After completing my first year as an investment banking analyst, I began to pursue private equity opportunities for start dates the following summer. That way I would have completed my full 2-year analyst program as I continued to build a competitive resume. Private equity firms prefer to see two to three years of investment banking or consulting experience, whereas hedge funds would consider candidates with only one year of relevant experience. Given that I worked in the M&A group at a bulge bracket firm, I was always itching to “buy businesses” as some of our financial sponsor clients were doing on a day to day basis. Rather than advising on various buy-side and sell-side assignments for a one-time transaction fee, I wanted to be part of the investment process post-closing of the acquisition.
I began the process by putting together a contact list of private equity firms that I was interested in. That being said, I began a search on the internet, on financial databases that I had access to through my job, and tried to network with alumni from my University that made the transition from investment banking to private equity. I was really interested in working for a private equity firm that concentrated on industry sectors of companies that have simple business models that I could “touch” and understand such as a consumer products business. After putting together a list of 35 private equity firms that were based in the US, I began to reach out to headhunters and set up an introductory meeting. Going into the first meeting with a headhunter with a list of PE firms that sparked my interest set me apart from other candidates. I showed that I was serious about my career and made sure to be as prepared as possible for the start of my process. At the same time, I was brushing up on basic investment banking interview questions and practiced building a 3-statement, M&A and LBO model.
My interview process took 4 months from start to finish. I began the process in August of 2009 and accepted an offer from a mid-market private equity firm in November. I interviewed at over 15 different shops and received two offers.
The offer I received for my dream job was not as easy as it sounded in previous paragraph. After receiving a phone call from the headhunter, he started off by saying, “There is mid-market consumer focused PE firm that is looking for a pre-MBA associate for summer 2010 start. The team is great and consists of 9 investment professionals.” I told the headhunter I was interested in hearing more, and she provided the firm’s name and website. The headhunter forwarded my resume to the team and I began to do my research on the firm. After two days, I got a call saying that the PE team would like to meet with me the following Monday. So I had three days to prepare for the first interview day. After interviewing with twelve different PE firms, I really made sure to prepare 110% for this one.
First step was to make sure I knew everything I could about the PE firm. The team would be impressed if the candidate knew their backgrounds, their portfolio companies and firm investment criteria – I memorized all of this information which is public on their website. The first round interviews went smoothly and we talked about my background, my career and personal goals, and I heard about the team members’ past experiences and about the fund’s performance. On the second round, I went in for the technical part of the interview process where I was given a case study. The case study consisted of one corporate presentation, a piece of paper with investment and forecasting assumptions of the business and a laptop with an open and blank excel sheet. I was given three hours to put together a 3-statement standalone model (where I had to build an IRR sensitivity analysis as well), and answer 10 qualitative questions on the business (for example, I had to explain a few of the important diligence questions I would have for the management team). This process was stressful and I left the office hoping I did not make any major mistakes. Luckily, two days later I received a phone call from the headhunter saying that the two partners would like me to come in and meet with them. So after making sure I knew why I wanted to work for this firm and everyone I could from their website, I went in and met with the partners. Luckily, the interviews were going well. Once I finished meeting with the second partner, he told me to wait in the room and he will be right back. When he came back in 15 minutes later, he came write up to me to shake my hand and said the following, “Thank you for coming in today and we would like to extend you an offer to come work as part of our team next summer. We believe you would be an excellent addition to our team here. Take a few days to think about it and feel free to call me if you have any questions as you decide.” That was a huge relief and I was overwhelmed with joy. I finally did it! I got the dream job by making sure of taking the right steps in preparing for the PE interview process. Without preparation, I would have never even made it past the headhunter interview.
My one final thought as you begin the same process – Make sure you fully and correctly prepare for PE interviews even before you reach out to headhunter. Every single step is critical to landing the dream job.