during this internship - it will give you great material to discuss during the HHs screening calls and funds interviews.

Thanks for the feedback, glad to know I'm not the only one battling with this. I felt real whiplash transitioning to buyside from banking. Everyone here is so much smarter, more efficient and proactive than in banking. In banking, as a junior, you can just follow clear instructions from multiple hierarchical layers at any time. There are moments in banking where I felt (without too much conceit I hope) that I was a "star" because I knew how to output slides and models very fast, took responsibility and was always reachable on my phone - simple stuff but seniors were always appreciative during reviews. This feeling is definitively gone. Everyone is super sharp. Everyone thinks fast. Everyone has a top tier background. I'm not special and I have to re-learn everything I thought I knew down pat, especially finance. I think you have to be very confident (borderline narcissistic) to not feel this when transitioning

1) Absolutely. I mean, there is still dumb stuff (you wouldn't believe the amount of reporting I have to do) but there's no artificial limit on the value-added you are allowed to bring to any project as a junior. If I have comments on something, I am encouraged to give them. I am encouraged to disagree with my seniors as long as the rationale is sound and that I can explain myself rationally. It's a very collegial approach. Seniors are actually happy when a junior has something to say - it means the junior has spotted something that they haven't and everything goes as long as it is in the interest of the investment. 2) I still haven't found what I want to do when I grow up. A lot of PE juniors are in the same boat - we've followed prestige and money as signals of inherent value because we can't be bothered to find our calling. 3) Honestly, the pay. I had an offer at a mid market fund and it paid 50% less than the MF. I had a humble upbringing and still support part of my family so it was a deciding factor.

1) The brand of the school is important. MF are huge snobs when it comes to it - for a simple reason, team credentials do matter somehow when raising funds. But I cannot give personalized advice without the name of your school - answer will depend on how "good" of a school it is 2) There might be some diversity programs you could leverage. Reach out to SEO, I believe they have a good network in PE 3) Not as important as WSO would make you believe. My group didn't appear in any of the rankings always appearing here (GS TMT, MS M&A, etc.) C&R/HC are very good sector specializations to have when it comes to transitioning to the buy side, a lot of funds are investing in these sectors. Regarding your offer, you should ask around what is the involvement of the industry team in transactions: is the M&A team always in charge of modelling and process execution in your bank? Or do they keep the modelling in-house in the sector team? You will want as best an exposure to modelling as you can have. 4) Honestly I would not do it. You would risk being labelled as "that C&R guy". What you want is to be specific enough so that the HHs think you have a solid understanding of your career next step, while keeping it vague enough so that you get a call for a higher number of opportunities. So just say something like: "I'm interested in large cap private equity, I am open to both generalist positions and positions where I could leverage my sector expertise in C&R" 5) 1 year is early for London. Most recruiting comes after 2 years of experience. I wouldn't say it's much more difficult to exit at a later date - the process is much less formal than in the US so the only limit on the timing of exit is how expensive you are as a more senior banker. 6) I think you are overestimating the number of job openings per year. A traditional fund will recruit at most 2-3 juniors per year. Especially for the funds that have offices in several Continental Europe countries, each office will recruit maybe once every 2 to 3 years. So, no, you will not be reinvited if you fail the interviews, PE professionals typically don't have enough time to keep reinterviewing the same pool and there are just not enough openings to justify it. 7) There are no international mobility programs. PE funds are much smaller and leaner structures who cannot afford to send a junior out for a year compared to banks who can sometimes have such programs. Best you can do is negotiate it on an adhoc basis if there's a need on the company's side. Thank you for all your questions!

1) Pretty detailed. You receive a 40 pages CIM and instructions to build an LBO and a few slides: - Revenue build-up at the Business Unit level - They only asked for a single operating case - No notable PF adjustment - But they did ask to do the 3 statement so you should know how to build a PF balance sheet by heart. Honestly I felt the WSO pdf really covered it well. 2) I recommend reading Case in Point - it's a well known classic. Actually one of my interview questions was straight out from the book. Always remember to start as high as you can i.e. demographics (450m inhabitants in Europe, growing 0.1% p.a.) then divide by number of inhabitants per households to get households (c. 2.5) ie 180m households. Then multiply by % of households that need to buy it x frequency of purchase (1 time every 5 year?) x pricing x market share to get yearly revenue.

3) I did interview at smaller funds to have backups just in case. But always wanted to get some experience in large cap equity