Thank you all for your continued patronage with regards my finance related articles.
It really nice to know that you find these articles useful and easy to follow!
This has exactly been the whole idea of writing these articles.
I want to help you understand the whole gamut of finance-related domains and how to enter them successfully.
This time I am going to write about jobs in the private equity sector.
When you think of private equity, the first thing that comes to your mind is an extremely high paying high flying job!
Yes! It indeed is a high paying job but then it’s not easy to get such jobs. So what do you do to get a job with a leading private equity firm?
Well to start with, you can read this article and try to follow the tips and instruction I have provided here. I will divide this article into two parts:
1. Who can get a private equity job? and
2. How to get a private equity job
1. Who Can Get a Private Equity Job?
Most finance students’ dream of getting a private equity job. But can everyone get in?
Let’s see the different sets of finance professionals who typically aim for a private equity job and how easy or difficult it is for them to get the actual job.
#1. Fresh graduates
This set of finance professionals find it the most difficult to get into private equity jobs, especially with top notch firms.
To have a realistic chance, you have to have a prior banking or Private Equity internship experience or go to a business school or university where Private Equity firms really recruit undergraduates or else you have to get really lucky with your networking skills.
#2. Investment Banking Analysts
Investment banking analysts are the biggest cluster of financial professionals that headhunting firms target when they look for filling in private equity jobs.
Private equity firms work closely with investment banking firms on various financial transactions and their work is quite complementary.
So investment banking professionals from leading firms have the best chance of getting into private equity firms.
#3. Analysts Working in Allied Industries
Many analysts who work with management consulting firms dream of switching to top private equity firms, but I have seen that typically there is a prejudice against people from non-financial backgrounds.
If you've worked with a management consulting background, I would say it is better to target private equity firms that are well-known for recruiting management consultants (for e.g. private equity firms like Golden Gate Capital, who are known to recruit analysts from Bain and company).
Another option for analysts working in allied industries is to target specific industry-centric mid-sized private equity firms, rather than targeting the likes of KKR and Blackstone, where you can leverage your domain industry knowledge.
So for example, if you worked in PepsiCo’s corporate strategy team, I would say aim for a middle-market FMCG-focused firm.
2. How to Get a Private Equity Job
When I look at private equity firms, usually I tend to divide them into two segments:
“The Big Guys” – The larger private equity firms such as Blackstone, KKR, TPG, and other similar firms that focus on largest deals and
“The wannabes” –The middle market firms that do everything from tiny USD 20mn deals to acquisitions up to millions of dollars.
Almost every PE firm uses head-hunters to recruit prospective employees.
Private equity firms are usually tight firms with minimal support staff. So it is prudent for them to outsource the hiring part to professional head-hunting companies who specialize in recruiting private equity professionals.
If you ask me there are two key doors to get into a leading private equity firm. One is through very strong networking and the second one is a headhunting company.
So if you don't possess a wide network, you will have to contact leading headhunting companies to get into a private equity firm.
I think the three most useful headhunting firms who specialize in private equity recruiting are The Oxbridge group, SG Partners, and CPI. There are other headhunting firms such as Glocapsearch and a few others do it too, but the best opportunities are typically available with the above mentioned three companies.
How to Contact Head-hunting Firms?
Many times you may be contacted directly by the headhunting firms first. But if you’re not, then the best option is to get introduced to friends or colleagues.
If that also does not work, then you can bank on cold-emails and cold-calls. But then this could be a time taking process especially if you do not have the requisite background or a brand name on your resume.
How Does the Hiring Procedure Actually Work from the Start to the End?
I have noticed that the bigger private equity firms are typically more consistent and shadow a procedure comparable to large banks, while smaller private equity firms have more lengthy procedures and take longer to decide.
Importance of an Effective Resume
Your resume is your first interaction with a recruiter.I’ve already covered how to write effective resumes
before, so I’ll not go into that in detail again.
But remember your resume should be able to stand out amongst the hundreds of other resumes that the headhunter gets.
The Preliminary Meeting with Head-hunting Company
This is the first time the recruiter gets to see you in person. He or she is trying not only to gauge your technical financial skills but is also trying to study your personality, and deciding if you will fit their organization. So make sure you are presentable and pleasant throughout the meeting.
Try to showcase your financial skills wherever possible and be precise.
Do not ramble on and on about something you did without giving specific examples.
If you do not know something, do not fabricate stuff. You will be immediately found out and that will be the end of your private equity dream.
If this preliminary meeting goes off well, the head-hunters will introduce you to their clients which will be the private equity firms.
The Interview with Private Equity Firms
Now interviews will totally depend on the background and style of the interviewer.
You will find some interviewers who are jolly and fun throughout the interview, while you will also come across interviewers who sit grimly throughout the interview.
Remember you have to be patient throughout the interview.
Try to answer all the questions as truthfully as possible.
There will be a lot of questions on technical and financial domains as well as case studies.
As regards the case studies, put emphasis on simplicity and don't complicate things for yourself. If you are from a non-traditional background you will have to explain how you fit into Private Equity domain in spite of having no relevant experience.
The initial interview could be over the telephone or over Skype while the subsequent interviews could be face to face.
Generally larger private equity firms take quick decisions while smaller firms typically extend their decisions as they can afford to be choosy and they are very anxious about the candidates fitting into their firms.
I know of many candidates who have gone through more than 6-7 rounds of interviews before being selected or rejected! So do not get dejected if the selection process takes time.
The final round will be for negotiating the compensation package and the joining date.
Study your compensation package carefully as a major chunk of it will be variable pay.
With smaller private equity firms you will have more space for negotiation on salary, bonuses, and other compensation related terms.
Your negotiation power will be directly relative to your work experience and what hierarchy you’re entering the company.
The whole selection process can typically take anywhere from two weeks to eight weeks. I know cases wherein private equity firms have taken more than 3-4 months to take a final decision.
Receiving the Final Offer
Once the negotiation process is over you will be offered the final offer letter.
Please make sure to check the offer letter carefully and make sure that everything that was promised to you during your interview is mentioned in there.
You will have to sign your copy and submit to the company while you will, in turn, get a signed copy from their end.
I hope this article has been useful to all you financial professionals who are looking to enter the world of private equity.
Do read this article carefully and follow the steps.
You will also have to do some research on your own to augment the steps I have provided above.
The world of private equity is definitely a very attractive profession but believe me, it will be very challenging and inspiring.
Do let me know if you've any further questions and like always I will be more than happy to address them.
I wish you all the best in your quest to become a successful private equity professional.
Follow the below process to get your dream private equity job